Top Gainers and Losers of March 2023

In March 2023, Indian investors went out of the frying pan, only to end up in the fire.

They moved out of the troubles caused by the Adani-Hindenburg saga and ended up facing the heat of the global banking crisis.

The global banking crisis started with the collapse of the SVB bank in the US soon followed by troubles of Credit Sussie. As a result, a majority of banking stocks were under pressure in March 2023.

Even benchmark indices had a rough ride in March 2023.

Both the Sensex and Nifty ended flat in March.

But in even these tough times the five stocks below generated decent returns last month. Let's have a look...

Top gainers

#1 Titan

The biggest gainer on our list is Titan.

In March 2023, Titan's share price rose around 6% on the back of high growth expectations.

The company has a dominant position in the leading lifestyle categories of organised jewellery and watches.

Its medium-term growth outlook remains good, supported by various initiatives to drive higher sales of wedding/studded/fashion jewellery, a strengthening value proposition, and new customer acquisition.

Titan also stands to benefit from higher market share as jewellery purchases shift to organised players and the unorganised segment becomes less competitive.

Within the Indian discretionary consumption space, Titan is uniquely positioned in terms of hefty headroom for market share led revenue growth over the long term, strong competitive moats, lower threat to profitability, and portfolio diversification opportunities.

#2 Nestle

The second name on our list is FMCG major Nestle India.

In March 2023, Nestle India's share price went up 5.5% as it reported robust numbers for the December 2022 quarter.

Nestle India reported a 65% YoY increase in net profit at Rs 6.3 bn. This was driven by a 14% YoY increase in revenue at Rs 42.8 bn.

On 31 March 2023, the company's share price rose 3.3% as it was among the final bidders competing to acquire Capital Foods.

The Swiss company has been discussing the terms of a potential deal for Mumbai-based Capital Foods. The acquisition will be a step further in expanding its presence in the Indian subcontinent.

The company is well stacked up for growth in the long term. The key growth drivers will be sustained expansion in rural areas, capacity increase in Maggi and confectionary, and huge scope of growth in segments like coffee, ready-to-drink, and chocolates.

#3 UltraTech Cement

The next company on our list is UltraTech Cement.

In March 2023, UltraTech Cement's share price rose 4.9% due to rising cement prices.

Not long ago, UltraTech Cement share price was under pressure because of weak quarterly results. The company's profits were sinking due to high power and fuel costs. The price of input materials like coke and pet coke was also on the rise.

Power and fuel costs surged 51% to Rs 48.7 bn in the December quarter compared to the corresponding period of the last year.

However, the outlook for the company changed recently as cement prices increased in February 2023. UltraTech Cement's share price is soaring lately, backed by the hike in cement prices in the range of Rs 5 -20 per bag across the country.

Cement manufacturing companies are expected to do well for next few years on the back of better demand prospects led by infrastructure and housing sectors, heightened industry consolidation, and regulatory changes in the allotment of limestone blocks.

#4 HUL

Next on our list is another FMCG company, HUL.

In March 2023, HUL's share price climbed 4.1% driven by steady quarterly numbers, higher demand due to the festive season, and easing inflationary pressures.

During the December 2022 quarter, HUL reported a 12% YoY rise in quarterly net profit at Rs 24.8 bn from Rs 23 bn a year earlier.

The company's management expects demand to grow higher as inflation moderates gradually. However, while inflationary pressures are easing sequentially, some key commodities are still elevated on a YoY basis.

#5 L&T

The last top gainer on our list is L&T.

In March 2023, the L&T share price went up around 3% on the back of a strong order book and continued growth momentum.

During March 2023, the company grabbed several new orders. In a major boost to the Government's efforts to achieve 'Aatmanirbharta' in defence, the Ministry of Defence, on 1 March 2023, signed a contract with L&T for the acquisition of three Cadet Training Ships from L&T, worth more than Rs 31 bn.

On 27 March, L&T secured EPC (engineering, procurement, and construction) orders for its power transmission and distribution (T&D) business in India and overseas.

The company has also secured another order to develop distribution infrastructure in a district of Chhattisgarh under the Revamped, Reforms-based and Results-linked Distribution Sector (RDSS) Scheme.

The company's order book continues to grow at a steady pace. It also has additional orders in the pipeline at ongoing substation and transmission line works in India and the Far East.

