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During the last week, bellweather indices BSE Sensex and Nifty fell by around 1.5 per cent on account of selling pressure due to rising US bond yields, and raising concerns about potential delays in interest rate cuts. While sectoral indices such as BSE Realty, BSE FMCG, BSE Metals and BSE Power ended in the red, others, namely BSE Oil and Gas, BSE Capital Goods, BSE Teck and BSE Auto, gained during the week.
While many stocks moved up without being backed by any significant news flows or fundamentals, RVNL, Oracle Financial Services Software (OFSS) and Phillips Carbon Black Ltd (PCBL) were the top gainers driven by fundamental news within the BSE 500 index last week.
RVNL
The stock of RVNL shot up by around 58 per cent during the last week, driven by expectations of strong capex for the Indian Railways in the upcoming interim budget.
Rail Vikas Nigam Ltd (RVNL) is a PSU company engaged in the business of development of rail infrastructure.
Other railways stocks such as IRFC and IRCON Intl joined the rally with RVNL. This is on account of expectations of higher budgetary allocation for Indian Railways at around ₹2.8-3 lakh crore in the interim budget FY2024-25, against ₹2.4 lakh crore for FY2023-24.
However, it needs to be noted that the RVNL stock is trading at an expensive trailing P/E of 48 times. Even when factoring growth prospects, the uspide last week while backed by speculative news, appears overdone.
OFSS
The stock of Oracle Financial Services Software (OFSS) gained around 44 per cent on the back of robust Q3 results.
OFSS, a subsidiary of US-listed Oracle Corp, is engaged in the business of providing IT products and services in domains such as capital markets, banking, wealth management, corporate banking, payments, retail banking, and risk and compliance.
During Q3FY24, the company’s revenue saw a y-o-y growth of around 26 per cent. Further, its net profit increased by 50 per cent during the period on a y-o-y basis.
The OFSS stock is trading at a trailing P/E of 32 times.
Phillips Carbon Black
The stock of Phillips Carbon Black Ltd (PCBL) rose by around 22 per cent, driven by strong Q3 results.
PCBL, a part of the RP Sanjiv Goenka group is engaged in the business of manufacturing carbon black, which is used in the production of automotive tyres.
During Q3FY24, the company’s revenue grew by 13 per cent on a YoY basis. Further, its EBITDA and PAT saw a YoY growth of 66 per cent 48 per cent, respectively.
The stock is trading at a trailing P/E of 26 times.
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