1. Amber Enterprises India:

This consumer electronics company closed 6.5% higher in intraday trade on Wednesday. This uptrend was led by its revenue increasing by 23.5% YoY and EBITDA margin expanding by 154 bps YoY due to lower input costs. This rise comes despite its net loss widening by 130% YoY to Rs 6.9 crore in Q2FY24. It also missed Trendlyne Forecaster’s net loss estimates of Rs 3.2 crore. The firm’s bottom line was impacted by higher finance costs and depreciation expenses, which rose by 49.3% and 42.2% YoY, respectively. The stock shows up in a screener for companies with cash flows from operations improving over the past two years.

Also, the street’s expectation of healthy growth from H2FY24 onwards pushed up the stock’s prices. According to reports, several analysts retained their ratings, while some raised the target price of the consumer electronics manufacturer. For instance, Jefferies India kept its ‘Buy’ rating on the company and raised its target price to Rs 3,990, implying an upside of 37.2% from the closing price on Friday. The brokerage expects the firm’s sales in the electronics and mobility divisions to double over the next two years.

The management’s focus is on increasing revenue contribution from the non-room air conditioners (non-RAC) segments, such as the electronics and mobility segments. Jasbir Singh, the CEO of Amber Enterprises said, “We've guided that the electronics division and the mobility division, which is the railway subsystem division, are likely to double their revenues in the next two years”. He expects this growth to be driven by new client additions, new product launches and rising order books. 

The firm expects its overall margins to improve as commodity costs have started to normalize. It plans to reduce its net debt to Rs 650-680 crore by the end of FY24, from its current levels of Rs 960 crore in Q2FY24.

2. CreditAccess Grameen: 

This financial services stock has outperformed the Nifty Financial Services index by 21.5% in the past month. The stock rose 18.1% in the past month according to Trendlyne’s Technical. The stock is trading at a 52-week high. 

In Q2FY24, the firm's AUM grew by 36% YoY to 22,438 crores. The disbursements in the quarter grew by 13.5% YoY to Rs 4,966 crore. The growth in AUM was led by the new customer addition and higher ticket size. The NIM of the bank is one of the highest among its peers at 13.1%. However, the margins are expected to compress owing to an increased cost of funds and limited scope to raise interest rates. The bottom line was also aided by lower provisioning. The gross NPA remains at 0.8% backed by high-rated customers. 

The bank is also rapidly expanding and investing in newer product lines like loan against property (LAP), two-wheeler loans, and housing loans. This stock shows up in a screener for companies with consistently high return stocks for five years in the Nifty 500.

In its future outlook, CreditAccess Grameen Managing Director, Udaya Kumar Hebbar has indicated that “CreditAccess Grameen will focus on geographical expansion along with building a non-micro finance (MFI) loan book. The AUM growth is expected to be at 24-25% and NIMs at 12.7% for FY24. Most of the growth would be from newly launched non-MFI verticals and geographical expansion”.

According to Axis Securities, healthy NIMs and a strong rural presence will help in maintaining the MFI loan book, while expansion into the retail side will be an added advantage. Also, the lower NPAs will result in lower credit costs. The brokerage has maintained a ‘Buy’ rating on the stock.

3. BSE: 

This stock exchange company hit an all-time high of Rs 1,912.8 on Friday and grew 20.8% in the past week. The rise comes after the company announced a hike in transaction costs for equity derivatives, effective November 1. Under the new transaction fee structure Rs 500 per crore will be charged for transactions with a turnover of less than Rs 3 crore. Whereas Rs 3,750 per crore will be charged for transactions with a turnover between Rs 3-100 crore. Rs 3,500 per crore for transactions with a turnover between Rs 100-750 crore, going up to Rs 2,000 per crore for transactions above Rs 2,000 crore.

BSE’s derivatives market share has also grown to 7.4% by September 2023 from 0% in April 2023. Its average daily trading volume in options, which were non-existent between January-May 2023, has risen above Rs 26 lakh crore in September 2023. The Sensex contract is currently catering to 40% of the NSE’s derivatives volume but with the launch of the Bankex contract, BSE will address 95% of NSE’s derivative volume. The launch of Bankex (Monday expiry) will cater to a larger addressable volume and there is a possibility of further gain in market share. The company’s premium market share is 3.3%, which is also expected to rise further with the launch of new contracts and trading on non-expiry days.