Now let's take a look at the top five losers of March 2023.

Top Losers

#1 Mahindra and Mahindra

The biggest loser in March 2023 was Mahindra and Mahindra (M&M).

The auto major company lost 8.8% of its marketcap in during the month because of several reasons like a weak supply chain, shortage of semiconductors, and a probable reduction in tractor sales.

M&M's supply chain issues are improving gradually, but the situation is still volatile.

These challenges, coupled with timing differences of festivities and margin assumptions because of the adverse impact of farm equipment ramp-up, may keep M&M's stock under pressure in the near term.

#2 Bajaj Finance

The second loser on our list is Bajaj Finance.

In March 2023, Bajaj Finance's share price tumbled 8.2% because of slow growth, operational headwinds, and strong competition.

It faces hurdles in accelerating its retail liabilities growth as it lacks access to low-cost CASA (current account and savings account) deposits.

The firm commands a significant market share in MSME/personal loans among NBFCs, where banks are increasingly challenging their dominance. The company is also facing stiff competition in the home loan sector.

Additionally, if interest rates continue to rise it may negatively impact Bajaj Finance's margins as it may not be able to pass on the steep interest rate hikes observed in the past ten months.

#3 Wipro

The next on our list is one of the top IT companies - Wipro.

In March 2022, Wipro's share price fell 5.6% because of significant exposure to the US banking crisis and consistent FII selling.

FIIs have continuously sold stakes from Wipro in the last six quarters.

A possible cost-cutting measure in the BFSI segment due to the global banking crisis may cause the company's revenue to fall significantly.

The collapse of large banking institutions may not only lead to a reduction in existing business, but it also reduces tech spending in the future, along with delayed deal closures.

Thus the near term outlook for Wipro shares is dull.

#4 Bajaj Finserv

Next on the list is Bajaj Finserv.

In March 2023, Bajaj Finserv's share price slipped 5.1% because of Bajaj Finance's poor health.

When a kid misbehaves in school, the school authority often calls up their parents to complain about the kid's behaviour. Similarly, when a subsidiary performs badly, investors sell shares in the parent company.

Bajaj Finance is a subsidiary of Bajaj Finserv. The subsidiary company is under a lot of trouble due to operational headwinds like stiff competition, reducing market share, etc. We even covered a detailed editorial on Bajaj Finance: death at a funeral.

Resultantly, when Bajaj Finance's share price is falling, Bajaj Finserv does not look the other way...it also sees a downtrend.

#5 Infosys

The last on the list is IT company, Infosys.

Infosys' share price fell around 4% in March 2023 on the back of headwinds for IT sector created by the SVB collapse, rising interest rates, and the resignation of key managerial persons.

On 11 March 2023, the company announced the resignation of its President, Mohit Joshi, who spent over 22 years at the company.

In less than six months, Infosys has lost two presidents, Ravi Kumar S and Mohit Joshi, to rival IT firms Cognizant Technology Solutions Corporation and Tech Mahindra. Both of them had been with the company for at least two decades each.

Thus it seems like Infosys will be surrounded by dark clouds in the near future until the effects of the banking crisis and rising interest rates subside.

Investment Takeaway

On the last day of the financial year, the market witnessed an upward trend marked by bullish moves in the banking and IT sectors driven by robust global cues.

In this financial year, Indian markets are expected to emerge relatively stronger. However, in the short term, investors may be in for a rough ride as global pressures continue to hurt Indian markets.

Rising interest rates, pandemic-led bloom and rising Covid-19 cases continue to create a worrisome atmosphere for an investor in the near term.

The primary markets reflected the secondary markets in the financial year 2023. The year gone by witnessed a lacklustre flow of IPOs. However, the winds are slowly changing. The primary markets are slowly picking up pace.

The Avalon Technologies IPO went live on 3 April 2023. With an issue size of Rs 8.6 bn, it opened the gates for big IPOs. Other companies may soon follow.

The Tata group is also gearing up for IPOs. In the new financial year, the group is all set to go live with its first IPO in the last 18 years. It has already filed draft papers for Tata Technologies IPO and Tata Play IPO.

Also, it may silently be preparing for the Tata Electronics IPO.

As you can see, both the primary and secondary markets are gearing up for a better financial year. However, as always, make sure to do your own research and invest in companies only with strong fundamentals.

Happy investing!

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...