Stocks to watch,

Tata Steel has incorporated wholly owned subsidiary namely ‘Tata Steel Advanced Materials’ for Rs 14.80 crore.

Bank of India has infused capital of Rs 1.14 crore in PSB Alliance and the bank’s stake is increased to 8.33%.

NACL Industries’ Wholly Owned Subsidiary — NACL Spec-Chem’s greenfield project has started its commercial production from Bharuch unit.

Kanoria Chemicals & Industries is all set to start its commercial production from Phenolic Resin Plant from January 1, 2023.

Tata Power’s subsidiary — Tata Power Renewable Energy has received order from Tata Power -DDL for setting up a 255 MW hybrid (wind and solar) power project in Karnataka.

Ashoka Buildcon has received LoA from Madhya Pradesh PoorvKshetra Vidyut Vitaran Company for Rs 754.57 crore.

JSW Energy has completed the acquisition of 700 MW Ind-Barath Energy (Utkal) for Rs 1,047.60 crore through insolvency proceedings.

Stocks in Action

L&T: L&T sold its entire stake in an infrastructure entity Infrastructure Development Projects (IDPL), which it held through a joint venture with Canadian Pension Plan. L&T’s 51% stake in the entity will lead to proceeds worth Rs1,400 crore in its kitty. IDPL was bleeding for long and its sale also implies a reduction in L&T’s losses in future. L&T’s efforts to put its house in order also includes lowering working capital needs and bettering return ratios. L&T is now recovering lost ground. An improvement in profits and cash flows will gradually give a leg-up to return ratios too. The constellation of orders that make L&T‘s earnings and valuations shine, is getting denser with flows improving from domestic regions and the Middle-East. The company is hopeful of traction in orders from renewable energy and railways. L&T is a proxy for the country’s capital goods and infrastructure segments, and any slowdown in economic activity, bank credit growth, increase in interest rates or supply chain pressures, have a bearing on revenue and earnings traction. Positive on L&T given selling the non core assets to improve the earnings, declining input cost to bounce back the margins and healthy order book to provide 2 years revenue visibility.

Dr Reddy’s Laboratories: Dr Reddy is currently investing in various businesses that may provide growth in the long term. While high inflation and price erosion may reduce margins, the company is proactively building a global pipeline of biosimilars, developing NCE for Immuno-oncology, and building up a Neutraceuticals portfolio, vaccines, CDMO, and digital healthcare platforms. The company’s R&D is to inch up to 10–11% of sales. Currently, the R&D of 3% is towards NCEs/biosimilars. Its market share has marginally improved in the Suboxone market whereas volumes have remained flattish. Company’s focus on complex generics will help in reviving its growth in US markets. Positive on Dr. Reddy’s Laboratories as the company is currently investing in various businesses that may provide growth in the long term.

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