1. Angel One:
This capital markets stock has soared by 11.2% over the past week, hitting its all-time high of Rs 2,369.7 per share. The surge comes as its net profit grew by 43.9% YoY to Rs 305.3 crore in Q2FY24, outperforming Trendlyne Forecaster’s estimates by 6.1%. As a result, Angel One appears in a screener of stocks with improving quarterly net profit and profit margin.
The company’s revenue improved by 40.6% YoY on the back of a higher number of active clients, growth in average daily turnover (ADTO) and increased number of orders. Its ADTO surged by 143.4% YoY during Q2FY24. The active client base also increased by 16% YoY to 4.9 million, helping Angel One maintain its position among the top three brokers. Its market share increased by 336 bps YoY to 14.6%.
Dinesh Thakkar, the MD and CEO of the company, said, “Our orders, a key revenue driver for our business, grew by 36% sequentially to over 338 million, marking a lifetime best, while the ADTO generated on our platform remains on an uptrend.”
Over the past year, Angel One (14.6%) has overtaken Upstox (6.6%) in terms of market share concerning the active client base. On the other hand, Groww took the top spot from Zerodha as of September 2023.
Post results, Motilal Oswal Financial Services maintains its ‘Buy’ rating on the stock with an upgraded target price of Rs 2,550 per share. This indicates a potential upside of 8.6%. The brokerage remains confident in the stock, given its strong growth in Q2FY24 and continued technology investments to strengthen its position. It expects the company’s revenue to grow at a CAGR of 16.5% over FY23-25.
2. Polycab India:
This consumer durables company – a historically strong performer currently trading at an eye-watering PE of 78 – has dropped by 2.4% since the announcement of its results on Wednesday. The decline is on account of a slowdown in its fast-moving electrical goods (FMEG) segment and demand tailwinds in the B2B business. However, the firm reported 28.9% growth in its cables and wires business. The firm's Q2FY24 profits beat Forecaster estimates by 10.4%.
During the quarter, Polycab’s revenue increased by 26.6% YoY to Rs 4,253 crore, led by the wires & cables and international businesses. The company’s net profit grew by 58.9% YoY to Rs 429.7 crore and EBITDA margins also improved by 160 bps YoY due to falling commodity prices and the sale of high-margin products. The firm appears in a screener of stocks with good quarterly growth in recent results.
Polycab has almost emptied its non-rated fan inventory in Q2FY24 and expects a revival in its lighting business. The company’s newly launched economy brand ‘Etira’ and premium brand ‘Hohm’ are seeing traction. Further growth is expected to be led by institutional demand, especially by growth in the real estate sector and affordable housing.
Commenting on the company’s performance, Inder T Jaisinghani, the Chairman and MD, said, “The company registered its best-ever first-half yearly revenues and profitability. A favourable demand environment, with multiple growth avenues, and the Centre’s focus on infrastructure development and structural reforms, as well as continued momentum in real estate has given us a good set of results.”
ICICI Securities maintains a ‘Hold’ rating on the firm but raises the target price to Rs 5,600 from Rs 4,100. The brokerage believes that strong institutional demand and a revival in its FMEG segment will help Polycab’s top-line growth.
3. Dalmia Bharat:
This cement company has fallen by 7.1% since announcing its result on Saturday. The decline came after QoQ decreases in the company’s net profit and revenue by 9.2% and 12.1%, respectively, in Q2FY24.
Despite the lackluster sequential performance, its profit rose by 156.1% YoY to Rs 118 crore, beating Trendlyne Forecaster’s estimate by 10.1%. Its revenue is also up by 7.5% YoY, at Rs 3,234 crore. Its EBITDA margins expanded by 5.8 percentage points YoY to 18.7% due to lower power & fuel and freight costs. The company features in a screener for stocks showing growth in operating profit and operating margins.
During the quarter, Dalmia Bharat lost market share in West Bengal and Bihar due to price hikes. In response, the management has implemented corrective measures and anticipates a positive swing starting from Q4.
According to the management, Dalmia Bharat has benefited from rising cement prices, particularly in the East, where costs surged by Rs 40-50/bag. Taking note of improved demand, it has also upped the price by Rs 30/bag in the southern market.
