After the recent turbulence in markets, it is interesting to look at some pockets which are holding on to their gains. Asahi India Glass and Schaeffler India outperformed their industry stock price rise in FY22, till date. Asahi India Glass’ stock price increased by 55% and Schaeffler India’s stock price rose 80.3%. L&T Technology Services and Tata Elxsi also performed better than their industry average. L&T Technology Services' stock price increased by 70.2% in 1 year while Tata Elxsi’s price jumped 157%. 

The fact that these companies’ Q3FY22 results saw them post decent margin gains could be the reason for their outperformance. Asahi India’s operating profit margin is up by 270 bps YoY to 26% and Schaeffler India’s margin rises 90 bps YoY to 18.9% in Q3FY22. This is because of improved sales and an increase in price realizations.

L&T Technology and Tata Elxsi provide end-to-end engineering solutions. This gives these companies the advantage of earning higher margins. L&T Tech’s operating profit margin increased 210 bps YoY to 21.8% and Tata Elxsi’s operating profit margin rose 310 bps YoY to 33% in Q3FY22.

Companies are working on improving their financial metrics as we near the end of FY22. However, the Russia-Ukraine conflict escalating into a full-blown war has scared stock markets across the world. The Russia sanctions have also caused ripple effects in oil prices, supply chains and consumer sentiment, potentially hampering the performance of various industries in Q4.