1. Tanla Platforms: This software and services company’s share price grew by 79.4% in the past quarter and hit its 52-week high of Rs 1,317.5 on Monday. In Q1FY24, the company’s profit improved by 12.6% QoQ, while the revenue increased by 9.3%, beating Trendlyne’s Forecaster estimates by 16.2% and 7.6%, respectively. The company also features in a screener for stocks with QoQ growth in net profit and increasing profit margin.

The revenue from the enterprise communications segment(90% of total revenue) has also risen by 9% QoQ, marking growth after four quarters in a seasonally weak period. It was driven by an increase in transactional app-to-customer messaging volume and a price hike in the international long-distance segment. The Chairman and Chief Executive Officer Uday Reddy said, “We are now in the phase of price expansion and expect further increases in  Q2.” The firm anticipates price hikes in its domestic business to drive growth.

Tanla Platforms recently acquired ValueFirst Digital Media for $45.5 million, leading to a gain in market share of over 35% in India. Speaking about the acquisition, Reddy said, “We expect to achieve double-digit EBITDA in a couple of quarters.” 

The digital platforms segment’s revenue also grew by 8% QoQ, driven by Wisely, a patented anti-phishing platform. Wisely has completed proof-of-concept with three leading banks and has a revenue potential of Rs 50-100 crore per year. “The focus in Q2 will be on accelerating the go-to-market strategy and commercial holders,” Reddy added.

HDFC Securities is optimistic about Tanla Platforms and expects a revenue CAGR of 24% over FY24-26, led by a revival in the enterprise business and new product launches in the platform business. 

2. Cipla: This pharma company’s stock surged by 9.6% on Thursday, and hit a new all-time high of Rs 1,219.4 per share, as its net profit jumped by 45.1% YoY to Rs 995.7 crore in Q1FY24. This helped the company beat Trendlyne’s Forecaster estimates for net profit by 22.7%. Its revenue has also risen by 17.7% YoY to Rs 6,329 crore, helped by increased sales from India, the US, and South Africa, with improvements in the prescription, trade generic, and consumer health segments.

Cipla’s EBITDA margin also expanded by 230 bps YoY to 23.6%, owing to lower raw material costs and reduced price erosion in the US market due to declining competition. This helped the company appear in a screener of stocks with increasing net profit and profit margin (YoY). 

Umang Vohra, Managing Director and Chief Executive Officer (CEO) of the company, said, “The company plans to launch 30 to 35 products in the Indian market, which will contribute to 2.5-3% of revenue. A large number of these products will be in the respiratory segment.” The management is optimistic about revenue growth in the US business.

Post results announcement, Motilal Oswal Financial Services maintains its ‘Neutral’ rating on the stock with a target price of Rs 1,130 owing to limited upside at the current price. This indicates a potential downside of 4.2%. However, the brokerage is optimistic about the company's profitability growth, as it expects a revival in the US market and strong performance in the branded generics segment in India and South Africa.

According to reports, the promoters of Cipla are considering  selling a portion of their overall stake in the company. However, Cipla has issued a clarification stating that they are not aware of any specific event that requires disclosure under the listing regulations.

3. Nestle India: This FMCG stock declined by 3.3% in Thursday’s intra-day trade after announcing its Q2CY23 results. This is despite its net profit rising by 35.5% YoY and revenue growing by 15.4% YoY. However, this has not cheered investors as its revenue growth seems to be mostly led by price hikes, with underlying volume growth of 4-5%. According to reports, its volume growth is below the street’s estimates.
   
   Although the firm saw healthy growth on a YoY basis, its net profit and revenue fell by 5.2% and 3.6% QoQ respectively. The stock shows up in a screener for companies with declining revenue, profit and operating profit margin on a QoQ basis. 

The company’s top-line growth is driven by a 14.6% YoY increase in domestic sales, with healthy contributions from categories like milk products, beverages and nutrition, despite inflationary pressures. Suresh Narayanan, Chairman and MD of the firm, said, “Our RURBAN strategy was successful as we expanded our distribution footprint in key portfolios, leading to higher penetration. We witnessed strong growth across megacities and metros, robust performance in Tier 1 to 6 towns, and continued strength in rural markets.” 

The company’s gross margins have expanded by 80 bps YoY to 54.6%, aided by stable fresh milk prices and declines in prices of edible oils, wheat, and packaging materials. However, its beverages segment saw inflationary pressures due to elevated robusta (coffee beans) prices, which are expected to remain volatile. ICICI Securities believes that a correction in milk prices will free up more resources for advertising spends and innovation to drive growth.  

4. Mphasis Ltd: The software and services firm saw its stock price increase by 22.3% in the past month, according to Trendlyne’s Technicals. On July 20, the company announced its Q1FY24 earnings, reporting a decline of 3.2% QoQ on a constant currency basis. However, the stock rose 5.3% the next day. This rise was primarily driven by high deal wins in the quarter, which amounted to $707 million, almost twice the average of the past four quarters. 

The decline in revenue was on account of a cut down in discretionary spending by clients in the banking and mortgage sector. The firm is trying to diversify itself by acquiring deals in the non-banking and financial services (BFS) sector. Nearly 60% of the deal wins are from non-BFS verticals in the quarter.

The firm has launched an AI business unit which bagged nearly one-third of the deal wins in Q1FY24. This includes one deal with a ticket size greater than $100 million. Its EBIT margins expanded by10 bps QoQ to 15.4%. The company plans to increase its margins to around 16% in the following quarters by improving the productivity of its offshore workforce. Its net profit declined by 2.2% QoQ. Mphasis shows up in a screener for stocks with strong momentum, with prices above short, medium and long-term averages.

Commenting on the earnings, Mphasis CEO Nitin Rakesh said, “Revenue growth will pick up in FY24 as the firm currently has a good pipeline of deals. The mortgage industry will also ramp up from current levels.”

However ICICI Securities holds a less favourable view. It cites the global slowdown and banking crisis in the US and Europe, which have led to delayed decision-making around discretionary projects and spending cuts in banking and capital markets. This will lead to muted growth for Mphasis. The brokerage has downgraded its rating from ‘Hold’ to ‘Sell’.

5. Jyothy Labs: This personal products company has risen over 25% since Monday after reporting robust Q1FY24 results, beating consensus estimates. This recent surge has driven the company’s share price up by 84.2% in the past year. However, over five years, the share price has grown by only 36.2%. 

During the quarter, Jyothy Labs’ revenue increased by 15.1% YoY to Rs 687.1 crore, beating Trendlyne’s Forecaster estimates by 4.7%. This was fueled by strong performance across the company’s major segments. Its net profit jumped by 101.7% YoY to Rs 96.3 crore, and beat estimates by 27.2%. This was due to moderating input costs and an increase in the disposable income of consumers. 

The company’s fabric care segment (which markets Henko and Ujala, and contributes 43% of the total revenue) has seen an 18% YoY rise in revenue. Its dish wash segment (that houses brands like Exo Bar and Pril) also improved by 11% YoY. 

Managing Director M R Jyothy said, “The company will deliver double-digit revenue growth, and EBITDA margin will be in the range of 15-16% in FY24.” She also highlighted the company’s plan to strengthen distribution, increase marketing investment, and optimize cost structures. 

Following the company’s strong performance, ICICI Securities maintains its ‘Buy’ rating but raises its target price by 16.8% to Rs 340. The brokerage says the company remains its top pick in the consumer staples space and is positive about the management’s strategy of prioritising market share gains and volume growth. As a result, the company features in a screener of stocks where brokers have upgraded their recommendations or target prices in the past month.

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