This IT consulting & software company has risen by 10% till Friday, since announcing its Q2FY24 results on Monday. Over the past week, the stock has outperformed the Nifty IT index by 9% as investors reacted to a strong set of numbers. The company’s Q2 net profit grew 5.1% QoQ to Rs 140.9 crore and revenue by 9.3% QoQ, beating Trendlyne Forecaster’s estimates by 5.3% and 2.9%, respectively. This growth was driven by the passenger vehicle vertical and improved net realisations. The stock shows up in a screener for companies with high Piotroski scores (indicating healthy financials) and high return on equity and EPS growth.
Another contributing factor to the stock’s uptick is the management’s upgraded constant currency revenue growth guidance for FY24 to 37%, a rise from the previous 27-30%. This revision comes despite the soft demand environment in the IT industry. The management expects robust growth across verticals, driven by its strong deal pipeline. In Q2, its total contract value stood at $156 million.
Kishor Patil, the CEO and MD of KPIT Technologies, said, “Our medium-term business fundamentals and growth drivers remain unchanged. While the geopolitical situation and economic uncertainty across geographies are leading to a softer macro environment, we keep a watchful eye on our clients’ business priorities.”
In the near term, KPIT Technologies expects sustained growth in the passenger vehicle segment, along with plans to increase client engagement and expand services in the commercial vehicle vertical. The management plans to expand into the off-highway four-wheeler segment in the near term and to broaden its operations to other segments in the mobility space in the longer-term.
This asset management company rose 5.5% on Tuesday, following an 18.6% YoY surge in net profit to Rs 244.4 crore in Q2FY24. The stock has also risen by 20% over the past month, helping it appear in a screener of stocks near their 52-week highs with significant volumes.
Its revenue improved by 20% YoY to Rs 397.5 crore during the quarter, and it beat Trendlyne’s Forecaster estimates for net profit and revenue by 12.5% and 12.6%, respectively.
Growth came on the back of a 23% YoY increase in assets under management (AUM) from mutual funds to Rs 3.5 lakh crore during the quarter. The improved mutual fund AUM also contributed to an 18 bps QoQ increase in its equity market share to 6.5%. This growth is aided by a boom in the mutual fund market, which has been growing at a CAGR of 21% over FY20-23. With mutual fund penetration in India as a percentage of GDP at 14%, much lower than the global average, there is significant growth potential for AMCs.
In Q1FY24, the company was selected to oversee the Employees' Provident Fund Organization (EPFO) and Corpus for Exchange-Traded Fund (ETF) investments, which began in early July 2023. The management foresees an additional AUM of Rs 1.5 lakh crore, with an annual profit impact of Rs 5-6 crore in the future.
The firm’s overall market share (including ETF, equity and debt) increased by 16 bps YoY to 7.5%. Sundeep Sikka, the ED and CEO of the company, commented, “We continue to witness an uptick in overall market share, driven by gains across most asset classes and a strong increase in equity market share.”
Post results, Axis Direct maintains its ‘Buy’ rating on the stock with an upgraded target price of Rs 430 per share. This indicates a potential upside of 9.3%. The brokerage believes that despite the relatively lower penetration of mutual funds in India, the AMC is well-positioned to enhance its AUM growth in the future. It expects the company’s revenue to grow at a CAGR of 13.8% over FY23-25.
This IT consulting and software company hit its all-time high of Rs 593 on Friday and rose by 11.1% in the past week. The surge in price comes after the company reported a 5.5% QoQ rise in its Q2FY24 net profit to Rs 145.1 crore, while its revenue grew by 3.8%. It beat Trendlyne Forecaster’s net profit and revenue estimates by 5.7% and 1.4%, respectively. The company also features in a screener for durable stocks with improving cash flow.
The growth was led by its performance in the Americas, which accounted for 85.8% of revenue and a 5.3% QoQ rise. The manufacturing, BFSI, and digital & cloud segments have grown by 4.3%, 5.3%, and 11.9% QoQ, respectively. Its EBITDA margin expanded by 52 basis points QoQ to 15.7% despite higher wages and subcontract costs.
Deal bookings during the quarter were robust, and recovered from a weak Q1FY24. Birlasoft won a $100 million-plus deal from an existing client and booked new deals worth $167 million during Q2FY24.
