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Today we take a look at five stock picks from analysts with high upside potential.

1. DLF:

Edelweiss maintains a ‘Buy’ rating on this realty developer with a target price of Rs 1,081, indicating a potential upside of 27%. In Q4FY24, the company reported revenue growth of 47% YoY to Rs 2,316.7 crore, with net profit rising 61.5% YoY to Rs 920.7 crore. Analysts Amit Agarwal and Rishith Shah say, “We are upbeat on the company’s growth story given its robust launch pipeline, brand recall, favourable dynamics in its home turf, improving annuity income, and market consolidation.” DLF’s recent luxury projects in North India have sold out within a few days. 

Analysts are optimistic about the company’s steady presales of Rs 14,777 crore, down 2% YoY primarily due to a higher base in the previous year. New launches of around 6 million square feet (msf) constituted 82% of presales, while the remaining 18% came from existing projects. 

Agarwal and Shah are positive about the company’s outlook as the management forecasted a launch pipeline of Rs 36,000 crore for FY25. They also forecast a revenue CAGR of 11% for FY25-26 owing to the launch pipeline of Rs 94,000 crore with an additional land bank of 132 msf, for which development plans are yet to be finalised.

2. Safari Industries (India):

IDBI Capital maintains a ‘Buy’ call on this luggage maker with a target price of Rs 2,535, indicating an upside of 20%. The company’s net profit grew by 13.4% YoY to Rs 43.2 crore in Q4FY24, while its revenue improved by 21.3% YoY to Rs 370.5 crore. 

Analyst Ajit Sahu says, “Safari Industries Q4FY24 sales were in line with our expectations.” He believes that the growth occurred due to improvements in tourism activities. He also notes, “Over the past two years, Safari has gained market share from its peers”. The analyst states that Safari Industries' sales grew by 21% YoY outperforming VIP Industries’ sales growth of 15% YoY in FY24.

Sahu is optimistic about the company as it sets up a greenfield manufacturing unit in Jaipur. He believes that future growth will come from its initiative to sell premium products like Urban Jungle (the premium luggage collection). He applauds the management’s ability to outperform industry sales growth and also expand operating margins to higher levels. He estimates profit and revenue to grow at a 26.5% and 19% CAGR, respectively, over FY25-26.

3. CreditAccess Grameen:

KR Choksey maintains its ‘Buy’ call on this finance company with a target price of Rs 1,850, indicating an upside of 29.9%. In Q4FY24, the company’s net profit grew by 33.9% YoY to Rs 397.1 crore (1.1% above the brokerage’s estimates), while total revenue improved by 36.9% YoY to Rs 1,459.1 crore. Analyst Unnati Jadhav says, “CreditAccess Grameen reported stellar operating performance during the quarter, but saw deterioration in asset quality led by higher slippages.”

The analyst is optimistic about the company's expansion strategy and expects it to be key to business momentum going forward. The company added 194 branches during FY24, bringing its total infrastructure strength to 1,967 branches. The analyst also says that the NBFC succeeded in controlling its borrowing costs through a cost-effective borrowing mix, and expects it to remain stable and bring predictability to its overall margins in FY25.

Jadhav continues to be positive about CreditAccess Grameen due to its leadership, improving geographical footprint, superior return ratios, consistent operating performance, and industry tailwinds.

4. Sansera Engineering:

Axis Direct maintains a ‘Buy’ rating on this auto parts and equipment manufacturer with a target price of Rs 1,270. This indicates a potential upside of 19.8%. In Q4FY24, the firm reported revenue growth of 19.7% YoY to Rs 745.6 crore, with net profit rising 31.1% YoY to Rs 46.1 crore. 

Analysts Shridhar Kallani and Aditya Welekar note, “For FY24, the share of auto components has reduced to 75%, while non-auto & tech and aerospace segment has increased to 20% and 5%, respectively.”

Kallani and Welekar are upbeat on the company’s capex plan of Rs 400 crore in FY25 and Rs 350 crore in FY26, mainly towards electric vehicle components and non-auto products. They expect the company to post a CAGR of around 20.8% for EBITDA and 29.4% for net profit over FY25-26. They attribute this growth to the sales mix tilting towards non-auto components, growth in the export business, and recovery in its its Sweden operations led by improved operational efficiency.

