1. IndiaMART InterMESH:
This software and services company saw an increase of 8.2% in its share price on Thursday following the release of its Q4 and FY24 results. In Q4, the company’s net profit surged by 78.5% YoY to Rs 99.6 crore, beating Trendlyne’s Forecaster estimates by 26%. During the same period, its revenue rose by 30.9% YoY to Rs 391.9 crore, beating Forecaster’s estimates by 23.4%.
Collections in FY24 grew 16% YoY to Rs 480 crore. Within this growth, a 10% increase was attributed to rising average revenue per user (ARPU), while the remaining 6% came from new user additions. The ARPU itself rose by 10.6% YoY to Rs 55,900, as subscribers migrated to higher-priced packages and churn in the gold and platinum tiers decreased. Top-tier subscribers account for above 50% of paid suppliers and approximately 75% of revenue.
The company's EBITDA margin expanded to 28.1%, compared to 24.6% the previous year, primarily due to reduced sales and marketing costs. Productivity gains from eliminating tier-4 towns and underperforming areas further boosted margins.
CEO Dinesh Agarwal expressed optimism about IndiaMART's growth potential, noting that the company has only penetrated 40% of his estimated 100 million B2B buyers in India. After a decline in unique business inquiries to 88 million in FY23, inquiries have regained momentum, reaching pre-FY23 levels of 93 million in FY24. Agarwal said, “The company could comfortably exceed 100 million unique business inquiries in FY25.”
Anand Rathi reiterated its ‘Buy’ call on IndiaMART. Analysts at Anand Rathi are positive about the company’s prospects due to its networking effect, negative working capital requirements, asset-light model, and healthy cash balance of Rs 2,340 crore. With a target price of Rs 3,250, IndiaMART InterMESH has a potential upside of 16.1%.
2. Vedant Fashions:
This retailing company has fallen around 1.9% in the past two days after announcing its results. In Q4FY24, Vedant Fashions’ revenue grew by 7.8% YoY, but missed estimates by 2.3%. Its net profit grew by 6.3% YoY to Rs 115.6 crore. However, its EBITDA margins declined by 90 bps YoY to 48.2% during the quarter due to higher raw material costs, finance costs, and depreciation expenses.
Vedant’s same-store sales growth (SSSG) slipped 3% YoY during the quarter. The company witnessed pressures in Tier 2 and Tier 3 cities due to lower consumer demand. Organized players such as Raymond and Tasva are expanding into Tier 1/2 cities. In addition, new players are also entering the industry. However, Motilal Oswal believes that the company will not lose market share.
According to Trendlyne’s Technicals, Vedant Fashion’s share price has declined by 28.3%, over the past six months, underperforming the retailing sector by 11.2%. The management highlighted that FY24 performance was impacted due to significantly fewer weddings, muted consumer demand, and the high base last year. Vedant Modi, the Chief Revenue Officer (CRO), during the company’s earnings call said, “Q1FY25 is going to be weak given that there are close to no weddings happening during the quarter. However, Q2 onwards, we are very confident about the business, and that is when things should pick up”.
Vedant Fashion continued its retail expansion by adding three stores during the March quarter and 27 in FY24, compared to 54 stores in FY23. It is now focused on consolidating its smaller stores and moving into larger store formats. Vedant Fashions is also now focusing on the South Indian market.
Post the company’s performance, ICICI Securities maintains its ‘Add’ rating with a target price of Rs 1,000. The brokerage highlights a slower-than-expected pick-up in consumer demand and rise in competition from branded retailers as key downside risks for the company.
3. ACC:
This cement and cement products manufacturer rose around 5% ahead of its results. It then fell by 2% in the past week post its Q4 numbers release. The company’s share price has increased by 43.3% in the past year, outperforming its industry by 4.8%. In Q4FY24, its profit rose 300% YoY to Rs 944.8 crore, while revenue improved 12.6% YoY to 5,528.5 crore. It beat Trendlyne Forecaster’s net profit estimates by 53.8%. This growth in profitability can be attributed to increased demand, volume expansion, cost reduction, and efficiency improvement efforts.
Despite an 8% YoY fall in realization due to low cement prices, ACC’s EBITDA margin improved by 5.7 percentage points YoY to 15.5%. Its EBITDA per tonne in FY24 has almost doubled to Rs 830, led by an effort to reduce cost. Raw material and freight costs declined by double digits YoY. CEO Ajay Kapur said, “Securing raw materials at cost-competitive prices, and focused capex will help in cost optimization by 8-10%.”
ACC reported volume growth of 22% YoY to 10.9 mtpa in FY24 (above expectations), thanks to capacity expansions. The company provides long-term visibility on volume growth with its aggressive capacity additions plan. Kapur said, “We are growing stronger over time with our efficiency improvement initiatives. Our current market share is 14% and we target to grow to 20% in FY28.”
