The list includes M&M Financial, Affle India, Amara Raja, CEAT,
, Escorts and Can Fin Homes. Individuals, who own up to Rs 2 lakh of shares, increased their stake in these companies by at least 200 basis points during the June quarter.
While REITs reduced their exposure in M&M Financial by 223 basis points and mutual funds by 1.24% in the June quarter, retail participation in NBFC jumped 335 basis points sequentially to 7.51 percent versus 4.16 percent at the end of the March quarter. . The script is down 27% since April 1.
Small investors picked up shares of M&M Financial in what Edelweiss later called in his June quarter earnings report, the worst quarter for the NBFC in a decade. The brokerage said growth had been pushed back further and earnings would remain under pressure.
“With a sharp increase in gross NPAs and the restructured portfolio, the struggling portfolio grew to 35% from 22% in the fourth quarter, raising concerns about the company’s underwriting standards. While the company made adequate provisions, so did a 10% erosion of net worth with a net NPL to net worth ratio also increasing sharply to 35% from 17% in the fourth quarter, ”said Phillip. Capital, which suggests a target price of Rs 160 for the stock.
In the case of Affle India, market valuations were deemed expensive, but the script has fallen 26% since April 1, making it attractive again. Small investors increased their stake in this stock by 206 basis points to 8.85% from 6.79% quarter on quarter. REITs and mutual funds were sellers.
Axis Securities expects Affle to deliver robust sequential revenue growth of 6.6% in rupees. “Operating margins are expected to improve by 120 basis points,” he said and advised investors to watch for management comments on mobile ad spend from customers in all geographies.
Sharekhan in a report released earlier this month maintained a price target of Rs 6,580 on Affle India. He said the company’s recent acquisition of Jampp should initially have a dilutive effect on margins, but should provide opportunities for strong growth in the coming year.
“We expect Affle’s revenue to grow by 54% and profits by 23% in fiscal years 21-23,” he said. Analysts’ updates suggest a sharp rise for this stock. The action is trading today at Rs 4,204 each.
saw a 600 basis point increase in retail participation to 14.34 percent from 8.31 percent. Kotak has a “sell” rating on the stock, while other brokerages have a “keep” rating. The battery maker has shown its intention to seek a partnership in manufacturing Li-On cells nationwide. Analysts said the step is in the right direction, but want to see specific action and funding contours before changing their positions in the stock.
Retail investors increased their stake in CEAT by 273 basis points to 12.6% from 9.87%. The company’s strong revenue growth in the June quarter was somewhat offset by weak margins against the backdrop of soaring commodity prices.
Nirmal Bang has a “sell” rating on the stock because he finds the risk / reward ratio unfavorable at current valuations. “With the decrease in investment intensity, we expect the CEAT to be positive for the FCF from FY 23, provided it demonstrates a good balance between investment and profitability,” said said Edelweiss, who has a holding rating on the title.
RBL Bank, Escorts and Can Fin Homes are the other three stocks that posted strong retail buys in the June quarter. These stocks have fallen 10-11% since April 1.
Analysts are largely positive on Can Fin Homes. They said the NBFC’s balance sheet is heavily capitalized with Level 1 capital of 24.3%. “With pricing being the determining factor in a very competitive home loan market, the execution rate of disbursements over the next few quarters would be a key controllable element,” said Nirmal Bang.
Dalal & Broacha Stock Broking said Can Fin Homes will continue to cite top quality appraisals as the quality of its loan portfolio of 90% commercial housing with negligible exposure to developer finance remains best-in-class and its Competitive cost of funds is comparable to that of some banks and HFCs. .
In the case of RBL Bank, Emkay Global expects it to report a 39% drop in June quarter profit to Rs 85.5 crore on an 11% drop in NII to Rs 924.80 crore . The brokerage maintained a call to buy on the stock even as it expects “profitability in June of the quarter to remain subdued due to slower growth and high provisions.”
Meanwhile, analysts have “keep” or “buy” ratings on escorts. “We like the tractor segment, which we believe completely outperforms the automotive segment, which has struggled due to lack of volume. The tractor segment is relatively better off with the monsoon going in the right direction and a likely good year for the agricultural sector. We love both M&M and Escorts in this space, ”Jigar Shah, CEO of Kim Eng Securities, told ET NOW last week.