5. NCC:

ICICI Direct maintains its ‘Buy’ call on this construction and engineering company with a target price of Rs 320. This indicates a potential upside of 15.2%. In Q4FY24, the firm’s net profit increased by 25.3% YoY to Rs 239.2 crore, while revenue grew by 31.1% YoY. 

Analysts Bhupendra Tiwary and Hammaad Ahmed Ulde are optimistic about NCC’s order book. Its order book stands at Rs 57,536 crore, largely driven by Rs 18,439 crore worth of orders secured in FY24, a growth of 37% YoY. The management has guided for an order book inflow of Rs 20,000-22,000 crore, with ordering likely to be impacted owing to elections in the first half. Considering the order book, the analysts expect a revenue CAGR of 15% over FY25-26. With healthy execution, the analysts estimate EBITDA margins at 10% and 10.5% in FY25 and FY26, respectively, and expect a 26% earnings CAGR over FY25-26.

The analysts say, “NCC is a key beneficiary of the tailwinds in the buildings, roads, water, mining and electrical segments. Given strong order book visibility and improving balance sheet strength, it is poised for healthy growth ahead.”

Note: These recommendations are from various analysts and are not recommendations by Trendlyne.

(You can find all analyst picks here)

The recent Ambani wedding - of their youngest son Anant - was a media event that seemed impossible to avoid. It wasn't just the tabloids and the TV channels that were doing what felt like round the clock coverage. Even the business dailies couldn't stay away. There were so many questions: did the bride plagiarize her speech? What shoes did Nita wear to the sangeet? Etc. 

 One eye-catching moment was completely unchoreographed. It was Meta CEO Mark Zuckerberg and his wife admiring the bridegroom's $1M Richard Mille watch.  The tweets and articles this moment alone generated, is a symptom of our current billionaire obsession.

My mother used to say that it is unseemly to count other people's money. Here however, I have a good reason for doing it. Recently, some economists like Adam Tooze have made the argument that billionaires shouldn't exist. The inequality that results from the oversized share billionaires have over a country's resources, they argue, damages the economy, and results in much fewer resources for the rest of us.

In this week's Analyticks:

How big - and damaging - is India's wealth divide?

Screener: The highest and most consistent dividend stocks

Let's do some counting.

How big is India's wealth divide, really?

Those of us who live in urban India are used to seeing slum towns in one area of the city, and fancy gated communities with several swimming pools on the very next road. It is also something that visitors to India love to talk about as evidence of our high inequality levels. 

But in reality, India is not as unequal as some other countries in share of wealth. 

A troubling sign however, is when we look at annual incomes rather than wealth. Here, the share of India's richest is far higher than countries like the US and China. The top 10% of Indians are cornering a big share of national income every year.

The average annual income in India is just around Rs. 2.34 lakh -- a pretty small number. But the divide between the top 1% and everyone else is pretty large. And the top .001% of the population eclipses even them.   

India’s richest 1% people have 22.6% of our national income, the highest in over a century .  

Indians tend to invest most of the money that they make in land -- land and buildings together are 90% of Indian household wealth. This percentage hasn't changed much in 60 years. The share of financial assets for Indian households has increased from 4% in 1981 to around 10% today. When we look at total accumulated household wealth, the class divide is large. 

The wealthiest 10,000 individuals in India own on average, assets of Rs. 2,260 crore each (Rs 22.6 billion), or 16,763 times the wealth of the average Indian. These are the people wearing Mielle watches, Lora Piana sweaters and taking chartered flights. For this group, queuing up for a first class seat on a commercial airline means failure, not success. 

India's wealth divide didn't start with any one government

The vast accumulation of resources by a small group of people did not happen with one government, or in a few years. The problem of the Indian middle class steadily losing out, and the top 10% getting richer has been happening since the early 1990s. No Indian government from any political party has so far, been able to pause this.

Some of the wealth gains for the top 10% and top 1% of the population, has been driven by the stock markets -- the Sensex for instance, has grown by 7300% between 1990 and 2023.