In Q1FY24, the company reported a 10x YoY growth in the net profit to Rs 442.7 crore (beating Trendlyne Forecaster's estimate by 94%) while its revenue grew by 37.2% YoY. The company also features in screener for stocks with increasing profits every quarter for the past three quarters. BSE will tentatively announce its Q2FY24 results on November 10.

ICICI Securities downgraded from 'Buy' to 'Add’ on BSE due to higher current valuation but maintains a positive outlook on the back of stellar growth in Q2FY24 and improved pricing. The brokerage expects the company to witness traction in new products like Bankex and expects large brokerages to add BSE product offerings in H2FY24.

4. Tanla Platforms:

This internet & software services stock rose 4% on October 20 as its net profit grew by 5.3% QoQ to Rs 142.5 crore in Q2FY24. Due to this, the company appears in a screener of stocks with increasing profit for the past four quarters.

The company provides services like application-to-person messaging (A2P), WhatsApp, email and chatbots for broadcasting. In Q2FY24, Tanla Platform’s revenue increased by 10.7% QoQ to Rs 1,008.6 crore. This helped the company to beat Trendlyne’s Forecaster estimates for net profit and revenue by 17.9% and 3.3% respectively. However, its EBITDA margin declined by 40 bps QoQ due to increase in cost of services, employee benefits and finance costs.

Revenue rose on the back of improvement in revenue from the digital platforms and enterprise communications segments and also the acquisition of ValueFirst India. The enterprise communications segment (SMS and WhatsApp broadcasts), which contributes to 90% of total revenue, rose by 8.4% QoQ owing to an improvement in revenue from WhatsApp, UPI, OTP SMS broadcast and a hike in National Long Distance Connection (NLD) rates. 

Uday Kumar Reddy, Founder and CEO of the company commented, “We expect to complete the ValueFirst overseas acquisition in Q3 subject to regulatory approvals in local geographies which would add around Rs 60-70 crore to the revenue on a quarterly basis.”

Post results, HDFC Securities maintained its ‘Buy’ rating on the stock with a target price of Rs 1,440 per share. This implies a potential upside of 47%. The brokerage expects its volumes to improve, driven by growth in transactional SMS traffic, NLD price hikes and market share gains with ValueFirst acquisition. It expects the company’s revenue to grow at a CAGR of 16.1% over FY23-26.

5. Jubilant Foodworks

This restaurant major has fallen over 4.5% in the past two consecutive sessions, from Thursday. This comes after it reported a fall in its Q2FY24 net profit, down 26.1% YoY to Rs 97.2 crore. This was due to factors including higher finance costs and employee benefit expenses, as well as muted demand and heightened competition. However, its revenue rose by 4.9% YoY to Rs 1,368.6 crore, in line with Trendlyne’s Forecaster estimates, led by Domino’s delivery channel sales. As a result of the revenue rise, it features in a screener of companies with increasing revenue every quarter for the past two quarters.

During the quarter, Domino’s Pizza’s like-for-like or LFL sales growth (which is the YoY growth in sales for non-split restaurants opened before the previous financial year) contracted by 1.3% YoY, therefore, remaining in the negative territory for three consecutive quarters. However, the LFL ADS (average daily sales per store) for matured stores grew 1.4% QoQ. Domino’s Pizza's ‘Cheesy Rewards’ continue to gain traction, with its membership base reaching around 2 crore (up 16% QoQ). Initiatives like 20-minute delivery and discounts on combo offers by the company are expected to aid in improving its sales. 

Further, the company continued to expand its store network in Q2FY24, and opened 60 new outlets across various brands, taking the total to 1,949 stores in India. Sameer Khetarpal, the CEO and MD said, “We are on track to meet our guidance of opening 200- 225 Domino’s stores and 30-35 Popeyes stores for FY24”.

Post results, Prabhudas Lilladher maintains its ‘Hold’ rating on the restaurant major, with a target price of Rs 505. The brokerage expects an increase in demand led by the festival season and World Cup. It also has a positive outlook on the company considering its focus on long-term growth. 

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