The management is positive about the cement industry on the back of the government’s infra push, higher budgetary allocation, green energy transition, demand-supply dynamics, and greater consolidation. They expect higher capacity utilization on demand growth of 8-9%.
To double its capacity to 140 million tonnes by FY28, the company plans to open 35 new grinding facilities. Post the acquisition in Thoothukudi, Tamil Nadu, it plans new grinding units across Chhattisgarh, Bengal, Maharashtra, Uttar Pradesh, Rajasthan, and Gujarat.
Axis Direct is optimistic about ACC’s volume growth. It expects the firm’s recent launch of a new greenfield integrated unit in Ametha and the complete acquisition of ACCPL to help meet higher cement demand. However, the brokerage is cautious about lower cement prices. The company appears in a screener for stocks with broker price or recommendation upgrades in the past month.
4. MphasiS:
This IT consulting & software company rose by 2.8% over the past week after it announced its results on 25th April. The firm beat the Trendlyne Forecaster estimates for Q4FY24 for revenue by 1.5%, however missed the net profit estimate by 1.5%. For Q4FY24 the company’s net profit fell by 2.9% YoY to Rs 393.2 crore on the back of rise in finance and depreciation costs, while its revenue rose by 2.1% YoY. The stock shows up in a screener for companies with weak momentum.
The firm’s Total Contract Value (TCV) has declined by 42.7% YoY in Q4FY24 at $177 million. However, the deal landscape has improved overall, especially in the capital market space. Mphasis stands out with the highest revenue concentration from its top ten clients among its peers. This may be now hurting the business, since challenges in the broader economic environment and the trend of insourcing within these top accounts have hindered growth. The revenue from its top client decreased by 4.7% QoQ, while revenues from clients ranked 2nd to 5th declined by 1.2% QoQ. However, large deal wins outside its top 10 clients grew by 73% YoY over FY24.
Citing economic uncertainty, the management has maintained their last year’s margin guidance of 15.25-16.25%. Nitin Rakesh, CEO and MD of Mphasis said “ Our Total Contract Value for the last four quarters has been around $ 1.38 billion. This quarter, we've seen some pickup in activity, but it's still not fully ramped up. So I think we'll focus on closing the current order book.”
ICICI Securities has maintained a "sell" rating on MphasiS with a price target of Rs 1.950. The brokerage said: “ Although deal conversion is improving and FY25 outlook is positive, these are already built into our estimates. The company’s margin guidance for FY25 was also subpar at 14.6-16%. Factoring in new guidance, we adjust our FY25E/26E EPS by -4.1%/1.9%, factoring in the guided margin. We continue to value the stock on 18x FY26E EPS of Rs 106.”
5. Indian Oil Corp:
This oil marketing & distribution company’s stock price remained flat at 0.03% over the past week after its decline on Tuesday due to its poor Q4FY24 results was later offset by a price recovery, due to the government’s tax reduction on petroleum crude exports.
The stock had fallen 4.5% on Tuesday after net profit plunged by 50% YoY to Rs 5,148.9 crore in the quarter, due to a net loss in the petrochemicals segment, as well as higher employee benefits and finance costs. Revenue dropped by 3.1% YoY to Rs 2.2 lakh crore. The share price recovery of 2.7% on Thursday was due to a windfall tax reduction announced by the Indian government on petroleum crude, which was brought down to Rs 8,400 per metric tonne from Rs 9,6000 per metric tonne.
The company appears in a screener of stocks underperforming their industry price change in the quarter. Its net profit missed Trendlyne’s Forecaster estimates by 21.6%, while revenue beat Forecaster estimates by 9.4%. Its EBITDA margin contracted by 225 bps YoY to 5.3% due to its gross refining margin (GRM) falling by 44% YoY to $8.4 per barrel. This comes after crude oil prices surged by 16% during Q4FY24.
Stating its plans for the upcoming financial year, the management says, “We plan to set up a subsidiary to undertake a low carbon, green energy business, with an equity investment of Rs 1,304 crore. We also plan to establish 1 gigawatt (GW) of renewable energy capacity across the country with an investment of 5,215 crore.”
Post results, Nirmal Bang maintains its ‘Sell’ rating on the stock with a target price of Rs 109 per share. This indicates a potential downside of 37.1%. The brokerage expects the company’s refining business to face headwinds due to subdued global macros, as well as growth in EVs and renewable power capacity. It expects the company’s revenue to decline at a CAGR of 5.8% over FY24-26. However, Motilal Oswal thinks otherwise with its ‘Buy’ rating on the stock, as it believes that the refining segment’s performance will remain healthy given the robust oil demand.
Trendlyne's analysts identify stocks that are seeing interesting price movements, analyst calls, or new developments. These are not buy recommendations.