But a group cornering more resources is a self-fulfilling problem, since they use these resources and influence to get even more. This means that over time, the influence of the top 1% on policies, governments and even elections become disproportionately high.

In India, we see this skew everywhere. In the stock market, just 32% of listed companies -- 1,700 companies -- have a market cap of over Rs. 500 crore. Both market capitalization and profits are skewed towards the largest conglomerates in India. 

The rise of these billionaire entrepreneurs means they are busy influencing policy in every aspect of the government, and attempting to push out competition in entire sectors - telecom, power, gas, retail etc. Tariffs that benefit companies and promoters but hurt consumers have been on the rise. Subsidy policies disproportionately favour large corporations over SMEs, like PLI schemes. 

To tackle the problem we must first acknowledge it. For example, economists have pointed out that a wealth tax of just 2% on the total net wealth of the 162 wealthiest Indian families in 2022 "would have provided revenue equal to  0.5% of the national income -- more than twice the central government’s budget expenditures on the NREGA".

A wealth tax is nothing new and has been implemented even in Ancient Greece, when the 'eisphora' wealth tax was levied on the richest 4% of the Athens population. A practical wealth tax would tax liquid assets above a certain threshold, the enormous amount of wealth that is idle and "trapped" in bank accounts. But this is just a beginning. For these curves to really shift, we must start the conversation.

Screener: High and consistent dividend yield stocks

PSUs lead in 3-yr dividend yield %

This screener shows stocks with high and consistent dividend yields over one, two and five years. It features the top 10 stocks with the highest dividend yield in the last three years. These companies have also outperformed the Nifty 50 in the past year. 

The screener excludes stocks that have given a very high one-time/special dividend in the past two years. A high one-time dividend can inflate historical dividend yield, and such stocks may not be consistent high dividend stocks. 

The screener is optimised to show 10 stocks with high 3-year dividend yield %. Seven of the 10 stocks currently in the screener are from the public sector. Major stocks that appear in the screener are Vedanta, Coal India, ICICI Securities, Power Grid Corp of India, Oil & Natural Gas Corp and Power Finance Corp. 

FY24 has seen an increase in government budgets, contributing to growth in stock prices for these public sector companies. These public companies also have to give out a certain percentage of dividends every year – according to government guidelines, all public sector companies must give out at least 30% of their net profit or 5% of net worth (whichever is higher) for annual dividends. As a result, they tend to dominate the screener. Non-PSU stocks in the screener are ICICI Securities (capital markets), Tech Mahindra (IT consulting & software) and Gujarat Pipavav (marine port & services).

This screener also appears in Starfolio’s free featured baskets. This basket is great for long-term investors looking for high dividend-paying companies to generate passive income. This particular basket was created on March 10, 2023, with an annual rebalancing frequency. Its latest rebalance was on May 3, 2024, and the next scheduled one is on May 1, 2025. Each stock in the basket holds an equal weight of 10%, with seven being large-cap and three mid-cap stocks. 

Since its creation, the basket has given pretty impressive returns of 249.1% (not including dividends) over the past 14 months. The basket outperformed the Nifty 50 index by 221.3 percentage points in the same period. 

You can find more screenershere.

1. Oberoi Realty:

This Mumbai-based realty developer hit a new 52-week high of Rs 1771.5 on Friday after surging 19.5% over the week, following the release of its Q4 and FY24 results. In Q4FY24, the company reported operating revenue growth of 36.8% YoY to Rs 1,314.8 crore, surpassing Trendlyne’s Forecaster estimate by 2.8%. Its net profit rose 64.1% YoY to Rs 788 crore, beating forecaster estimates by 136%. The company got a boost from strong demand for its luxury projects and was able to reduce inventory significantly, leading to lower operating costs.

Oberoi Realty’s rental portfolio, which contributed around 12% of Q4 revenue, grew 68% YoY to Rs 155 crore. Occupancy levels at Commerz I and II have increased by 8% and 6% respectively on an annual basis. A new entrant to their leasing portfolio, Commerz III, has already reached an occupancy of 50% with Morgan Stanley occupying most of it. The management aims to expand occupancy levels to 80-85% in the next two quarters.