For FY24, the company is planning a capex of Rs 6,500 crore, including Rs 3,700 crore for the acquisition of Jaiprakash Associates’ (JPA) cement assets. Meanwhile, the company's net debt increased by Rs 290 crore to Rs 1,500 crore this quarter and is expected to swell further to around 3,000-4,000 crore with the conclusion of the JPA deal.
Motilal Oswal reiterates a ‘Buy’ call on Dalmia Bharat and expects its volume to clock a CAGR of 11% over FY24-26. It estimates an EBITDA/tonne of Rs 1,045 in FY24, as against Rs 901 in FY23, driven by lower opex.
4. Bajaj Auto:
This two-wheeler manufacturer rose by 7.5% over the past week till Friday, and also touched its 52-week high of Rs 5,510. This surge follows a 17.8% YoY increase in stock price comes on the back of its Q2FY24 net profit rising by 17.8% YoY to Rs 2,020 crore. It beat Trendlyne Forecaster’s net profit estimates by 15.1%. The management attributes this improvement in profitability to normalising commodity costs and a better product mix. The stock also shows up in a screener for companies with increasing cash flows from operations over the past two years.
However, this growth comes despite a 0.2% YoY dip in its Q2 sales volume. The slump in exports offset strong growth in the domestic market. falling by 0.2% YoY as growth in the domestic market was offset by a decline in exports. In contrast, Bajaj Auto's domestic On the domestic front, the company's retail sales increased by 22% YoY, outperforming the industry’s domestic retail sales growth of 10% YoY for the same period in Q2FY24.
The firm gained from the healthy demand for 125cc+ bikes in the domestic industry, which made up 51% of all two-wheeler sales in the 2-wheeler domestic market during Q2. Specifically, Bajaj Auto’s retail sales in this 125cc + segment grew by 36% YoY, outpacing the rest of the industry. Currently, Bajaj Auto The company has a 30% market share in the 125cc + segment, which and this segment accounts for 65% of its domestic volumes.
The management expects to drive growth in the near-to-medium term by increasing its market share in the 125cc+ segment through new launches. It also aims to sustain its 80% market share in the internal combustion engine (ICE) three-wheeler segment, and boost increase its presence in the electric three-wheeler market. Although the company’s exports have been sluggish are currently subdued, wholesales and retail sales in the key markets like of Africa, Latin America and Asia have started to improve on a QoQ basis. The firm expects exports to start recovering gradually as the inflation subsides in these key markets reduces.
5. Karur Vysya Bank:
This banking and finance company has risen over 6% since Monday and is currently trading near its 52-week high, after reporting healthy Q2 numbers. The bank reported its highest-ever quarterly net profit of Rs 378.5 crore (up 51.2% YoY), beating Trendlyne’s Forecaster estimates by 5.7%, owing to a sharp decline in provisions. As a result, it features in a screener of companies with increasing profits every quarter for the past four quarters. The bank’s net interest income grew 11.5% YoY to Rs 915 crore, helped by improved revenue from the treasury, corporate banking, and retail banking segments.
During the quarter, Karur Vysya’s deposits grew by 13.2% YoY, while its loan book was up by 15.3% YoY, driven by the MSME and housing segments. Its asset quality has also improved, as NPAs decreased by 91 bps YoY to 0.5%. According to Managing Director and CEO Ramesh Babu, "Our slippages are under control, and our gross slippages for the quarter is less than 1%, which is as per our guidance." He also highlighted the bank’s focus on retail deposit mobilisation, while maintaining a steady growth strategy.
Post Karur Vysya’s results, Emkay Global maintains its ‘Buy’ rating with an upgraded target price of Rs 185, implying an upside potential of 28.6%. The brokerage has a positive outlook on the bank, given its superior return ratios. It anticipates the bank to register its decadal best RoA and RoE at 1.5% and 16%, respectively, over FY24-26E.
Trendlyne's analysts identify stocks that are seeing interesting price movements, analyst calls, or new developments. These are not buy recommendations.
