These large-cap firms posted jump in Q1 profit, but their stocks have underperformed in 2023. Should you buy them?

In the latest quarterly earnings for Q1FY24 (the quarter that ended in June 2023) profitability of many large-cap stocks increased significantly. Data available with corporate database ACE equity showed that the combined net profit of 100 blue chip stocks listed in the large-cap equity benchmark BSE 100 index has surged 15 per cent to Rs 2.42 lakh crore in Q1FY24 from Rs 2.11 lakh crore in Q4FY23 (quarter that ended on March 2023). On the back of the robust earnings, the BSE 100 index has given over 7 per cent return (YTD) this year so far till August 29, 2023. Despite the splendid jump in profitability, there are some large-cap stocks that have still underperformed and given a negative return (YTD). While quarterly profit is rising, the stock prices have declined in 2023. Can these blue chip stocks catch up with their peers? Here are the details.

Cement maker ACC Ltd, owned by Adani Group, has recorded the highest increase in profitability. Its net profit for Q1FY24 has jumped 98 per cent quarter on quarter (QoQ) to Rs 466.1 crore from Rs 235.6 crore in the previous quarter Q4 FY23. ACC gross sales have surged 9 per cent on a QoQ basis to Rs 5,201 crore from Rs 4,791 crore. This stock is down 19 per cent to Rs 1981.9 on August 29, 2023, from Rs 2441.4 on December 30, 2022. ACC has a current market capitalisation of Rs 37,218 crore.

ACC is followed by Adani Ports and Special Economic Zone as net profit of this logistic sector giant has surged 83 per cent to Rs 2,114.7 crore on a QoQ basis. Gross sales have also risen 8 per cent to Rs 6247.5 crore. This year, Adani Ports' share price has declined 1.3 per cent to Rs 807 while it has an m-cap of Rs 1.74 lakh crore.  

The makers of Fevicol, Pidilite Industries, have posted a 65 per cent jump in net profit for the Q1FY24 at Rs 468.2 crore from Rs 283 crore in previous quarter. Gross sales for Pidilite have also increased 22 per cent to Rs 3,275 crore in Q1. However, this share is down 1.3 per cent in 2023 so far. This chemical sector stock is currently trading at Rs 2,513 with m-cap of Rs 1.28 lakh crore.

FMCG major Dabur India witnessed profit surging 54 per cent (QoQ) to Rs 464 crore from Rs 301 crore, while stock is down 1.3 per cent at Rs 554. It has a current m-cap of Rs 98,197 crore.  

Avenue Supermarts recorded a 43 per cent jump in the net profit to Rs 658.8 crore from Rs 460 crore in the previous quarter. This retail sector stock has plunged 12 per cent in 2023 to Rs 3,590 and has an m-cap of Rs 2.34 lakh crore.

Some other stocks that have posted a surge in profits but the stock has declined in 2023 include Ambuja Cements. Its Q1 net profit rose 40 per cent to Rs 905.6 crore but the stock has slid 16 per cent, Bajaj Finserv's Q1 profit jumped 10 per cent to Rs 1,942.6 crore while its stock is down 3 per cent and State Bank Of India saw net profit gain of 2.4 per cent at Rs 18,536.8 crore in Q1 while the stock tanked 7 per cent.

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