The company’s board has approved a fundraising of up to Rs 4,000 crore by issuing non-convertible debentures and a qualified institutional placement of equity shares. The funds will be used for ongoing and upcoming projects.

Chairman and Managing Director, Vikas Oberoi says, “The company will be able to achieve the Rs 1,000 crore mark from its rental portfolio from its current levels of 450 crore by the end of FY25.” He also highlighted that most of its realty peers have already sold their properties, leaving them with little to no competition. As a result, the company expects to sell its inventory of Rs 5,000 crore, mostly ready-to-move properties, in the next 24-30 months. 

Zee Business reports that HDFC Securities maintains a ‘Buy’ rating on Oberoi Realty. Analysts are optimistic due to the cash flow visibility from ready-to-move-in inventory in the 360 West and Mulund projects, along with other new projects. With a target price of Rs 1,833, this real estate developer has a potential upside of 5.2%.

2. Polycab India: 

This consumer durables company surged by 11.8% over the past week and hit a new 52-week high of Rs 6,542.9 on Friday. This comes after its net profit rose 29.1% YoY to Rs 553.5 crore in Q4FY24, beating Trendlyne’s Forecaster estimates by 13.5%. Its revenue also rose by 29% YoY during the quarter, driven by the wires and cables segment. As a result of the rise in share price, Polycab India features in a screener of stocks with prices above short, medium, and long-term moving averages.

The company’s wires and cables (W&C) segment, which constitutes around 85% of the revenue, grew by 19.3% YoY during the quarter. In comparison, its peers Havells India and KEI Industries saw W&C segment growth of 14.1% and 17.9%, respectively YoY. In FY24, Polycab’s market share in the W&C industry improved to 25-26% (compared to 22-24% in FY23). 

Cables and wires manufacturers have gained overall, from the increased demand in the real estate and infrastructure sectors, as well as increased government capex. Polycab’s FMEG segment also witnessed healthy growth at 17.3% YoY due to higher demand.

According to Gandharv Tongia, the CFO, “Rural market is growing, and with consumer goods players witnessing a good run, more investments are likely. In addition to domestic markets, we see a lot of demand coming in from Europe, Australia, and other countries. All this is expected to help sustain the demand momentum in the cables and wire segment.” The consumer durables maker expects to achieve its target of Rs 20,000 crore in revenue, as per its Project Leap by the end of FY26. It has also guided a capex of Rs 10,000-11,000 crore over the next two years.

Earlier this year, the Income Tax Department allegedly detected unaccounted cash sales by the company and conducted raids at various premises. The management highlighted that it was instructed to provide explanations for certain queries. Polycab has not been charged any penalty so far.

Post the company’s results, Prabhudas Lilladher maintains its ‘Buy’ rating on Polycab with an upgraded target price of Rs 7,086. The brokerage sees revenue and PAT CAGR of 17.9% and 16.6%, respectively, over FY25-26, led by a strong domestic demand environment and expected improvement in international business.

3. Siemens: 

This heavy electrical equipment company surged 17.2% over the past week and hit its all-time high of Rs 7,249.1 per share on Thursday as its net profit rose 70.2% YoY to Rs 802.5 crore in Q4FY24. Revenue increased by 18.6% YoY to Rs 5,681 crore, driven by improvements in the energy, smart infrastructure, mobility, and digital segments. 

The company’s net profit beat Trendlyne’s Forecaster estimates by 36.3%. However, revenue missed estimates by 0.6%. The revenue miss was due to a decline in order booking to Rs 5,180 crore in Q4FY24 compared to an order inflow of Rs 25,400 crore in Q3FY24 which, according to the management, was due to delays in deal finalisation. It shows up in a screener of stocks with negative to positive growth in sales and net profit with strong price momentum.

Siemens also approved a capex of Rs 550 crore for capacity expansion. It also plans the demerger of its energy business into a separate listed entity, Siemens Energy. The company’s board of directors approved issuing one share of Siemens Energy for one share held in Siemens. In FY24, the company’s energy business recorded a revenue of Rs 6,080.3 crore, contributing to 33.2% of its total revenue. 

