The Baseline    
03 Nov 2021
Five Stocks Outperforming the Nifty50 Post Results

As results for the September quarter come in, we are seeing key stocks outperform the index post their earnings announcements. This screener looks at Nifty500 stocks that announced results at least one week ago, and have since beaten the Nifty50 index. While there are a good number of  IT stocks present (no surprise there), several old school businesses also turn up in the list, including auto, cement, and consumer electronics. We pick five stocks out of the 80+ present in the screener.

1) Orient Electric: Consumer electronics companies are back on the investor radar post Covid, and appliances business Orient Electric is an interesting outperformer, substantially beating the index post its results (it beat the Nifty50 by over 14.8% in the past week). Revenues for the company grew 37% YoY, exceeding analyst estimates. And despite increases in commodity costs during the quarter, the company saw strong segment growth especially in the home and office space.

2) TVS Motor Company: After a bruising year with lockdowns sinking demand for the auto sector, this two wheeler business saw strong topline growth, and its capex plans remain intact. TVS has maintained its capex guidance of  Rs 8 billion for FY22E, funded internally from accruals. The bullishness of the outlook is being driven by EV investments, new launches, and a focus on exports. But in the short term, dragons remain in the form of cost increases and supply chain shortages.

3) TCI Express: This logistics company has been another index outperformer, beating the Nifty50 by 11.2% over the past week. The company has been working on building a moat in its sorting centres and transportation network with IT investments, to halve processing time and speed up shipments. Its efforts in B2B offerings like pharma cold chains have also boosted its outlook with analysts. "Newer offerings expected to post EBITDA margins in 22-25% range in medium to long term," according to ICICISec.

4) L&T Technology Services: The IT companies under the L&T umbrella are all the rage. And LTTS is no exception, continuing to stoke investor interest by beating the index by 9.7% this week. The company saw its highest ever EBIT margins of 18.4% in the September quarter, despite the cost pressures in the industry. LTTS has raised its USD revenue growth guidance to 19- 20% from the previously stated 15-17%.

5) Ultratech Cement: This cement company is seeing bullishness from investors, outperforming the index by over 8% this week, and appears to be well-positioned to take advantage of demand recovery post the monsoon. The extended rains were a dampener (despite which Ultratech's volumes grew 8% YoY in Q2), but now the management believes that spending will see a strong resurgence, with the push for rural housing amid healthy government crop procurement.

See the full screener.

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04 Nov 2021
05 Nov 2021
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