Indian equities closed marginally higher last week amidst MPC meeting, following which the RBI increased policy rates by 25 basis points. Interestingly, after the massive sell off witnessed in Adani group stocks over the past two weeks, there was a strong pull back in these stocks last week, with several of them featuring in the top 10 gainers’ list. Prominent among them were Adani Ports, 17 per cent gain last week, compared to the previous week, and Adani Enterprises, up 16 per cent in the week ended 10th February. The top three gainers this week were One97 Communications, PB Fintech and Adani Enterprises.

Paytm

Topping the charts this week was the stock of payments company One97 Communications, which owns the Paytm brand. The stock gained a whopping 24 per cent last week, after the announcement of it turning profitable at the operating level (before accounting for the ESOP cost).

The company managed to grow revenue by an impressive 70 per cent from ₹921 crore in 3QFY22, to ₹1,574 crore, in 3QFY23. However, the operating profit break even, according to the company was before accounting for the ESOP cost. The reported operating loss narrowed from ₹790 crore last year to ₹358 crore in December 2022 quarter. Macquarie Securities, a global brokerage firm, which until then had an ‘underperform’ call on the stock, upgraded it to ‘outperform’ with a target price of ₹800 apiece.  

While all of these helped the rally in the stock during early part of the week, a block deal announcement wherein about company’s 3.5 per cent stake reportedly changed hands weighed on the stock. On Friday, the stock shed over 7.5 per cent currently trades at 3.2 times its book value of ₹204 per share.

PB Fintech

Second in the gainers’ list last week was the stock of PB Fintech, which owns insurance platform Policybazaar and lending platform Paisabazaar. The stock gained almost 22 per cent in last five trading sessions.

The strong up move in the stock was on the back of impressive performance by the company in the latest December 2022 quarter. Revenue grew 66 per cent for the quarter ended December 2022, thereby resulting in narrowing of losses at the operating level from ₹317 crore last year to ₹133 crore, in 3QFY23. Likewise, the net loss also reduced from ₹298 crore last year to ₹88 crore in 3QFY23. At the current price of ₹526, the stock trades about 4.4 times its book value.   

Adani Enterprises

Ranking third in the winners’ list was the stock of Adani Group’s flagship entity Adani Enterprises. The stock gained about 17 per cent last week, snapping its losing streak for the last two week. From its year low of ₹1,435 a share, the stock has rebounded 28 per cent, amidst expectation that it may pre-pay some of its foreign loan up to USD 500 million by March 2023. However, on Friday, the stock fell 4 per cent, following an announcement that the company’s weight in MSCI, a global index aggregator, may be reduced. The company’s weight in the index has been reduced by 0.3 per cent.

Read BL Explainer: Why is MSCI concerned about Adani stocks’ free-float market cap

Other Adani group companies whose weights have been modified include, Adani Transmission (0.3 per cent), Adani Total Gas (0.2 per cent). At Rs 1847, Adani Enterprises trades about 6.6 times its book value.

With the exception of PB Fintech, the other two stocks gave up some of their gains in Friday’s trade.

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