Speaking on the company’s capex plans, Sunil Mathur, MD and CEO, said, “Siemens is focused on expanding its operations, with the expansion of the gas insulated switchgear (GIS) factory in Goa (approx. Rs 330 crore) and a new metro train manufacturing facility in Aurangabad (approx. Rs 190 crore), which is set to serve multiple international markets.”

Post results, Motilal Oswal maintains its ‘Buy’ call on the stock with an upgraded target price of Rs 7,800 per share. This indicates a potential upside of 8.6%. The brokerage remains positive on the company due to its spending in the transmission and business and its strong positioning to win orders in the railway segment. It expects the company’s revenue to grow at a CAGR of 13.1% over FY25-26.

4. Zomato:

This internet software and services company fell 3.5% on Monday after announcing its results. In the past year, the firm's share price has risen by 209.3%, outperforming its industry by 91.6 percentage points. In Q4FY24, the company reported a net profit of Rs 175 crore, compared to a loss of Rs 188.2 crore in Q4FY23. The company’s revenue grew 70.5% YoY. It appears in a screener for stocks with increasing revenue every quarter for the past eight quarters. However, the company missed Trendlyne Forecaster’s net profit estimate by 13%. The estimates miss was due to a higher employee stock option plan (ESOP) cost. The total ESOP charge for Q4FY24 was Rs 161 crore.

Zomato’s revenue from the food delivery business grew 48.4% YoY, while Hyperpure (its B2B business) increased by 99% YoY. Blinkit, its quick commerce segment, grew by 111.9% YoY and turned EBITDA positive in March 2024. It added 75 stores in Q4, taking its total store count to 526. 

The company expects to add another 100 stores in the next quarter and reach 1,000 stores by the end of FY25. CEO Deepinder Goyal said, “With the aggressive store expansion plans, the EBITDA is likely to be lower for the next few quarters.” In steady state, he expects it to be 4-5% as a percentage of gross order value.

Among other news, in the past week, Zomato surrendered its payment aggregator license and its application for the mobile wallet license. The management believes that it doesn't have a significant competitive advantage in the payments space and hence does not foresee the payments business as commercially viable.

CLSA upgraded its rating to a 'Buy' due to Zomato's strong guidance for Blinkit and steady performance in food delivery, despite ESOP costs impacting profits in Q4. Analysts are optimistic about the company’s achievement of breakeven for Blinkit and plan to prioritize its growth. They also believe that the expansion will impact the short-term profitability of the company but say that it will help the business become a quick-commerce leader.

5. JK Cement:

This cement & cement products company rose by 2.4% on Monday after it announced its result on May 12. The firm beat Trendlyne’s Forecaster estimates for Q4FY24 for revenue by 0.8%, but missed the net profit estimate by 20.8%. For Q4FY24, the company’s net profit rose by 95.7% YoY to Rs 219.8 crore on the back of 29% decline in power and fuel costs, while revenue rose by 11.9% YoY. The stock shows up in a screener for companies with strong annual EPS growth.

The company saw a 19% increase in volumes in FY24, thanks to the recent expansion of cement capacity in central India, where utilization rates reached 85%. Additionally, its new expansion plan aims to boost total Grey Cement capacity from 22 mtpa to 30 mtpa, at a capital cost of Rs 2,850 crore.

The company expects demand to pick up in Q3FY25 post the elections and monsoon in Q1 & Q2. With the government's increased attention on infrastructure development in states like UP and Maharashtra, there's anticipation of accelerated per-capita cement consumption in the future. The company’s upcoming Prayagraj unit is expected to commence in Q2FY25.

The company’s management expects volume growth of ~10% vs. industry growth of ~7% in FY25 along with further cost reduction of Rs 150-200/tn by FY26. For its paint business, the management expects the sales to reach Rs 300 crore in FY25 and Rs 500 crore in FY26. In Q1FY25, the company anticipates a slight decrease in power and fuel expenses. 

