Last week’s three gainers in the stock market

After closing on a positive note for the second consecutive week, the S&P BSE Sensex closed last week with a gain of 2.7 per cent. Global events and domestic events such as June quarter results will continue to propel the market direction.

The week ended July 29 looked like a bumper one for Bajaj Group, with two group companies topping the returns charts on a weekly basis. Among the S&P BSE 500 Index constituents, Bajaj Finserv was the top gainer at 18 per cent based on 5-day returns. Another Bajaj stable stock which gave good returns to investors is Bajaj Finance (15 per cent). Bajaj Finance is a subsidiary of Baja Financial Services Limited (Bajaj Finserve).

Bajaj Finserv, the non-banking financial services arm of the Bajaj Group, also operates other areas such as asset management, lending, insurance and wealth management. The strong rise in the company’s stock is due in two ways. One, apart from the stellar performance in the June quarter, apart from the management’s decision to split the stock in a 5:1 ratio (five new shares of par value of ₹1 for all investors in the company. 14 per share in the company’s operating revenue). Percentage to ₹15,888 crore, this interest income grew by 29 per cent to ₹8,971 crore during the quarter as compared to the same period last year. Net profit for the period increased by 57 per cent to ₹1,308 crore. But the stock Zoom actually helped stock Zoom by the addition of a 1:1 bonus announcement to a stock split from the current face value of ₹5 to ₹1 per share. Stock splits and bonus issue stocks, however, do not add any fundamental value to the markets. Low price of shares after split/bonus issue may increase investor base, hence get excited. At current market price the stock is 5.12 times the estimated FY23 book value of ₹2,439. On the basis of estimated earnings per share, the stock has its own Trades at around 38 times estimated d FY23 earnings.

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The impressive performance of Bajaj Finance stock last week was helped by its strong performance in the June quarter. Bajaj Finance outperformed for the June quarter, reporting 31 per cent growth in core assets under management (AUM) to ₹204,018 crore. Profit after tax increased by 159 per cent to ₹2,596 crore. The company’s net non-performing assets were also 0.51 per cent in June 2022.

Other stocks which performed well in the last week are those of specialty chemical manufacturer Naveen Fluorine Ltd. The 15 per cent rise in the stock price was helped by the company’s healthy performance in the June quarter. A major player in refrigeration gases, the company also has a presence in inorganic fluorides, specialty fluorochemicals. Apart from these, Naveen Pharma is also involved in contract development and manufacturing for custom chemical synthesis of fluorinated compounds for Agro Chemicals and specialty chemical players. For the June quarter, the company reported an operating revenue growth of 22 per cent at Rs 397 crore as compared to the quarter ended June 2021. Net profit for the period was up 33 per cent at Rs 74.5 crore, compared to the previous corresponding period. year. Growth for the quarter was driven by the specialty business and HPP (High Performance Products) division. The stock trades at around 60 times its estimated FY23 earnings.

Published 30 July 2022

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