This airlines company fell by 3.3% on May 24 after announcing its Q4FY24 results. InterGlobe Aviation's (IndiGo) net profit missed Trendlyne’s Forecaster estimates by 25.9%, despite growing by 106.1% YoY to Rs 1,894.8 crore. The rise in profit was due to healthy demand for air travel, and also due to a deferred tax return of Rs 124.2 crore. However, the company highlighted that FY24 saw headwinds in the form of aircraft groundings. IndiGo currently has 70-80 aircraft grounded due to engine issues.
During the quarter, revenue grew by 26.7% YoY to Rs 18,505.1 crore, thanks to improvements in passengers carried and higher capacity.IndiGo’s passengers carried grew by 14% YoY to 2.7 crore people over the quarter, while the seating capacity increased by 14.4% YoY.
The company’s share price declined following its results announcement. Over the past year, however, its share price has risen 76.7%. During Indigo’s earnings call, Petrus Elbers, the CEO said, “New travel trends are emerging, such as experiential travel, growth in the spirit of tourism, and increasing demand for international travel”. To keep up with these changing trends, the company announced plans to unveil business-class services by the end of the year. Currently, IndiGo offers only economy class, with a fleet size of 367 as of FY24.
The airline, which has a dominant 60% market share in the domestic market, is now focusing on expanding its long-haul international operations. In April, it announced plans to foray into the wide-body aircraft space, and placed an order for 30 Firm Airbus A350-900 aircraft. Currently IndiGo has a pending order book of around 1,000 aircraft to be delivered up to 2035, offering long-term visibility. IndiGo has also planned partnerships and loyalty programs to boost its international presence. With this expansion and its move towards becoming a full-service airline, it will compete both with Air India and Vistara (whose merger is in progress) and with international carriers.
Morgan Stanley has an ‘Overweight’ rating on IndiGo with an upgraded target price of Rs 5,142. The brokerage believes the company is set to change over the next few years, with loyalty programs, business class, and long-haul international plans. However, it expects near-term cost pressures but says the company has the right strategy, as travel trends are changing.
This auto parts maker hit a new 52-week high of Rs 157 on Friday after surging 10.3% over the past week following its Q4 and FY24 results announcement. The company reported operating revenue growth of 20.4% YoY to Rs 27,058.2 crore for the quarter, beating Trendlyne’s Forecaster estimates by 3%. Its net profit rose 109.8% YoY to Rs 1,371.8 crore, beating estimates by an astonishing 70%.
The surge in net profit is mainly due to the compensation the company received for hyperinflation in Argentina. The finance cost also decreased by 16.3% YoY to Rs 63.8 crore. Motherson received board approval to raise Rs 5,000 crore through NCDs.
The company has announced six new greenfield projects in India, China, and Poland, adding to the 12 announced previously. It plans to invest Rs 2,000 crore in FY25 for these greenfield projects, with 70% allocated to non-automotive businesses such as aerospace, consumer electronics, as well as health and medical. Samvardhana’s aerospace subsidiary, AD Industries, has become a key supplier of structure and engine components to Boeing and Airbus.
Chairman Vivek Sehgal said, “The majority of growth capex is in emerging markets, and our 18 greenfields are on track to come onstream in FY25 and FY26.” He noted that the company is investing in future growth while still reducing its debt. In the past quarter, the company reduced its debt by Rs 1,800 crore, bringing the current total to Rs 17,351 crore.
Morgan Stanley maintains an ‘Overweight’ rating on Samvardhana Motherson with a higher target price of Rs 176, indicating a potential upside of 16.4%. The brokerage highlights that earnings support is likely to come from its acquisitions, sharp non-auto growth, and improvement in the balance sheet.
This pharma stock surged for three consecutive sessions to touch its all-time high of Rs 2,795 per share on Monday after its net profit grew by 56.4% YoY to Rs 449 crore in Q4FY24 on the back of price hikes. Revenue increased by 11% YoY to Rs 2,776 crore, helped by improvements in the Indian, Germany, and Brazil markets. But net profit missed Trendlyne’s Forecaster estimates by 3%. The company’s board of directors approved raising Rs 5,000 crore by issuing equity shares through a qualified institutional placement (QIP). It features in a screener of stocks with increasing return on equity (RoE) over the last two years.
Growth in the Indian market (50% of total revenue) was driven by new launches in chronic therapies, an expanded field team, and increased sales from brands on the prescription side (Shelcal 500, Unienzyme and Tedibar) and over the counter segments. The Brazil market (16% of total revenue) witnessed growth on the back of price hikes, higher sales volume and new drug launches. Lastly, the German market (10% of total revenue) grew on account of higher tender wins and new product launches.
