1. Infibeam Avenues:
This internet & software services company has risen by 32.3% in the past week following its Q3FY24 results on January 23. Its revenue and net profit beat Trendlyne’s Forecaster estimates by 7.1% and 19.8%, respectively. Net profit grew by 1.1% QoQ to Rs 41.4 crore during the quarter, while revenue surged by 15.4% QoQ to Rs 911.9 crore, owing to gains from the CCAvenue segment. This helped the company appear in a screener of stocks with rising revenue for the past four quarters.
The CCAvenue platform added two lakh new merchants in the Indian market during the quarter, boosting the company's India business revenue by 16.3% QoQ to Rs 860.2 crore. This accounted for 94% of total revenue. The company’s Chairman and Managing Director (MD), Vishal Mehta said, “Our digital payments business, through CCAvenue, led the way for revenue growth. Operating or EBITDA margins and profit margins remain strong as we take advantage of scaling up the international business.”
The company’s total processed value (TPV) jumped by 1.4% QoQ on the back of a 7.6% QoQ rise in the gross take rate (GTR). TPV is the total monetary value of all transactions processed by a payment platform over a period, while GTR is the company’s cut – its percentage share from these transactions.
Post-results, KR Choksey maintains its ‘Buy’ rating on Infibeam Avenues with an upgraded target price of Rs 41.7, indicating a potential upside of 8.3%. The brokerage believes that the company will be increasing its international footprint by launching CCAvenue and Tap Pay in the UAE and Saudi Arabia, before expanding into other GCC countries.
2. Jubilant Foodworks:
This restaurant chain and Domino’s master franchisee fell by 3.4% on Thursday after announcing a Q3 net profit decrease of 18.2% YoY to Rs 65.7 crore, missing estimates by 41.9%. The decline was due to an increase in finance costs, employee benefits, and depreciation expenses. Revenue rose by 3.1% YoY but overall fell short of Trendlyne’s Forecaster estimates by 2.3%. With the share price fall, the stock features in a screener of companies with weak momentum.
During the quarter, Domino’s Pizza’s like-for-like (LFL) sales growth contracted 2.9% YoY, remaining in the negative territory for the fourth consecutive quarter. This was due to a 5.6% YoY decline in dine-in sales. However, delivery sales grew by 6.2% YoY. The ‘Cheesy Rewards’ program continued to gain traction, with its membership base reaching around 2.1 crore.
The restaurant major expanded its store network in Q3FY24 by opening 58 new outlets across various brands, taking the total to 2,007 stores in India. Sameer Khetarpal, MD and CEO, said, “We will continue to add new stores as inflation moderates, and maintain our guidance of 200 new stores for FY24.”
QSR companies have seen a volatile quarter. Despite strong demand during the Cricket World Cup and Diwali, inflationary pressures, fewer people dining out, and competition from unorganised players led to a slowdown after the festive season. The industry expects these challenges to persist for a few more quarters, but remains hopeful about demand recovery.
Following the earnings announcement, Motilal Oswal downgraded its rating to ‘Neutral’ from ‘Buy’ and lowered the target price to Rs 480. The brokerage believes that the current valuation does not reflect the earnings pressure. It also expects sluggish demand in the near term to affect the company’s profitability.
3. DLF:
This realty company has risen by 4.3% in the past week, and trading near its 52-week high. The price rise came after the announcement of its Q3FY24 results. Its net profit has improved by 26.5% YoY to Rs 656.6 crore, while its revenue increased by 5.4% YoY to Rs 1,643.5 crore. DLF’s pre-sales rose by 261% YoY to a lifetime record of Rs 9,047 crore, led by its Privana South (luxury high-rise) project, which sold-out within 72 hours. The company appears in a screener for stocks with low debt.
With new sales bookings at Rs 13,316 crore for 9MFY24, the management says that it has exceeded its own full-year guidance of Rs 13,000 crore already. Despite this, It missed Trendlyne Forecaster’s net profit and revenue estimates by 2.4% and 7.6%, respectively, as analysts had anticipated higher numbers.
Revenue from its annuity portfolio, primarily driven by higher office occupancy, grew 8% YoY to Rs 1,476 crore. The company improved its net cash position to Rs 1,246 crore, backed by strong collections and focused cash management.
