By Shreesh BiradarThe Nifty 50 index gained in February post-budget, as the government focused more on bringing down fiscal deficit rather than populist moves. Lower government borrowings are also expected to result in higher liquidity for PSU banks. As a result, the Nifty PSU Bank rose 10.5% in February. Private banks saw selling pressure during the month, with stocks like Yes Bank receiving a ‘Sell’ rating from Goldman Sachs.
Higher volumes in the auto sector and increased rural spending due to the post-harvest marriage season, led Nifty Auto to gain 6.2% in the month.
Indian equity mutual funds saw a net inflow of Rs 26,866 crore in February, with smallcap funds registering a 10% monthly decline in inflows to Rs 2,922 crore. Large and midcap funds recorded the highest inflows at Rs 3,156 crore. With institutional investors focusing away from smallcaps, Nifty 500 rose 1.5% in the month, while Nifty Smallcap declined by 0.3%. Around 20 new open-ended schemes also launched during the month, which attracted Rs 11,469 crore in investments.
Jubilant Foodworks’ MF holdings increase to 1,253 lakh shares in February
Jubilant Foodworks focuses on quick delivery and customer rewards
QSR player Jubilant Foodworks (JUBLFOOD) owns a wide portfolio of brands, including Domino’s Pizza, Popeyes, Dunkin, and Hong’s Kitchen. Despite recent diversification efforts, it relies heavily on Domino’s, which contributed 69.7% of revenue in Q3FY24. The firm has exclusive rights to develop and operate Domino’s Pizza in India, Sri Lanka, Bangladesh and Nepal. Jubilant Foodworks has 1,928 Domino’s stores across 407 cities.
The firm reported a 2% decline in its Q3FY24 revenue, despite the festive season and the ICC Cricket World Cup. Efforts like 20-minute delivery, a rewards programme and combo sales have improved ticket size and customer loyalty, but lower footfalls at restaurants have impacted margins. In the face of increased competition, the firm is focusing on cost optimisation through store launches and delivery improvements. The company expects moderating inflation, industry expansion and store additions to drive its bottom line.
Fund managers who bought shares of Jubilant Foodworks
Fund managers who added shares of Jubilant Foodworks to their portfolios include R. Srinivasan and Mohit Jain for SBI Focused Equity Fund, Ankit Agarwal for UTI Mid Cap Fund, and S. Bharath and Ratish Varier for Sundaram Mid Cap Fund. Fresh buys were done by Parijat Agrawal and Hardick Bora for Union Balanced Advantage Fund, and Ashutosh Bhargava and Kinjal Desai for Nippon India Balanced Advantage Fund.
Max Financial Services’ new insurance products and capital infusion by Axis Bank to drive the business
Max Financial Services (MFSL) operates in the life insurance business,with Max Life Insurance a joint venture between Max Financial Services and Axis Bank. The company recorded a gross written premium of Rs 18,790 crore in 9MFY24 and holds a 9% market share in the life insurance business. The firm is also into pension fund management, with its AUM currently standing at Rs 1,43,000 crore.
Max Financial Services reported a 16.1% YoY growth in its gross premiums, with most of the growth coming from first-year premiums, which grew 21%. However, margins declined due to increased interest in PAR (participating in profits policies) policies. The ULIP business also increased by 70% YoY, putting further pressure on margins. The firm received IRDAI approval for a capital infusion of Rs 1,600 crore from Axis Bank, which will help increase the solvency ratio by 35 percentage points (currently at 179%). The firm also launched Smart Total Elite Protection (STEP) insurance for the affluent class in Q3FY24, driving an 82% YoY growth in the Retail protection and Health Segment.
Fund managers who bought shares of Max Financial Services
Fund managers who added shares of Max Financial Services to their portfolios include Sailesh Raj Bhan and Kinjal Desai for Nippon India Multi Cap Fund, Chirag Setalvad and Dhruv Muchhal for HDFC Mid-Cap Opportunities Fund, and Neelesh Surana for Mirae Asset ELSS Tax Saver Fund. Fresh buys were done by Atul Penkar and Dhaval Joshi for Aditya Birla Sun Life Equity Advantage Fund, and Hardick Bora and Sanjay Bembalkar for Union Flexi Cap Fund.