Axis Direct has retained its "Buy" rating on JK Cement with a price target of Rs 4,340. The brokerage expects the company’s revenue to reach a CAGR of 14% over FY25-26 and expects the company to report an EBITDA margin in the range of 18-20% with EBITDA/tonne of Rs 1,140/1215 in FY25E/FY26E, driven by higher volumes, stable realizations, and lower costs.

Trendlyne's analysts identify stocks that are seeing interesting price movements, analyst calls, or new developments. These are not buy recommendations.

Indian equity markets have stood out as a bright spot in the global investment landscape. India’s flagship index Nifty 500 has delivered gains of 34% in the past year, outperforming global counterparts like Nikkei 225, S&P 500 and others. However, volatility has spiked recently, with India VIX surpassing the 20-point mark, reaching its highest level since early 2023. The surge in volatility can be attributed to concerns that the ruling party might win fewer seats than initially expected. Analysts also worry about lower voter turnout, heightening the possibility of negative surprises.

Given the recent volatility, it is important to look at both the past quarter and past year to assess the performance of stocks and sectors.  In this edition of Chart of the Week, we dive into Trendlyne’s indices and sector dashboard to identify the top-performing sectors. We also take a look at the companies driving growth within each sector. Simultaneously, we identify the reasons for the stocks that have demonstrated resilience over the long term and during periods of heightened volatility.

It's crucial to examine the sectors that have thrived despite recent volatility. Analysing sectors helps diversify investments, make informed decisions, and grasp broader trends. So we have selected the top nine sectors over the past quarter as well as the past year,  highlighting the stocks that have contributed the most to the sectoral gains.

Consumer Durables, Realty & Auto stocks benefit from rising demand in  premium segments

Consumer Durables stands out as the top-performing sector, after posting a 355% gain over the past year. Polycab India gained from the demand surge in real estate and infrastructure sectors, marking a 42.9% rise in the past quarter and a 91.8% surge over the past year. Similarly, Dixon Technologies (India) rose 34.1% in the last quarter and surged 191% in the past year. Dixon Technologies has benefitted from the manufacturing boost buoyed by the ‘Make in India’ initiative and the ‘China+1’ strategy.  In the ‘China+1’ strategy, companies are shifting a significant portion of their manufacturing from China to other developing nations like India, Indonesia, Bangladesh, etc.

Likewise, electrical appliances manufacturer Havells India, saw a 25.2% uptick in its share price in the last quarter, accounting for 20.7% of the sector's 18.9% gains during the same period. This growth was largely fueled by increased demand for summer appliances due to rising temperatures nationwide and the uptick in discretionary spending among Indian consumers.

The Realty sector soared by 124% in the past year, driven by heightened demand for luxury residences as appetite for a higher standard of living increases. DLF, Macrotech Developers, and Prestige Estates Projects were major contributors, with respective gains of 90.2%, 130.7%, and 211.8% over the past year.

However, the realty sector's gains moderated in the last quarter as presales consolidated due to a lack of new launches. Despite this, the sector managed a 6.9% increase, with Prestige Estate Projects and Godrej Properties accounting for more than half of the gains. These companies benefited from increased realisations per square foot in metropolitan areas and their expansion in tier-I and tier-II cities.

The automobile and auto components sector has been consistently rising with gains of 14.4% in the past quarter and 71% in the past year. This was driven by higher sales in the premium segment and stable raw material prices, resulting in higher realisations. However, sluggish monsoons impacted sales in the entry-level segment, with surges observed only during festive seasons. Tata Motors and Mahindra & Mahindra emerged as consistent gainers, contributing to over one-third of the sector's gains in both the last quarter and the past year.

Rising demand for electricity drives utilities, mining and general industrials higher

According to Trendlyne’s Sector and Indices Dashboard, the metals and mining sector has risen 18.2% in the past quarter and 85% in the past year. In terms of total production, India's mining sector grew by 7.5% in FY24 with robust demand in steel, cement, and aluminium industries, highlighting strong economic activity. Hindustan Zinc was the best-performing stock in the past quarter as it rose 68%. Coal India also outperformed its peers in the past year with 90% gains as production rose 10% on an annual basis driven by demand from thermal power plants. 