The management has guided for a muted Q3 due to high attrition (27.4% in Q2FY24), which has impacted the IT sector as a whole. But the company says it will be able to limit these attrition effects, and expects growth to recover in Q4. Speaking about future prospects, Chief Financial Officer Kamini Shah said, “We continue to win deals, generate strong cash flows, and are also seeing moderating attrition levels, all of which gives us the confidence to deliver healthy growth in FY24.”
HDFC Securities maintains its ‘Buy’ call on Birlasoft on the back of an upward earnings growth trajectory, supported by an extensive service portfolio, better market positioning compared to peers, and recent management changes.
This realty firm rose 2.8% on October 27 as its Q2FY24 net profit increased by 43.4% YoY to Rs 456.8 crore due to lower operating costs. According to Trendlyne’s Technicals, the stock rose 15.2% and outperformed the Nifty Realty by 2.6% in the past week.
In Q2FY24, the company’s revenue improved by 76.8% YoY to Rs 1,243.8 crore, exceeding Trendlyne’s Forecaster estimates for revenue and net profit by 28.5% and 53.3%, respectively. The company’s operating profit margin has also improved by 7.3% YoY. This helped the company appear in a screener of stocks with improving operating profit and margins.
The rise in revenue was driven by robust pre-sales bookings of Rs 970 crore across Sky City in Borivali, 360 West in Worli, and a pickup in sales in Enigma in Mulund. The company anticipates launching new projects with a gross development value of Rs 1,800 core in H2FY24, and has expanded into Northern India with projects in Gurugram.
The management expects the Borivali Mall to be completed by Q4FY24, which will add a rental income of Rs 350 crore to its yearly pot. The Commerz III project, slated for completion by Q1FY25, is projected to add an annual rental income of Rs 500 crore. The company has reduced its net debt, thanks to a robust cash flow of Rs 700 crore from its core business. This has resulted in a 3.9% QoQ increase in the closing cash balance.
Vikas Oberoi, the Chairman & MD of the company, said, “We believe that the real estate market will continue its upward trajectory, driven by strong demand for established brands, spacious apartments and a desire for home ownership. We expect good demand in retail, fueled by the festive season and increased consumer confidence”.
ICICI Securities expects the company’s rental income to rise to Rs 1,130 crore in FY25E from Rs 290 crore in FY23, as rental operations from these new projects start from Q1FY25E. The Pokhran Road project is also expected to add value to the company’s revenues, leading the brokerage to maintain an “Add” rating on the stock post its Q2FY24 results.
This FMCG firm has risen over 4.7% in the past two days, after announcing a 20.6% YoY increase in net profit to Rs 432.8 crore in Q2FY24. The jump was driven by a moderation in raw material prices. According to Sudhir Sitapati, the Managing Director and CEO, “The quicker-than-anticipated integration of Raymond Consumer Care and favourable palm oil costs led to profit growth”.
Meanwhile, its revenue has increased by 6.2% YoY to Rs 3,601.9 crore, marginally beating Trendlyne’s Forecaster estimates by 0.6%, led by healthy growth in overall volumes. The company has risen 2.9% over the past month, outperforming the FMCG sector by 1.1%.
During the quarter, sales of Godrej Consumer’s homecare segment (which contributes around 36% of revenue) grew 5% YoY, led by air fresheners. However, the personal care segment, which makes up 59% of revenue, saw a 1% contraction due to muted growth in the hair colour range.
In international markets (which make up over 40% of total revenue), Godrej Consumer’s Indonesia business saw an 11% YoY growth in volumes, aided by its household insecticide business, as well as a favourable macro environment. The Africa, US & Middle East business recorded a 3% growth in volumes. Sudhir Sitapati said, “The company plans to reorganise the hair fashion segment in small East African countries, including Kenya, to improve profitability.”
Following the earnings release, Motilal Oswal reiterated its ‘Buy’ rating on Godrej Consumer Products with an upgraded target price of Rs 1,150. The brokerage has a positive outlook on the company’s international business and expects it to deliver double-digit sales growth over FY23-25E. As a result, the company features in a screener of companies where brokers have upgraded their recommendations or target prices over the past three months.
Trendlyne's analysts identify stocks that are seeing interesting price movements, analyst calls, or new developments. These are not buy recommendations.
