The company has won deals with NVIDIA and Mavenir

This technology arm of L&T Limited has been trending for its bullish trend barring only the previous trading session. The stock is up by 9% in the last five trading sessions. This buzzing stock has been a multibagger in just the last six months. The stock was trading at Rs 2,642 on May 18 from where the stock has rallied to Rs 5,676.5 as of November 18, generating a huge return of over 114%. When considering returns for the year-to-date, the stock has appreciated by 235%.

In short, you would have had a multibagger in your bag had you purchased this stock one year ago or even six months ago. 

The stock was buzzing since it was chosen by NVIDIA and Mavenir as engineering partners to accelerate the adoption of the industry's first converged AI-on-5G platform. Artificial Intelligence has been revolutionizing industries through advanced technology and automation. Combining it with 5G takes technology processes to the next level. The management said, “selecting L&T Technology Services as an engineering partner will enable the technology to reach organizations on a global level and unleash the endless possibilities provided by 5G.”

As far as the financial health of the company is considered, the recently disclosed quarterly financial results witnessed decent growth. The net sales for the quarter ended September stood at Rs 1608 crore which grew by 5.88% sequentially and 22.4% on a YoY basis (same quarter last year). The profitability too improved by almost 39% on a YoY basis to reach Rs 230.8 crore, up by 6.36% when compared to the previous quarter.

L&T Technology Services Ltd is primarily engaged in engineering and R&D services. The company offers consultancy, design, development and testing services across the product and process development life cycle. The stock has a 52-week high of Rs 5819.2 which was created in the recent bull rally and has a 52-week low of Rs 1645.00.

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The stock price closed at a 3% premium to its issue price

This franchise operator for YUM’s, Sapphire Foods Ltd, got listed on the exchanges on 18 November 2021. As we are all aware, apart from Diwali, investors have celebrated the IPO festival. The markets witnessed some firecrackers such as Nykaa bursting with listing gains, and some heavy firecrackers that didn’t light up at all to the expectations of investors - a prime example being Paytm.

Sapphire Foods, however, had a modest opening. The stock had a decent opening with a 15% premium at Rs 1360.75 on the BSE and Rs 1368 on the NSE. At the end of the day, the stock price closed at Rs 1216.05, down by 7.24% from its opening price and up by 3% from its issue price.

The company had a decent response from the public for subscription as the stock was subscribed 6.62x on the final day of bidding. The company had come out with its initial public offering (IPO) of equity shares of the face value of Rs 10 per equity share. The maiden offer comprised an offer for sale of shares worth Rs 2,073.25 crore by the promoters. The upper price band of the issue was fixed at Rs 1180 per equity share.

Sapphire Foods India is YUM brand's largest franchise operator in the Indian subcontinent in terms of revenue as of FY'20 operating KFC, Pizza Hut and Taco Bell restaurants. It is also Sri Lanka's largest international QSR chain in terms of revenue for FY' 2021 and the number of restaurants operated as of March 31, 2021.

The company is in the expansion phase and so the profitability has been deprived of the income statement. It has been suffering net losses for the past years. Although the top line of the company has been on a downtrend, part of the reason was the pandemic. It would be crucial to see how the QSR chain performs as a listed company.

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Golden crossover is considered as a metric of a long-term trend reversal. Here is the list of top stocks witnessing golden crossover. 

Today the markets are closed on account of Guru Nanak Jayanti. However, yesterday on November 18, 2021, Nifty 50 tumbled 0.75% (133.85 points) and continued its southward journey that began at the start of the week. It continued its lower highs and lower lows formation on a 5-minute chart.

The golden crossover occurs when a short-term moving average breaches above a major long-term moving average. Typically, when 50-Day Simple Moving Average (SMA) crosses 200-Day SMA from below, then it is considered as a golden crossover. Few analysts use Exponential Moving Average (EMA) instead of SMA and few also consider 100-Day SMA instead of 200-Day SMA. Golden crossover usually suggests a probable long-term trend reversal. Though, this is not a full-proof indicator but can be a good start to screen stocks that are probably heading towards a trend reversal. This along with price action usually help investors invest in stocks with a long-term bias.

Golden crossover and death crossover are considered to be reasonable entry and exit points in stocks. 

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In the recently released Earnings report for Q2, the company displayed an unimpressive performance as it failed to increase the net profit despite an increase in revenue.

Q2-FY 22 Highlights

Quess reported a healthy recovery (revenue up 23% YoY/8% QoQ) after a sluggish second wave period. General staffing grew 6% QoQ as associate headcount crossed 250k with a strong contribution from new clients. Global Technology Services and Operating Asset Management segments grew 18% YoY and 15%YoY, respectively. 

Consolidated revenue stood at Rs 3,228 crore in Q2-FY22 against Rs 2,615 crore in the corresponding quarter last year.

EBITDA declined 20% on a YoY basis stood at Rs 112.3 crore in Q2-FY22 against Rs 139.7 crore in the corresponding quarter last year. However, EBITDA margin contracted 200 bps on a YoY basis due to high employee cost, EBITDA margin stood at 3.2%.

Net profit declined 26% stood at Rs 38 crore in Q2-FY22 against Rs 46 crore in the corresponding quarter last year. However Net profit margin contracted 60 bps on a YoY basis, NPM stood at 1.1%.

Company and its Business

Quess Corp (Quess), India’s leading integrated business services provider, was established in 2007. Headquartered in Bengaluru, the company has a pan-India presence with an overseas footprint in North America, the Middle East and Southeast Asia. The company serves over 2,600 plus customers. Quess employs over 384,000 personnel (including Terrier Security Services) across its three platforms namely,

a) Workforce Management (WFM) – 66% of revenue

b) Operating Asset Management (OAM) – 16% of revenue

c) Global Technology Solutions – 18% of revenue.

Outlook and valuation

The outlook is for a continued recovery across all businesses during 2HFY22. Encouraging so far is the traction in the staffing and tech solutions segments. Workforce management and security should gather steam gradually. The company is trading P/E of 237x against an industry P/E of 52x.

Valuation looks on the higher side but Quess corp is one of the major players in the industry to watch out for in the future. 

The share closed at Rs 910.10, 3.5% down for the day on November 18, 2021.

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List of top 5 gainers and losers this week in the Large-cap space.

The market erased almost all of its last two week’s gains amid a broad market sell-off seen this week. Investors fretted, triggering profit-booking largely on account of weak global cues, rising inflationary concerns and tepid listing of Paytm shares. The spike in India’s wholesale price inflation to 12.54% for October month, from 10.66% in September on account of rising in crude oil prices also worried investors. The FIIs and DIIs both were net buyers to the tune of Rs 1,768 crore and Rs 3,927 crore respectively in the Indian equities market during the week.

In the period from Friday i.e, November 12 to November 18, the Nifty 50 index fell 1.86% from 18,102.75 to 17,764.80. Similarly, the BSE Sensex registered a decline of 1.73% from 60,686.69 to 59,636.01. 

Let us have a look at the top gainers and losers in the large-cap space during this period.

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