Among sectors, capital goods, auto, realty, power and PSU bank rose 1-3 percent but selling was seen in IT and FMCG names.
The benchmark indices ended higher after six straight days of fall in a volatile session on May 16. At close, the Sensex was up 180.22 points, or 0.34%, at 52,973.84, and the Nifty was up 60.10 points, or 0.38%, at 15,842.30.
State Bank of India | CMP: Rs 456 | The stock added over 2 percent after the state-owned bank reported a 41 percent year-on-year rise in net profit at Rs 9,113.5 crore, which was still below Street’s estimate of Rs 9,927.6 crore. The net profit was its highest ever. Nomura has maintained a “buy” rating on the stock with a target of Rs 615. Credit Suisse has an “outperform” rating, with a target of Rs 600 a share as execution is on track, while Morgan Stanley has kept an “overweight” rating and cut the target price to Rs 580 from Rs 615.
Eicher Motors | CMP: Rs 2,626 | The share price surged 8 percent after Eicher Motors on May 13 declared a consolidated profit after tax (PAT) of Rs 610 crore for the quarter ended March 2022, up 16 percent from Rs 526 crore a year ago. On a sequential basis, the growth in profit was 34 percent from Rs 456 crore in the previous quarter. The maker of the iconic Royal Enfield reported a year-on-year (YoY) growth of 8.6 percent in its consolidated revenue at Rs 3,193 crore from Rs 2,940 crore in the corresponding period of the previous year. Consolidated revenues rose by 18 percent to Rs 10,298 crore from Rs 8,720 in the previous year. Global research firm UBS has a buy rating on Eicher Motors with the target at Rs 3,100 a share, an upside of 21 percent from the current level. The research firm is of the view that Q4 earnings were an all-round beat with volume ramp-up ahead. It expects a sharp rebound in Royal Enfield volumes with 38 percent/12 percent growth over FY23/FY24 and sees upside risks to margin estimates of 22.9 percent/24.4 percent for FY23/FY24.
Tech Mahindra | CMP: Rs 1,190 | The scrip ended in the red on May 16. Tech Mahindra reported a 10 percent sequential rise in its consolidated net profit to Rs 1,506 crore for the quarter ended March 2022, which was above analysts’ expectations of Rs 1,411 crore. The board has recommended a final dividend of Rs 15 a share for the financial year ended March 31, 2022. Brokerage house Citi has maintained “buy” rating on the stock but cut the target to Rs 1,400 from Rs 1,715 a share. It lowered FY23/24 EPS estimates by 5%/2% and cut target multiple to 20x from 24x given the macro overhang. Research firm UBS has a “sell” rating on the stock, with the target at Rs 1,260 a share as the Q4 revenue was in line but the margin missed estimates.
Adani Group stocks: The shares of Adani Group companies were in focus on May 16, a day after the group’s acquisition of HolcimLafarge’s India cement business for more than $ 10.6 billion. Adani Group will acquire HolcimLafarge’s 63.2 percent stake in Ambuja Cements and 54.53 percent stake—of which Ambuja Cements holds 50.05 percent—in ACC. The deal is the largest for the coal-to-media conglomerate and marks its foray into the cement sector as the second-largest player behind Aditya Birla Group-owned UltraTech Cement. Shares of Adani Enterprises (Rs 2,112.50), Adani Ports (Rs 716.90), Adani Power (Rs 267.35), Adani Transmission (Rs 2,251.30), Adani Green Energy (Rs 2,301.30), and Adani Total Gas (Rs 2,393.25) closed 1-6 percent higher on the National Stock Exchange.
Amber Enterprises | CMP: Rs 2,703.60 | The share tumbled 20 percent, its biggest fall since listing, after its margins and the bottomline were hit by higher raw material and operating costs. Amber Enterprises’ revenue increased 21 percent year-on-year to Rs 1,937 crore on the back of strong volumes and higher price realisations. Net profit fell 22 percent YoY to Rs 59 crore and operating costs surged 25 percent YoY to Rs 1,804 crore. Gross margin declined 210 basis points on-year to 13.8 percent as the company was not able to completely pass on the rising raw material prices. EBIT margin contracted 250bps YoY to 4.9 percent as higher operating leverage was negated by lower gross margins as well as increased depreciation, staff cost and other expenses.
Avenue Supermarts | CMP: Rs 3,565 | The stock price spiked 10 percent on May 16. The company posted a 3 percent rise in net profit year-on-year on May 14. However, sequentially, the consolidated net profit declined 22 percent to Rs 427 crore for the fourth quarter ended March 2022. Revenue fell 5 percent quarter-on-quarter to Rs 8,787 crore from Rs 9,218 crore. Year on year, revenue rose 19 percent.
Tata Power | CMP: Rs 227.40 | The share price rose 2 percent after Tata Power Solar, a wholly- owned subsidiary of Tata Power, bagged an order of 300MW solar project worth Rs 1,731 crore from NHPC. The project, located in Rajasthan, will be developed under the CPSU scheme of IREDA. The project that will be completed in 18 months aims to reduce carbon emissions and is expected to generate approximately 750 million units annually. Cells and modules made in India would be used in the project, the company said in its release.
Bank of Baroda | CMP: Rs 100.25 | The stock added 5 percent as investors were impressed by the continuous improvement in the lender’s asset quality in the quarter ended March. The bank reported gross non-performing assets (GNPA) ratio of 6.6 percent for the quarter as against 7.3 percent in the previous quarter despite new slippages rising to Rs 4,500 crore. The rise in slippages at over 5 percent on year to Rs 3,736 crore weighed on net profit, which was below analysts’ expectations.
Bharat Forge | CMP: Rs 663.40 | The scrip was up over 5 percent after the company posted a 27.5 percent jump in its Q4 net profit at Rs 261.9 crore versus Rs 205.5 crore and revenue was up 28.1% at Rs 1,674 crore versus Rs 1,307.3 crore, YoY. Earnings before interest, tax, depreciation and amortization (EBITDA) were up 20.1% at Rs 431.2 crore versus Rs 359.1 crore and the margin was at 25.7% versus 27.5%, YoY.
Century Plyboards | CMP: Rs 546 | The share surged over 8 percent after the firm posted a 2.1 percent jump in Q4 consolidated net profit at Rs 88.5 crore versus Rs 86.7 crore and revenue was up 20.9% at Rs 901 crore versus Rs 745 crore. Earnings before interest, tax, depreciation and amortization (EBITDA) was up 27.7% at Rs 160.7 crore versus Rs 125.8 crore and margin was at 17.8% versus 16.9%, YoY.
Sandip Das
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