With the Indian rupee depreciating against the dollar, we take a look at companies with high exposure to the international markets, giving them a relative cushion in revenues. We identified companies that meet three key criteria - high export revenues, a high Trendlyne Durability Score and a high Piotroski score.
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UPL: This agrochemicals company’s revenue grew 19.5% YoY to Rs 46,240 crore, out of which exports contributed 87.7% of total revenue. This company is currently in the PE Buy zone and has a high piotroski score. It also has a high Durability score of 80. In FY22, the company’s total revenue rose 19.4% to Rs 46,521 crore. The majority of revenue comes from Latin America (Rs 18,040 crore), followed by North America (Rs 7,810 crore), then Europe (Rs 6,890 crore) and the rest of the world (Rs 7,810 crore). The growth in these regions was driven by herbicides and insecticides. The company plans to make new investments in 22 countries which will lead to 1.5-3% CAGR revenue growth over next five years.
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Tata Consultancy Services: This IT services company’s revenue grew 17.9% YoY to Rs 1.95 lakh crore in FY22, and exports contributed nearly 95% to the total. Majority of revenues come from the Americas (52.2%), then Europe (31.9%) and the rest from Asia Pacific and West Asia. Although the stock is currently in the ‘PE Sell zone’, according to Trendlyne’s Check Buy or Sell feature, it has a high Piotroski score of 7 and high financial strength with a Durability score of 70. Key themes expected to drive client spending, and continued business momentum (which will drive revenue growth) for the company in FY23 are new products and services aligned to sustainability, and AI-led transformation of IT/business operations.
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Dr. Reddy's Laboratories: In FY22, this pharmaceutical company’s revenues grew 13.1% YoY to Rs 21,545.2 crore and profits grew 11.8% YoY to Rs 2,182.5 crore. Exports generated $1.8 billion, which made up 64% of its total revenue. The company’s biggest market is in North America, which contributed $987 million to its revenue in FY22. This drug maker lies in the ‘PE Neutral Zone’ and is financially robust with a high Piotroski score and a Durability score of 75.
In FY22, the company launched 20 products in the US and plans to launch another 20 in FY23. The management says it has a robust pipeline of 90 ANDAs (abbreviated new drug applications), which it expects would support its long-term aspirations in the US. In Europe, the company launched 34 new products during FY22 and expects strong growth in sales in FY23.
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HCL Technologies: This IT company earns more than 90% of its total revenue of Rs 86,718 crore from exports in FY22. Nearly 62% of its revenue comes from the Americas, 29.1% from Europe and the remaining 8.9% from the rest of the world. According to the company’s FY21 annual report the company’s exports made up 97% of its total revenue. HCL Technologies signed a total of 52 significant large services and product deals in FY22, led by life sciences and healthcare, technology, financial services, manufacturing and oil & gas. All round growth across verticals and geographies YoY was led by Telecom, Media, Publishing & Entertainment, Lifesciences & Healthcare, Manufacturing, Technology & Services, and Financial Services. The stock is in Trendlyne’s ‘PE Neutral Zone’ with a Piotroski score of 8 and a Durability score of 95.
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PI Industries: In FY22, the company’s revenue grew 15.8% YoY to Rs 5,299.5 crore and profit grew 14.3% YoY to Rs 843.8 crore. Exports contributed 75.3% to its total revenue. The company’s exports rose 20% YoY to Rs 3,990.2 crore, on new customer additions and product launches. The company lies in Trendlyne’s ‘PE Buy Zone’ with a Piotroski score of 7 and a Durability score of 70. The company added 8 new clients during FY22 and its export order book at the end of March 2022 stood at $1.4 billion. It guided a 20% growth in exports in FY23, driven by new and green technology products. The company also increased its capex to Rs 500 crore for FY23 from Rs 300 crore in FY22.