Meanwhile, the utilities sector, which is a direct beneficiary of rising electricity demand, rose 7.1% in the past quarter and 116% in the past year. NTPC has consistently contributed to sectoral growth as it gained 9.4% in the past quarter and 101% in the past year. 

State-run NTPC has announced plans to add 5 gigawatts (GW) of installed capacity in FY25. Of this, the company plans to install 3 GW of renewable energy capacity and the remaining 2 GW of thermal power capacity.

General Industrials, on the other hand, is the best-performing sector in the past quarter with gains of 24.6%. Siemens, ABB India, and Hindustan Aeronautics (HAL) are the top sector drivers with each contributing 16%, 15% and 13.1% to the sectoral rise. If we look at the performance over the past year, the sector has risen by 120%. Bharat Heavy Electricals (BHEL), HAL, and Suzlon Energy are the highest contributing stocks as they rose 162.2%, 240.3% and 377.8% in the past year.  Rising demand for heavy electrical equipment from the utilities sector drove BHEL and Suzlon Energy higher. 

Similarly, defence company HAL witnessed its order book swell over Rs 94,000 crore at the end of FY24 as it received orders for its armoured helicopters and fighter jets amid rising geopolitical tensions.

Industry leaders such as Indigo, Bharti Airtel and Dmart drive sectoral gains

The transportation sector surged by 95% in the past year. Adani Ports & SEZ and InterGlobe Aviation (Indigo) emerged as key drivers, responsible for over 50% of the sector’s total growth. While Adani Ports has posted moderate gains amid high volatility in the past quarter, Indigo soared by 29.4%, contributing 67.5% to the sector's 10% gains in the same period. The expansion of new airports has improved connectivity which in turn has increased the preference for air travel, resulting in a rise of air passenger traffic to pre-COVID levels. In addition, stable fuel prices and expansion into international routes have also played a role in Indigo's share price uptick.

The telecom services sector, which rose 16.6% in the past quarter, switched places in the chart with the commercial services and supplies sector as their major contributor, Adani Enterprises which gained 48% in the past year, consolidated in the past quarter. Bharti Airtel, contributing 68.4% to the telecom sector's rise, gained as Chairman Sunil Mittal indicated a potential tariff hike post-elections in Q2. This strategic move aims to enhance their RoCE (return on capital employed) amidst substantial investments in 5G and increased customer acquisition costs.

Meanwhile, the retailing sector demonstrated steady growth, advancing 18% in the past quarter and 76% over the past year. Trent and Avenue Supermarts (Dmart) emerged as consistent performers, accounting for over 90% of sectoral gains in both periods. The continuous momentum in discounted mass-consumer products and the surge in urban consumer spending due to rising income levels have driven the sales volume of retail giants like Dmart and Trent.

1. ICICI Bank:

KR Choksey maintains a ‘Buy’ rating on this bank with a target price of Rs 1,355, indicating a potential upside of 20.1%. In Q4FY24, the company's revenue surged by 24.6% year on year to Rs 67,181.7 crore, while its net profit grew by 29.2% YoY to Rs 12,728.6 crore. Analyst Unnati Jadhav is optimistic as the bank's performance was in line with expectations. She suggests that lower-than-expected provisions led net profits to rise in Q4, exceeding estimates by 2%.

Jadhav identifies the retail loan segment as a key growth driver for the bank – it recorded significant growth of 19.4% YoY and 3.7% QoQ. The retail loan portfolio constitutes 46.8% of the total portfolio. She anticipates the cost-to-income ratio to rise to 40.5% for FY26 due to ongoing investments in branch expansion and digital banking strategies. Jadhav estimates a profit CAGR of 14.5% over FY25-26, and a 16.4% CAGR in advances.

2. TVS Motor Company:

Geojit BNP Paribas maintains a ‘Buy’ rating on this 2/3-wheeler manufacturer, with a target price of Rs 2,265, indicating an upside of 9.5%. In Q4FY24, the company reported a revenue growth of 23.5% YoY, coming just shy of the Rs. 10k crore mark to Rs 9,999 crore. It also saw a 15.1% YoY increase in its net profit to Rs 387 crore. Analyst Antu Eapen Thomas attributes the Q4FY24 revenue jump to strong volume growth, a superior product mix, and improved realisation.

