1. KPIT Technologies: This IT consulting & software company reached its all-time high of Rs 813 per share on Wednesday after posting strong net profit growth of 20.4% QoQ to Rs 100.5 crore in Q3FY23. Growth from the UK & Europe and rest of the world (ROW) markets aided an improvement in the company’s revenue by 23.2% QoQ to Rs 917.1 crore. As a result, it features in a screener of stocks with increasing revenue for the past eight quarters. Both revenue and net profit beat Trendlyne’s Forecaster estimates by 4.2% and 5% respectively.

The rise in revenue in Europe comes after KPIT’s subsidiary, KPIT Technologies GmbH acquired four companies under the Technica Group for a total consideration of Rs 640 crore on September 21, 2022. Additionally, a leading European OEM selected KPIT as its key partner for next-generation electronic control units (ECU) while Renault Group selected KPIT as a strategic technology partner on November 23, 2022.

As a result, revenue from UK & Europe rose 48.2% QoQ in Q3, despite a broad economic slowdown in the region. Kishor Patil, Co-founder, Chief Executive Officer (CEO) and Managing Director of the company commented, “Q3FY23 has been better than expectations. Our performance gives us confidence in beating our FY23 growth outlook.”

The stock ranks high in Trendlyne’s checklist with a score of 78.3%. However, the company has a high trailing twelve-month or TTM PE ratio of 60.4 against the industry PE average of 29.6. Because of the high PE ratio compared to its historical levels, the company features in the PE sell zone. 

2. Britannia Industries: This FMCG stock’s Q3FY23 net profit surged 2.5X YoY to Rs 932.4 crore. The surge in net profit was because of an exceptional gain reported by the company. The gain amounted to Rs 359 crore (net of tax) and was received by selling a stake in Britannia Dairy to Bel SA. As inflation moderated, the company’s operating margin improved by 447 bps YoY to 18.14%. Price hikes also helped in the growth of margins. The management plans to continue with gradual price hikes in the coming quarters. It also expects the partnership with Bel SA to drive sales in the under-penetrated cheese market. Net sales for the company grew 16.2% YoY to Rs 4,101.5 crore on new product launches, growing customer franchise and market share gains.

The stock was trading near its 52-week high before touching an all-time high of Rs 4,596 in a volatile market today. Removing the exceptional gains from the net profit, Britannia beats Trendlyne’s Forecaster estimates by 21.6%. It shows up in screeners of stocks with increasing revenue and profit for the past two quarters. It also is in a screener of stocks with strong momentum growth.

Foreign brokerage Jefferies has maintained a ‘Buy’ on the stock as its margin growth beat expectations on low input prices and raw material inventory. It has upgraded its target price by 14.4% to Rs 5,000. ICICI Securities maintains its ‘Add’ rating and expects its revenue CAGR to grow by 13% over FY22-24E. The outlook for the FMCG sector looks good as the Centre’s relief for the middle class in the Union Budget 2023-24 is likely to improve customer demand.

3. AIA Engineering: This other industrial goods manufacturer’s stock rose 12.4% over the past week till Thursday, on account of its Q3FY23 results beating the street’s expectations. The company’s net profit and revenue beat Trendlyne’s Forecaster estimates by 64.9% and 5.8%, respectively. Its net profit jumped more than 2.5X YoY to Rs 352.5 crore on the back of higher realisations, strong sales volumes and falling raw material and power & fuel costs. Only freight expenses increased YoY, which the company was able to pass on to its customers.

Cost declines helped the  EBITDA margin surge by 10.8 percentage points YoY to 29.8%. The firm shows up in a screener for stocks in the PE Buy zone with a high durability score and rising momentum.

The company’s volume grew by 23% YoY to 71,439 metric tonnes per annum (mtpa) in Q3, led by a 60% growth in the non-mining segment. Its mining segment saw modest growth of 8% YoY in volumes. ICICI Securities expects demand from the mining sector to increase on the back of capacity expansion and elevated commodity prices. It believes AIA Engineering is well-placed to capitalise on this demand growth, given its technologically superior products. ICICI Securities upgraded its rating on the company to ‘Buy’ from ‘Hold’.

In anticipation of growing demand, the management said it has planned to expand its installed capacity to 5.2 lakh mtpa from 4.4 lakh mtpa. The company has planned a capex of Rs 300 crore, most of which will be utilised towards capacity expansion. However, the management does acknowledge a risk of volatility in commodity prices.

4. Data Patterns (India): The defence and aerospace solution provider released its Q3FY23 results on 28^th January. Data Patterns’ revenue grew by 2.5x YoY and 26.27% QoQ. On account of better execution, gross margins have expanded 140 bps QoQ while EBITDA margins for Q3FY23 were at 42.2% vs. 35.7% in Q3FY22. The order book at the end of Q3FY23 was Rs 888 crore. The company won orders worth Rs 163 crores in January 2023, which has increased the order backlog to Rs 1,014 crore. Development orders comprised 56% of total order backlog inflows as of Q3FY23. The production segment share was pegged at 38% with 6% from the services segment.

The management maintained its FY23-25 revenue guidance of 25-30% growth with a gross margin of 65% and EBITDA margin of 40%. The company is confident of winning orders to the tune of Rs 150-200 crore in Q4FY23. The management expects Rs 2,000-3,000 crore worth of orders in the pipeline for the next three to four years. The stock shows up in the screener for growth in quarterly net profit and increasing profit margin.

ICICI Securities says Data Patterns has the ability to deliver revenue and PAT CAGR of 29.3% and 28.5% respectively over FY22-25E. However, the stock has run up, limiting further upside given the rich valuations and no room for execution error at such multiples. The brokerage has revised its Buy rating to Hold.

5. Indian Hotels Company: This hotel company surged over 8% in trade on Wednesday after it announced strong Q3FY23 results. The Finance Minister’s announcement on the Centre’s support for the tourism industry in the Union Budget also added to the rise. The hotels industry rose over 5% in trade on the same day.

The company reported its highest-ever net profit of Rs 383 crore, up 403% YoY in Q3. IHCL also posted strong growth in revenues, up 54% YoY to Rs 1,743.5 crore. Its solid performance was driven by robust demand across markets as well as airline catering. As a result, the company features in a screener of companies that saw growth in net profit with an increasing profit margin (QoQ).

However, the occupancy rate remains below pre-covid levels at 72.1%. On the bright side, the average room rate jumped 25% to Rs 15,456, compared to pre-covid levels, due to a series of price hikes.

Commenting on the company’s strong performance during the quarter, Puneet Chhatwal, Managing Director & CEO of Indian Hotels, said that the demand outlook for the sector in 2023 remains robust with sporting events such as the hockey and cricket world cup, global events like the ongoing G20, and the increase in inbound travel. In 9MFY23, IHCL has added over 30 hotels to the pipeline and has opened 14 hotels, in addition to strong growth in amã Stays & Trails and Qmin.

ICICI Securities is positive about the company’s outlook due to its efforts in leveraging its existing brand equity to focus on new business segments. The brokerage upgraded its rating to ‘Buy’ from ‘Add’ and raised the target price to Rs 399 from Rs 366, implying a potential upside of 25.7%.

Trendlyne's analysts identify stocks that are seeing interesting price movements, analyst calls, or new developments. These are not buy recommendations.