IndiGo, BPCL, HDFC Bank, Bajaj Auto: Stocks fall despite upgrades to FY24 profit estimates!

Shares of many companies, which have seen upgrades to FY24 profit estimates post Q1 results, have failed deliver returns to investors so far. Among them are InterGlobe Aviation, BPCL, HPCL, Godrej Properties, Mahanagar Gas and HDFC Bank. UltraTech Cement, DLF, Apollo Tyres, Asian Paints and Bajaj Auto also fell, despite seeing earnings upgrades, data compiled by IIFL Securities suggest.

In the case of IndiGo, the stock has fallen 2.9 per cent despite seeing a strong 50.7 per cent upgrade in FY24 profit estimate. "We believe IndiGo is well-placed on its own trajectory, given strong air traffic growth, steady net fleet adds and a competition faced with its own troubles," Emkay Global said recently. This brokerage has a target of Rs 3,000 on the stock. Prabhudas Lilladher values the stock at Rs 2,855.

Two oil marketing companies BPCL and HPCL saw their shares falling up to 4 per cent despite seeing upping of FY24 profit estimates by 29 per cent and 23.2 per cent, respectively. BPCL has an average target price of Rs 436, as per publicly available data with Trendlyne. The price target suggests 22 per cent potential upside for the stock. HPCL's average price target of Rs 297, on the other hand, suggests a potential 13 per cent upside.

Godrej Properties saw 17.5 per cent upgrade in FY24 estimates but the stock is down 1.6 per cent this earnings season. In this case, presales for Godrej Properties were subdued with sustenance sales contributing 80 per cent. HDFC Institutional Equities has reiterated its 'ADD' rating on the stock with a higher valuation of Rs 1,664 per share to account for higher BD activity and improving price realisations, which were 5-10 per cent more than estimates.

Mahanagar Gas and HDFC Bank also saw double-digit upgrade in FY24 profit.

"Based on Q1 numbers and management guidance, we have upped our FY24E Ebitda/scm while lowering volume assumptions and raising Ebitda/scm for FY25E. Based on our upward revision in estimates, we upgrade the stock to 'Buy' from 'Add' with a DCF-based revised target of Rs 1,234 from Rs 1,141," said Centum Broking said on Mahanagar Gas.

HDFC Bank chief Sashidhar Jagdishan on Friday said funding will remain the biggest risk after the HDFC Bank and HDFC merger. Speaking at the first annual general meeting of the newly merged entity, Jagdishan said the merged entity's primary risk pertains to funding. The private lender has a target of Rs 2,041 on the stock, suggesting 28 per cent potential upside.

Prestige Estates, UltraTech Cement, DLF, Apollo Tyres, Asian Paints and Bajaj Auto some other stocks seeing weakness despite earnings upgrades.

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