Except for some stressed sectors like aviation and multiplexes, most other companies have managed to grow their results year over year, while for others the profit numbers are only 10-20% below previous levels to Covid.
Some 35 BSE500 companies from all sectors such as banking and finance, pharmaceuticals, fertilizers, infrastructure and oil and gas have registered a year-on-year growth of more than 100% in final results.
Oil retailer IndianOil (IOC) reported a 1,187 percent increase in net profit to Rs 6,025 crore even as net sales declined 13 percent to Rs 1.17 lakh crore. IOC shares have fallen nearly 44 percent in the last year.
IDBI Capital Markets has improved the stock to ‘accumulate’ from ‘hold’ with a price target of Rs 87. The stock was trading at 78 rupees in a bull market on Thursday.
“IOC earnings in the second quarter of fiscal 21 exceeded our estimates due to significantly higher inventory earnings. Adjusting for this, the result was below our forecast due to negative basic GRM and lower-than-expected marketing earnings. The reported GRM reached $ 8.6 a barrel due to the inventory gain of Rs 7,300 crore ($ 9.6 / bbl), while the basic GRM remained negative $ 1 per barrel, ”he said.
Tata Communications posted year-on-year profit growth of 613 percent to Rs 384.48 crore versus Rs 53.91 crore posted for the same period last year. The company’s shares have gained 162 percent to 968.45 rupees on November 3 from 368.25 rupees on November 4 last year.
Orient Electric, Cadila Healthcare, ICICI Bank, Laurus Labs, CEAT, Tata Metaliks, TV18 Broadcast, and Deepak Fertilizers reported profit growth of 200% to 600% for the quarter.
Except for ICICI Bank (down 5.50%) and Tata Metaliks (down 15%), others gained between 10% and 290% in the last year.
Motilal Oswal Financial Services is positive on Laurus Labs with a price target of Rs 400. “Management remains confident not only to sustain performance, but also to improve it. Laurus is in the process of building a product portfolio and significantly improving manufacturing capacity to cater for future growth, ”the brokerage said.
BoB Capital Markets has revised ICICI Bank’s target price to Rs 500 from Rs 450 earlier.
“ICICI Bank has the ability to drive growth as it leverages its strong deposit franchise and uses surplus capital. We increased earnings per share from fiscal year 22 to year 23 by 7-16 percent, ”the brokerage said in a report.
The data showed that other banking players such as RBL Bank, Bank of Baroda, UCO Bank, IDBI Bank, IDFC First Bank, and Axis Bank have also posted more than 100 percent growth in September quarter earnings.
“The banking industry appears to be in much better shape than previously feared, given increasing collection efficiency, adequate provisioning, and the fresh capital cushion for balance sheets,” YES Securities said.
In the field of fertilizers, UPL, Fertilizer and Chemical of Gujarat State and Deepak Fertilizer recorded a profit growth of more than 100%. Broker Prabhuas Lilladher has a price target of Rs 606 at UPL, while JM Financial sees the action at Rs 550 for the next 12 months. UPL shares have fallen nearly 30 percent to 417 rupees in the last year through Nov. 3.
Among others, SBI Life Insurance, L&T, Jindal Stainless, UltraTech Cement, Wockhardt, IIFL Finance, Escorts, Orient Cement, Prism Johnson, Aegis Logistics, Motilal Oswal Financial Services and ICICI Securities posted triple-digit earnings growth for the quarter.
Dolat Capital is positive on Escorts with a price target of Rs 1,334. The brokerage said Escorts reported strong overall performance in the second quarter of fiscal 21. “Ebitda increased 137 percent year-on-year with a significant margin expansion of 18 , 3 percent (up 878 basis points year-on-year) due to a better mix, lower prices of raw materials and cost control measures, “he said.
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