Speaking after the results, the company’s CFO and Executive Director, Sudhir Menon, said, “We expect EBITDA margins to improve by 50-100 bps in FY25, on the back of higher traction in the branded generics segment and better operating leverage. We are also planning eight launches in the next year for the US market and are aiming to hit a revenue target of $250-300 million (approx. Rs 2,000-2,500 crore) in the next 3-4 years.” For context, the US market generated a revenue of Rs 1,078 crore in FY24, so this implies a two-fold increase in the next 3-4 years.
Post results, ICICI Direct retains its ‘Buy’ call on the stock with an upgraded target price of Rs 3,080 per share. This indicates a potential upside of 15.9%. The brokerage believes that the company’s ability to market drugs of acquired business brands (Elder, Unichem and Curatio) will drive growth. It expects the company’s revenue to grow at a CAGR of 11.3% over FY25-26.
This aluminium products manufacturer rose 6.1% in the past month and hit its all-time high of Rs 713.5 on Wednesday. Its net profit grew by 31.7% YoY to Rs 3,174 crore in Q4FY24, in line with estimates, while revenue increased marginally. The profit growth was due to decreased inventory costs and raw material expenses, as global aluminum prices in Q4 remained flat and copper prices fell 5.4% YoY.
The company’s India aluminium volumes (downstream and upstream) rose 17% YoY and 4% YoY, respectively, on the back of higher beverage packaging shipments to the Americas. The copper segment reported an all-time high sales volume, rising 15% YoY.
Analysts expect domestic demand for aluminium to double to 9 million tonnes (MT) in the next 10 years, on the back of the infrastructure, packaging, electric vehicle and renewable energy spaces. The management hopes to ride this growth, with plans to spend Rs 6,000 crore in capex in FY25. Most of the allocation will be towards aluminium downstream capacity and specialty alumina domain, focusing on value-added products.
In Q4FY24, Hindalco’s debt to EBITDA reduced to 1.2x from 1.5x. The management expects to maintain a low debt ratio despite the high capex. MD Satish Pai says, “All our strategic capex in India is mapped to the cash flow generation in the businesses, and are in line with our capital allocation policy.”
Management highlights increased competition in specialty products such as container foils due to higher exports from China. However, this may be mitigated with the government sanctions on imports of low grade aluminium, copper, and nickel from December 2023.
In other news, the company’s promoter Birla Group Holdings acquired a 1.2% stake in the company and now holds an 11.4% stake. The company also appears in a screener for stocks where mutual funds have increased their shareholding over the past two months.
Axis Direct maintains a ‘Buy’ call on Hindalco Industries due to its expansion plans such as the Bay Minette, Copper Inner Grooved Tubes and Aluminium downstream projects. The brokerage is optimistic as these expansions will increase EBITDA per tonne after commissioning in FY27.
This construction & engineering company declined by 6.9% over the past week and announced its results on May 29. The firm missed Trendlyne Forecaster estimates for Q4FY24 for revenue by 16.4% and net profit by 9.2%. The Q4FY24 numbers were disappointing – the company’ net profit declined by 9.2% YoY to Rs 126.1 crore, while its revenue declined by 5.4% YoY due to a fall in domestic leasing and export revenue. The stock shows up in a screener for stocks in the sell zone.
RITES is mainly into infra projects consultancy, turnkey construction, and export of railway vehicles. The company caters to a diverse range of clients across various sectors, including government agencies like Indian Railways, private companies, and international organizations. The company’s order book stands at Rs 5,690 crore as of Q4FY24, out of which a large part worth Rs 2,600 crore is from the consultancy vertical and Rs 2,050 crore worth of orders are from turnkey construction projects.
Analysts predict that the company’s export segment will pick up by H2FY25. After a prolonged period without export activity, the company recently won two export orders amounting to Rs 1,200 crore. These orders were secured through agreements for the provision of 10 locomotives to CFM Mozambique and 200 locomotives to Bangladesh Railways. Analysts expect the company to grow its revenue at a CAGR of 23% over FY25-FY26E.
Rahul Mithal, Chairman and Managing Director, RITES said: ”From getting export orders of Rs 1,200+ crore after a gap of more than 4 years, and diversifying our Quality Assurance business portfolio, we are on the right track and we will capitalize aggressively on this momentum in the coming FY.” He also guided a capex target of Rs 100-140 crore for FY25 and expects to maintain at least 40% of the order book from the consultancy business.
Axis Direct has given a "Hold" rating on Rites with a price target of Rs 715. The brokerage values the company at 24x FY26 EPS to arrive at a TP of Rs 715/share, implying no upside from the CMP. The brokerage awaits for a better entry point as it notes that higher competitive intensity may impact margins.
Trendlyne's analysts identify stocks that are seeing interesting price movements, analyst calls, or new developments. These are not buy recommendations.
