1. Hindustan Aeronautics:
This defence company touched a new 52-week high of Rs 5,582.8 on Wednesday after it announced that the Ministry of Defence has issued a request for proposal to procure 156 Light Combat Helicopters. The tender, valued at around Rs 50,000 crore, marks the largest single order for choppers to an Indian company.
Defence stocks have rallied in the past few days after Defence Minister Rajnath Singh announced a target to generate Rs 50,000 crore worth of military exports annually, and promised to speed up 'Make in India' initiatives for defence production.
In Q4FY24, Hindustan Aeronautics (HAL) net profit increased by 52.2% YoY to Rs 4,308.7 crore due to lower tax outgo last year, while revenue rose by 16% YoY to Rs 15,326.1 crore. The EBITDA margin expanded by 439 bps YoY to 30.4%, driven by cost optimization. In FY24, revenue grew by 12.9% YoY to Rs 32,277 crore, beating Trendlyne’s Forecaster estimates by 1.9%. The company appears in a screener for stocks with annual profits improving from the last two years.
C.B. Ananthakrishnan, Chairman, and MD of the company said, "We expect order inflows worth Rs 47,000 crore in FY25, including engines for Sukhoi aircraft and helicopters, with our order book expected to grow to Rs 1.2 lakh crore from Rs 94,000 crore in FY24." HAL is expanding its manufacturing capacity in Tumkur and Nashik to ramp up helicopter and Tejas aircraft production, to meet domestic and international demand for advanced aviation solutions. The company expects additional order inflows of Rs 20,000 crore annually in the repair and overhaul segment over the next few years.
ICICI Direct maintains a 'Buy' rating, with a target price of Rs 5,700. The brokerage anticipates HAL to benefit from its strong order backlog and promising growth trajectory. It expects revenue and PAT to grow at 14% and 13% CAGR respectively over FY25-26. The stock’s PE is currently trading at 45.4, relatively lower compared to its defence peers.
2. Coromandel International:
This agri-solutions provider surged to a new 52-week high of Rs 1,688.5 on Thursday following reports of an anticipated tax exemption in the upcoming GST Council meeting on Saturday. Currently, a GST of 5% is levied on fertilisers, and the sector has been demanding an exemption from this tax.
According to Trendlyne’s industry dashboard, the fertilisers industry has topped the charts after rising over 24.1% in the past week. Multiple catalysts have boosted investor confidence, including the expectation of high fertiliser demand driven by a regular monsoon forecasted this year.
Coromandel has also invested in multiple agri-tech startups such as Dhaksha and Ecozen. Drone company Dhaksha operates in drone-based spraying of pesticides, defence and surveillance applications. Coromandel has also increased its stake in Ecozen, which works on sustainable agriculture solutions such as solar-powered irrigation.
President and CFO Jayashree Satagopan says, “The nano-fertilizer segment can see exponential growth in the coming years”. Coromandel recently announced the inauguration of its nano fertiliser plant at the Kakinada complex in Andhra. This plant has the capacity to produce one crore bottles of nano fertilisers per year, thanks to an automated production line, including a robotic arm for bottling operations.
Geojit Financial Services maintains a ‘Hold’ rating on Coromandel as reduced volume and lower subsidy affected revenue in Q4, which declined 27.6% YoY to Rs 3,996.3 crore. However, the brokerage is positive about the company’s growth prospects, thanks to an improvement in capacity utilisation and the launch of new products. They also expect the stabilisation of raw material prices and operational improvements to boost profitability going forward.
3. EID Parry (India):
This food products company surged 11.1% on Wednesday following reports that the Centre might hike minimum support price (MSP) of sugar for the 2024-25 season This decision comes after the National Federation of Cooperative Sugar Factories (NFCSF) filed a request to increase MSP to Rs 42 per kg from Rs 31 per kg. The share price rise was also helped by the government's plan to increase ethanol blending to 20% by 2025.
In the past month, the company's share price has risen by 23.3%, outpacing the industry’s 14% growth. However, in Q4FY24, the company reported a 17.3% YoY decline in revenue to Rs 5,680 crore, due to higher sugarcane costs and the ban on sugar exports. Despite this, its net profit increased by 23.1% YoY to Rs 220.3 crore.
EID Parry aims to increase revenue from non-sugar segments such as branded sugar, distillery operations, and FMCG products (like millets, pulses, and rice) to reduce reliance on the cyclical sugar industry. According to Chairman Venkatachalam, ”The EID Parry of the future is to be positioned as a bioenergy, food and nutrition company.” To support this shift, the company has significantly expanded its distribution network from 39,000 outlets in FY22 to 110,000 outlets in FY24. Additionally, EID Parry's 56% stake in Coromandel International, a leading fertilizer company diversifying into CDMO and specialty chemicals sectors, should help its growth trajectory.