Piramal Pharma’s CDMO business leads revenue growth and margin expansion
Piramal Pharma (PPLPHARMA) is a pharma firm and a major contract development and manufacturer organisation (CDMO), with interests in critical care and complex hospital generics. The CDMO accounts for 58% of the revenue, while complex hospital generics contribute 29%. Piramal Critical Care’s complex hospital product portfolio includes inhalation anaesthetics, intrathecal therapies for spasticity and pain management, injectable pain and anaesthetics, injectable anti-infectives, and other therapies.
Piramal Pharma‘s Q3FY24 revenue increased by 14.1%, and the company reported a net profit of Rs 74 crore. Revenue from its complex hospital generics (CHG) segment grew 12% YoY on better volumes in the inhalation anaesthesia portfolio, but steep price erosion impacted profitability. However, higher new orders in the CDMO business and lower raw material costs resulted in an 860 bps margin expansion. The firm provisioned Rs 32 crore towards a product recall by one of its suppliers, resulting in lower profitability. The firm currently has a pipeline of 22 new products and has also received orders for its CDMO business in monoclonal antibodies. Major economies shifting their drug manufacturing outsourcing to India from China are also significantly boosting revenues in the medium term.
Fund managers who bought shares of Piramal Pharma
Fund managers who added shares of Piramal Pharma to their portfolios include Roshi Jain and Dhruv Muchhal for HDFC Flexi Cap Fund, Nimesh Chandan and Siddharth Chaudhary for Bajaj Finserv Flexi Cap Fund, and Himanshu Mange for Nippon India Nifty Smallcap 250 Index Fund. Fresh buys were done by Krishna Sanghavi and Renjith Radhakrishnan for Mahindra Manulife Business Cycle Fund, and Yogesh Patil and Rahul Singh for LIC MF Balanced Advantage Fund.
Kalyan Jewellers India plans higher market penetration with store additions
Kalyan Jewellers India Ltd (KALYANKJIL), based in Thrissur, is a gems & jewellery firm and a leading gold retail chain operating through 235 outlets, with presence in GCC nations like UAE, Qatar, Kuwait, and Oman. The firm reported a consolidated revenue of Rs 17,455 crore in the past four quarters.
Kalyan Jewellers has focused on increasing its retail footprint YoY, with plans to open 60 (opened 47 in 9MFY24) franchise-owned and company-operated stores across India by the end of FY24. This expansion is expected to boost revenue from the Indian market. The firm saw a 40% growth in Q3FY24, driven by an increase in new customers and higher purchases during the festive season. However, margins were compressed on account of higher revenue from franchised-owned and company-operated stores and increased advertising spends. The firm plans to expand its margins by adding more products under studded jewellery. and aims to reduce its debt by 10% in FY24.
Fund managers who bought shares of Kalyan Jewellers
Fund managers who added shares of Kalyan Jewellers to their portfolios include Bhavesh Jain for Edelweiss Nifty Smallcap 250 Index Fund, Abhishek Bisen and Devender Singhal for Kotak Nifty Smallcap 50 Index Fund and Arun Agarwal and Nirman Morakhia for HDFC Nifty Smallcap 250 Index Fund. Fresh buys were done by Niket Shah and Ankush Sood for Motilal Oswal Midcap Fund, and Taher Badshah and Amit Ganatra for Invesco India Contra Fund.
Voltas gears up for growth in washing machines and refrigeration
Voltas (VOLTAS) is a consumer electronics firm known for its air conditioners and refrigeration units. It has partnered with Beko to manufacture refrigerators and washing machines. It is also engaged in the EPC business, providing solutions across MEP (mechanical, electrical and plumbing) and HVAC (heat, ventilation and air conditioning) projects. As part of the Tata Group, the firm has an annual turnover of Rs 10,000 crore.