Looking ahead to FY25, DLF plans to launch 10 million square feet with a gross development value of Rs 32,000 crore. The management expects pre-sales to exceed Rs 15,000 crore. It has a launch pipeline of Rs 79,000 crore or 32 million square feet over the next four years.
Nuvama maintains its ‘Buy’ call on DLF, driven by strong sectoral tailwinds, an extensive launch pipeline, and the expansion of its annuity portfolio. The company appears in a screener for stocks where brokers have upgraded their recommendation or target price in the past month.
4. Coal India:
This coal producer has risen by 36.9% in the past quarter and 7.8% over the past week. The recent surge came after the Union Cabinet for Economic Affairs, headed by the Prime Minister, approved two thermal power plants with a combined capacity of 2,200 MW. In its December 2023 business update, Coal India reported an 8.2% YoY increase in production to 71.9 million tonnes (mt), the highest since March 2022.
The world’s largest coal miner sells around 90% of its output in the open market through Fuel Supply Agreements (FSA). In H1FY24, 9% of its coal was sold through e-auctions, where it commands a premium over the FSA notified prices. FSA prices are usually discounted to moderate domestic electricity costs. E-auction premiums, which dipped to 58% in July due to softer international coal prices, bounced back to 80%-100% as power demand surged. The firm has independence in fixing base prices for e-auctions, where premiums rise with higher demand, especially during power shortages.
Despite a shift towards clean energy, India needs to increase its thermal capacity as domestic coal demand is expected to reach 1.3-1.5 billion tonnes by 2030. This growing demand was evident in the December Index of Industrial Production (IIP) numbers, where the index grew by 3.6%, and coal demand alone rose by 10.6%. Coal India, a Maharatna PSU, accounts for 80% of the country’s coal output.
The firm’s stable dividend payout ratio of around 50% and its 6% dividend yield is one of the best in the industry. With a P/E ratio of 7.6, Coal India is trading at a discount compared to its Chinese peers. ICICI Direct states, “As the government plans to achieve 24-hour power supply by 2025, coal production at CIL will grow at a CAGR of 11% over FY23-26 to 950 MT by 2025.” The brokerage has a ‘Buy’ rating on this firm with a target price of Rs 500.
5. ACC:
This cement & cement products firm rose 10% on Thursday as its Q3FY24 net profit grew by 137.9% YoY to Rs 537.6 crore. The company appears in a screener of stocks with improving net profits and margins. According to Trendlyne’s Technicals, the stock outperformed the cement and construction sector by 3.7%, with a 11.4% increase in the past month.
Revenue rose by 8.3% YoY in Q3FY24, thanks to increased demand and higher realization. The firm’s realization rose by 4.9% YoY to Rs 5,185 during the same period. ACC’s EBITDA margin improved by 840 bps YoY, thanks to lower fuel/freight and fixed expenses. With the acquisition of a majority stake in Asian Cement and Concrete (ACCPL), ACC expanded its cement capacity to 38.6 mtpa, setting the stage for a 10% CAGR volume growth over FY24-26. This is a jump from the 2% CAGR over the last decade.
ACC’s management expects EBITDA margin expansion of Rs 200/tonne in FY25-26, helped by the implementation of a waste heat recovery system (Rs 90/tonne), logistic optimization (Rs 60/tonne), and raw material optimization (50/tonne). The management has guided FY24 capex at Rs 7,000 crore, including Rs 200 crore for capacity enhancement at the newly acquired Sanghi Industries. ACC’s sales volumes are poised to hit 36.2 mtpa in FY24, with an expected 5.3% CAGR growth to 41.7 mtpa by FY26.
Motilal Oswal highlights the start of production at the Ametha Plant (1 mtpa) and additional capacity from ACCPL (1.5 mtpa) boosts ACC's total capacity by 7% QoQ. With this expansion, the brokerage expects realization to rise by 10.2% by FY27. It maintains an ‘Accumulate’ rating on the stock.
Trendlyne's analysts identify stocks that are seeing interesting price movements, analyst calls, or new developments. These are not buy recommendations.