In Q4FY24 mutual fund holdings grew to 11% from 4.1% in Q3 FY24. This increase was driven by significant purchases, including SBI Magnum Children's Benefit Fund acquiring 5.19%, Parag Parikh Flexi Cap Fund buying 1.34%, and Quant Small Cap Fund raising its stake from 1% to 1.50% during the same period.
4. Brigade Enterprises:
This realty company has risen by 3.1% in the past two days after announcing a Rs 150 crore project to develop a third tower of the World Trade Centre (WTC) at Infopark Kochi. The project has a built-up space of 2.6 lakh square feet, and is expected to complete in three years. The company looks to expand in Tier-2 cities including Kochi and Trivandrum, and this project will increase its footprint in Kerala. It features in a screener of stocks near their 52-week high with significant volumes.
Meanwhile, on June 12, Brigade Enterprises announced its plan to invest Rs 8,000 crore in Chennai by 2030 with a pipeline of projects across all major verticals, covering over 15 million square feet (msf). The gross development value (GDV) of the residential projects is estimated to be over Rs 13,000 crore. This strengthens the company’s plan to make Chennai its second-largest market after Bengaluru.
According to Pavitra Shankar, the Managing Director, “We aim to double our growth in the city by expanding all four verticals of residential, commercial, retail, and hospitality”. As part of the plan, it announced the launch of Brigade Icon Residences, a resort in Chennai’s ECR Beach, and a luxury hotel.
In FY25, Brigade plans to launch over 3 msf of residential projects and about 1 msf of commercial developments in Chennai. Due to the ongoing metro expansion and various infrastructure developments, real estate companies are looking at Chennai as the next big real estate market. As per data from real estate consultancy Anarock, average prices of residential properties have increased across major cities in India. From March 2016-24, average prices in Chennai have risen to Rs 6,200 per sq ft from around Rs 4,800.
Over the past quarter, Brigade Enterprises has risen by 55.3%, outperforming the industry by 19.1 percentage points. In Q4FY24, the company’s net profit jumped 197.6% YoY to Rs 206.1 crore. Its revenue rose 102% YoY driven by growth across its real estate, leasing, and hospitality segments. The company has a strong pipeline of 22 msf of ongoing projects and around 16 msf of upcoming projects, which should provide revenue visibility for the next few years.
Nuvama has a ‘Buy’ rating on the company with a target price of Rs 1,496. The brokerage believes a robust launch pipeline and improving occupancy in hospitality and leasing segments will ensure sustainable growth.
5. Craftsman Automation:
This automobile parts manufacturer rose by 9.7% in the past week. The price rose after the company’s board approved raising funds worth up to Rs 1,200 crore via a Qualified Institutional Placement (QIP), by issuing equity shares with a floor price of Rs 4,426.11 per share. The firm plans to use these proceeds to repay certain outstanding borrowings and for expansion. The company says that it is leveraged due to expansion and acquisitions in FY24, and plans to reduce its debt.
Craftsman Automation intends to target growth opportunities from OEMs in North India. Speaking about expansions, Chairman and Managing Director Srinivasan Ravi said, “We'll be looking at a capex above Rs 500 crore in FY25, and completing stage one of both the Bhiwadi plant (aluminum casting business) and the Kothavadi plant in Coimbatore (industrial business and powertrain business).”
Looking at annual numbers, Craftsman’s revenue and profits have doubled between FY 22 and FY24. However Q4FY24 was weaker than expected, and the company’s net profit fell 19.7% YoY to Rs 62.3 crore despite a 12.7% YoY rise in revenue to Rs 1,110.7 crore. It missed Trendlyne Forecaster’s net profit estimate by 42%. The profit fell due to increased raw material costs, as well as depreciation and amortization expenses.
The results were also affected by weak performance in the powertrain segment, as its revenue grew by only 1% YoY. The segment was impacted due to refurbishment costs and capex investments but exports are now expected to increase from key customers like Daimler, and the management projects that the powertrain segment will grow by 8-12% YoY in FY25.
Motilal Oswal reiterates the ‘Buy’ call on Craftsman Automation and expects a CAGR of 15% in revenue and 27% in profit over FY25-26. Despite a near-term slowdown likely in key segments like commercial vehicles and tractors, the brokerage foresees traction from off-highway and stationary engine segments, as Craftsman has received orders that are expected to commence production in FY25. Motilal expects the revenue from this segment to scale up to $100 million over the next 4-5 years. The company appears in a screener for stocks with increasing shareholding by foreign investors and/or institutions.
Trendlyne's analysts identify stocks that are seeing interesting price movements, analyst calls, or new developments. These are not buy recommendations.