Voltas posted a revenue growth of 31% YoY in Q3FY24. However, a margin contraction of 270 bps YoY due to a Rs 30 crore loss in electromechanical projects dampened its success. Its room air conditioner (RAC) business grew by 27% YoY. The festive and wedding seasons contributed to higher offtake. The washing machine segment’s losses have reduced drastically, helping margins.
Fund managers who bought shares of Voltas
Fund managers who added shares of Voltas to their portfolios include Ankit Jain for Mirae Asset Midcap Fund, Taher Badshah and Amit Ganatra for Invesco India Contra Fund, and Lalit Kumar and Sharmila D’mello for ICICI Prudential MidCap Fund. Fresh buys were done by Harsha Upadhyaya and Arjun Khanna for Kotak Equity Opportunities Fund, and Atul Penkar and Dhaval Joshi for Aditya Birla Sun Life Equity Advantage Fund.
Minda Corporation’s MF holdings stand at 405 lakh shares in February
Minda Corporation: EV parts and new product launches drive growth
Minda Corporation, a manufacturer of automobile components like mechatronics, security systems, die casting, telematics, and instrument cluster sensors serves both the passenger and commercial vehicle sectors. While its manufacturing base is in India, the company caters to clients across Germany, China, Japan, Poland and Mexico.
Minda Corporation won orders worth Rs 2,300 crore in Q3FY24, with nearly 30% related to electric vehicles (EVs), including Rs 450 crore for LCD wiring harnesses. Other orders included sensors for pressure monitoring and diecasting products for EV batteries. Minda is expanding its margins through product premiumization, streamlining of fixed costs, and localization of component procurements. Despite sluggish demand in the export business over the past quarter, new products and domestic demand are compensating for slower export growth. The management expects the firm’s revenue to grow by 23% in FY24-25, with a 150 basis points expansion in EBITDA margins.
Fund managers who bought shares of Minda Corporation
Fund managers who added shares of Minda Corporation to their portfolios include Manish Lodhaand Abhinav Khandelwal for Mahindra Manulife Small Cap Fund, and Dhaval Gala and Dhaval Joshi for Aditya Birla Sun Life Transportation and Logistics Fund and Ashish Naik and Vinayak Jayanath for Axis Business Cycles Fund. Fresh buys were done by Dhaval Gala and Dhaval Joshi for the Motilal Oswal Flexicap Fund and Niket Shah and Ankush Sood for Kotak Small Cap Fund.
Whirlpool protects volumes through price cuts
Whirlpool of India (WHIRLPOOL), a consumer electronics player with major products in home appliances. The firm manufactures refrigerators, washing machines, air conditioners, microwave ovens, etc. Whirlpool has an 87% stake in Elica PB, which manufactures induction hobs, boilers, kitchen hoods, and chimneys, and contributes 9% of the revenue. Whirlpool’s consolidated revenue for the last four quarters stood at Rs 6,905 crores.
Facing intense competition from local players, Whirlpool has cut prices across its products. The festive season in Q3FY24 gave a much-needed boost to its revenue.
During this quarter, revenue increased by 17%, while profit surged by 13.4%. The decline in profit was on account of discounts and higher advertisement and marketing expenses. The firm is looking at volume growth rather than margin expansion to maintain market position. It plans to launch new products in the kitchen appliances segment and explore new markets to gain volumes.
Fund managers who bought shares of Whirlpool of India
Fund managers who added shares of Whirlpool of India to their portfolios include Mahesh Patil and Dhaval Joshi for Aditya Birla Sun Life Frontline Equity Fund. Fresh buys were done by R. Srinivasan and Mohit Jain for SBI Small Cap Fund, Sailesh Raj Bhan and Ashutosh Bhargava for Nippon India Multi Cap Fund, Sankaran Naren and Roshan Chutkey for ICICI Prudential India Opportunities Fund and Vinit Sambre and Jay Kothari for DSP Small Cap Fund
EID Parry targets growth in non-sugar segments
EID Parry (India) (EIDPARRY), part of the Murugappa Group, is a food beverage & tobacco company operating in the sweeteners and nutraceuticals space. With six sugar plants and a standalone distillery in South India, the firm has a cane-crushing capacity of 40,300 tonnes per day and a distillery capacity of 417 kilolitres per day. It also has a significant presence in refined sugar and farm inputs through its subsidiaries.
