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Axis Bank is up a staggering 12.9% due to 70% YoY growth in net profits for Q2FY23. SBI & SBI Life had a successful week rising around 6% each. Nestle was also up 7.5% based on a better earnings report.
IndusInd has had a good 2022 and saw decent growth in Net Profits for Q2FY23. Yet, the stock tanked 3% this week mostly because of reduced margins and concerns around the quality of their loan book. JSW, Asian Paints, and L&T were also losers for the week when Nifty 50 was up a cool 2.3%.
USDINR closed at ₹82.8, down by 0.5 percent, while everyone tracks it closely. The rupee is certainly weakening but not as much as other currencies which means things are bad but relatively good. And that’s sometimes enough to keep the markets cheered up. Maybe that’s why Nifty is only 5% down from its All Time High while other major stock indices are tumbling. Crude, Gold & Silver were flattish over the week.
On valuations, price-to-earnings (PE) ratio for the Sensex was at 22.6, and there’s a graph below for historical comparison.
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Capitalmind Outliers is our in-house screening tool that helps you discover stocks with trends and momentum in their favor. Every week, we at Capitalmind discuss what’s behind an outlier standing out. This week, we have a Third-Party Logistics (3PL) player on the center stage: Transport Corporation of India.
In the past three years, the company’s revenue has grown ~6%, while operating profits have grown at a much higher rate of ~20%, as the company has focused on higher margin segments: Less-than Truck Load (LTL) in freight, SCM, and coastal freight.
The operating margins on the whole however are not that much, but this is expected in the logistics industry, which makes up for it by focusing on operational efficiency. This can be measured by asset turnover, calculated as how much sales a company is able to generate using all its assets. For TCI, asset turnover has averaged roughly 1.7 in the past three years.
TCI numbers aren’t unequivocally industry-leading, so why has TCI run up? Well they haven’t run up alone, a lot of third-party logistic players have:
Why have third-party logistics players run up?
Transport Corporation of India is one of many stocks that ranked Grade 10 on the Capitalmind Outliers platform this week.
(Disclaimer: The information conveyed in this post is intended for informational purposes and shouldn’t be considered as investment advice. Please do your own research before making investment decisions)
One of these weeks, we will be happy to keep the gloomy macro, inflation headlines, and politically charged economic policies out of our reading lists. This week is unfortunately not that week.
Deepak Shenoy shares his insights on the booming bank credit growth in India with the latest macroeconomic data. Along with Nihit, he also discusses other events of the markets such as Bajaj Finance Results, and also takes up audience questions.
(If you have questions you would like to ask us, do join in live on Fridays at 4.)