Imported inflation in the form of rising crude and palm oil prices kept the market sentiment jittery during the June quarter. However, the initial financial results of India Inc. showed that at least 9 companies in the BSE 500 index managed to report over 100 per cent growth in net profit so far on a year-on-year basis. Shares of these companies have delivered a mixed return to investors since the beginning of the ongoing financial year-to-date. Going ahead, market watchers are bullish on a couple of stocks.
Data available with corporate database Ace Equity showed that the consolidated net profit of Bharat Electronics surged the most 1,401 per cent year-on-year (YoY) to Rs 365.65 crore in Q1FY23. The figure stood at Rs 24.35 crore in the corresponding quarter a year ago. On the other hand, net sales of the company also jumped by 96 per cent YoY to Rs 3,087.28 crore during the same period. Shares of Bharat Electronics have gained 27.51 per cent to Rs 268.85 since April 1, 2022, while the benchmark BSE Sensex has cracked 4.93 per cent during the same period.
Brokerage JM Financial is positive on Bharat Electronics with a target price of Rs 315. “Bharat Electronics remains our top pick on continued indigenisation in defence and increasing share of electronics in all large platforms,” the brokerage said.
Avenue Supermarts followed it. The D-Mart owner's net profit jumped 574 per cent to Rs 642.93 crore in the June quarter against Rs 95.37 crore in the same quarter last year. YES Securities believes that shares of Avenue Supermarts should be able to sustain its premium multiples with stock returns in line with the solid earnings growth. The brokerage has set a target price of Rs 4,971 for Avenue Supermarts, indicating an upside of over 20 per cent from the current market price.
Oberoi Realty, Polycab India, Century Plyboards (India), JSW Energy, Gujarat State Fertilizers, Kajaria Ceramics and Bank of Maharashtra also posted over 100 per cent growth in net profit during the quarter gone by.
JM Financial is also positive on Kajaria Ceramics with a target price of Rs 1,310. Shares of the company have gained 5.41 per cent in the ongoing financial year till July 21. “We continue to like Kajaria Ceramics’ market leadership in tiles, robust cash flows, strong brand recall, high retail mix and strong distribution network across India and healthy return ratios. Delay in pass-through of gas price inflation is a key risk to our call,” JM Financial said in a report.
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