The firm faced challenges during the quarter due to export restrictions on sugar. However, higher price realisation in the domestic market helped cushion the blow. Unpredictable rainfall thanks to El Nino has affected sugarcane yields and production. The management plans to increase capital allocation in the biofuels and non-sugar consumer segments. EID Parry is diversifying its FMCG portfolio to include value-added products like jaggery, low-glycemic sugars, rice, dal and millets.
Fund managers who bought shares of EID Parry (India)
Fund managers who added shares of EID Parry (India) to their portfolios include R. Srinivasan and Mohit Jain for SBI Small Cap Fund, and Rajeev Thakkar and Raunak Onkar for Parag Parikh Flexi Cap Fund, Sanjeev Sharma and Vasav Sahgal for Quant Small Cap Fund and Rajeev Thakkar and Raunak Onkar for Parag Parikh ELSS Tax Saver Fund. Fresh buys were done by Abhishek Jain for Groww Nifty Smallcap 250 Index Fund
Data Patterns (India): Large order book gives good revenue visibility
Data Patterns India (DATAPATTNS) is a defence firm engaged in manufacturing electronic boards and systems for the aerospace and defence sectors. It also provides electronic solutions for processors, power, radio frequencies, and embedded software.
As of December 2023, the company’s order backlog stands at Rs 963 crore, with production orders comprising 63%, development at 33%, and the rest from the services segment. The management expects Rs 500-600 crore worth of orders in the pipeline for the next two quarters. The firm reported revenue growth of 25% and profit growth of 53%. The margins currently stand at around 43%. It has maintained a revenue guidance of 25-30% growth, with a gross margin of 65% and an EBITDA margin of 40-45% for FY25.
Fund managers who bought shares of Data Patterns (India)
Fresh buys were done by Neelesh Surana and Ankit Jain for Mirae Asset Large & Midcap Fund Growth. Additional buys were made by Neelesh Surana for Mirae Asset ELSS Tax Saver Fund, Himanshu Mange for Nippon India Nifty Smallcap 250 Index Fund, Harsha Upadhyaya for Kotak ELSS Tax Saver-Scheme and Abhishek Poddar and Dhruv Muchhal for HDFC Defence Fund.
Mahanagar Gas: Incentives guide volume growth
Mahanagar Gas (MGL) is a city gas distribution utilities firm operating in Mumbai, its adjoining areas, and the Raigad district of Maharashtra. Nearly 70% of the company’s revenue is from CNG sales. The firm has 327 CNG stations under its banner.
The firm reported a volume growth of 7.6% YoY in its CNG segment. Industrial and commercial volumes increased by 15.9% due to rising demand. Incentive schemes, like a 10% discount for MGL industrial customers opting for alternative fuels, have been effective. Also, higher vehicle additions in the CNG segment are contributing to growth. In a pro-customer move, MGL reduced CNG prices by Rs 2.5 per kg in the past week. Although this price reduction will impact the company's top line, the expected increase in CNG volumes is likely to offset the impact. Lower input costs for CNG are expected to improve its margins.
Mahanagar Gas has also launched card-based schemes for CNG users to expand its market share. The government plans to raise the share of natural gas in India’s energy mix to 15% by 2030, up from the current 6%. This is expected to boost MGL’s prospects.
Fund managers who bought shares of Mahanagar Gas
Fund managers who added shares of Mahanagar Gas to their portfolios include Kunal Sangoi and Dhaval Joshi for Aditya Birla Sun Life Pure Value Fund, Shiv Chanani and Miten Vora for Baroda BNP Paribas Small Cap Fund and Himanshu Mange for Nippon India Nifty Smallcap 250 Index Fund. Fresh buys were done by Shreyash Devalkar and Mayank Hyanki for Axis Small Cap Fund and Murthy Nagarajan and Sonam Udasi for Tata Retirement Savings Progressive Fund.