Thomas notes that the EBITDA margin met their expectations, rising by 105 basis points YoY to 11.3%, supported by softening raw material prices and effective cost control measures. He highlights the company's outperformance compared to its peers in Q4, with market share in the motorcycles segment rising by 50 basis points to 13.7% due to urban commuter growth and a strong product mix in the 125 cc category.

Thomas is optimistic as the company plans to launch several new products ranging from 5KW to 25KW on the EV platform by FY25. He notes that the company aims to expand its dealer network from 400 to 800 by year-end and currently derives 10% of its volume from EVs.

3. KPR Mill:

Sharekhan reiterates its ‘Buy’ rating on this textiles company with a target price of Rs 965, suggesting a potential upside of 19.9%. In Q4FY24, the company's revenue experienced a 12.7% YoY decline to Rs 1,708.6 crore, while net profit increased by 1.9% YoY to Rs 213.6 crore. 

Analysts at Sharekhan attribute this rise in net profit to improved EBITDA margins, which increased by 332 basis points YoY to 19.7%. They express optimism as lower raw material costs contributed to a 541 basis points YoY rise in gross margins.

Analysts at Sharkhan note, “In the medium to long term, the China+1 factor, the likely signing of the free trade agreement (FTA) with the UK, and increasing opportunities in the US market provide scope for consistent growth in its high-margin garment business (~40% of the total revenue).” They are bullish on the company as the brownfield capacity addition of 30 million pieces is set to be completed by H1FY25. Following the expansion, analysts expect that the company will produce 40 million pieces per quarter in H1FY25 and 45 million pieces per quarter in H2FY25.

4. Kajaria Ceramics:

ICICI Direct maintains a ‘Buy’ rating on this tiles company with a target price of Rs 1,440, indicating a 24.1% upside. In Q4FY24, the company's revenue grew by 3.5% YoY to Rs 1,258.3 crore. However,  its net profit declined by 5.2% YoY to Rs 102.4 crore. Analysts Bhupendra Tiwary and Hammaad Ahmed Ulde attributed this profit decrease to relatively lower tile prices, which impacted margins. During Q4FY24, tile sales volumes increased by 5.5% YoY to 29.6 million square meters (MSM).

Tiwary and Ulde are optimistic as the management outlined a 3-year plan to achieve a volume of 150 million square meters (MSM) of tiles by FY27, implying a volume CAGR of 11.5% and a tiles revenue CAGR of around 11% over FY25-27, reaching Rs 5,500 crore. They note the company’s intentions to expand its presence in tier-II and tier-III cities. Kajaria has indicated that demand recovery is likely post-elections, in Q2FY25. With stable gas prices and benefits driven by operating leverage, they anticipate EBITDA margins to improve to 16% and 16.5% in FY25 and FY26, respectively, from the current 15.3% in FY24.

5. Aarti Drugs:

Axis Direct maintains its 'Buy' rating on this pharmaceutical company with a target price of Rs 570, indicating an upside of 20.8%. In Q4FY24, the company witnessed a 16.4% YoY decline in revenue to Rs 621.1 crore, while its net profit decreased by 15.7% YoY to Rs 47.3 crore. But analyst Ankush Mahajan highlights that the company surpassed expectations on a sequential basis, with a 2.3% revenue growth and 34.4% net profit growth QoQ in the March quarter.

Mahajan is optimistic as the company's gross margins improved by 282 bps QoQ due to a better product mix and declining input costs. He also noted a 227 bps QoQ improvement in EBITDA margin, driven by operating leverage from enhanced capacity utilisation.

Mahajan is also positive as the company announced a greenfield project for dermatology products at its Tarapur facility, with plans to ramp up operations by H1FY25. He expects growth in the API segment due to an anticipated positive shift in the export landscape, supported by likely interest rate cuts, low stock levels, and rising demand.

Note: These recommendations are from various analysts and are not recommendations by Trendlyne.

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