Top Gainers & Losers: UltraTech results disappoint Street, Sun Pharma, Hindustan Unilever rise

Indian equity benchmarks rose around half a per cent on Monday to halt a two-day losing spree, mirroring positive moves across global markets. IT stocks were the star performers, recovering some of their recent losses amid concerns IT spending may moderate this year due to a likely slowdown in key economies.

“If the optimism continues, we may see a pre-Budget rally in the holiday-truncated week,” said Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities. The Indian financial markets will remain shut on January 26 for Republic Day.  

Technical Outlook

Despite strong momentum, the Nifty50 has failed to take out resistance at 18,180, trading above its 20-day simple moving average, and holding a higher bottom formation on the intraday chart in a largely positive signal, according to Kotak Securities.

For traders, 18,000 would be the trend-deciding area on the Nifty50, above which the index could move up to 18,200-18,250 levels, and on the flipside, selling pressure is likely to increase below 18,000, which could take it all the way to 17,950-17,900 levels, according to the brokerage.

Here are some of the blue-chip stocks that saw big moves on January 23:

Sun Pharma 

Sun Pharma shares finished with a gain of Rs 19.4 or 1.9 per cent at Rs 1,049.5 apiece on BSE, and were the top gainer in the Nifty50 basket.

Sun Pharma's specialty pipeline ramp-up along with its strong positioning in India and emerging markets ensures sustainable double-digit revenue growth and a best-in-class margin profile, according to Jefferies Analyst Alok Dalal.

The drug major is slated to report its financial results for the October-December period on January 31.

Jefferies maintained a 'buy' rating on the stock with a target price of Rs 1,200 per share — implying upside potential of 14 per cent from Monday's closing price.

Hindustan Unilever (HUL)

HUL shares was the top Sensex gainer, finishing with a gain of Rs 49.5 or 1.9 per cent at Rs 2,597.8 apiece.

Sales and profit growth are likely to move in tandem with the absence of meaningful margin expansion beyond 2023-24, which will prevent a meaningful re-rating of the stock, according to Prabhudas Lilladher Analyst Amnish Aggarwal.

Aggarwal estimates a CAGR of 12.9 per cent in sales and 15.7 per cent profit over the four-year period ending March 2025.

The brokerage expects a moderate return from the stock in the near term given the valuation of 45.2 times its estimated earnings per share for the year ending March 2025. The brokerage has an 'accumulate' call on the stock for a target of Rs 2,800.

UltraTech Cement

UltraTech shares fell by Rs 331.4 or 4.6 per cent at Rs 6,846.9 apiece on BSE, after the cement maker reported a weak set of results. The stock was the top laggard on both headline indices.

ICICI Securities expects UltraTech Cement to report lower unit energy costs going forward given the softness in fuel prices and exhaustion of high-cost fuel inventory.

“We don’t expect significant realisation gains for the industry in Q4 given it is usually a volume-sensitive quarter," according to the brokerage, which maintained a 'buy' on the stock with a target price of Rs 8,300 per share.

ICICI Securities sees lower demand or prices and higher fuel costs as key risks.