Hunting for smallcaps with robust earnings? These 30 firms posted over 100% jump in Q4 profits

Earnings have a significant impact on stock prices, especially in the small-cap segment, where valuations have become stretched amid a recent market rally. In the BSE Smallcap index, at least 30 companies have reported more than 100% growth in their net profits for the quarter ended March 2024. 

According to market watchers, the market may see a stock-specific correction in the broader space where earnings visibility is uncertain. 

Therefore, it makes sense to zero in on companies that recently posted healthy growth in their bottom-line figures in the recently concluded quarter.

Data available with Ace Equity showed that Mahindra Lifespace Developers reported a manifold rise in net profit in Q4FY24. The consolidated bottom line of the company soared to Rs 71.50 crore for the quarter ended March 2024 against Rs 0.53 crore in the same quarter last year. 

Data showed that the company received Rs 78.80 crore as a share of the profit of joint ventures and associates which mainly supported the net profit of Mahindra Lifespace Developers during the quarter under review. On the other hand, gross sales declined sharply to Rs 14.29 crore in Q4FY24 against Rs 255.37 crore in Q4FY23.

Choice Equity Broking is positive on Mahindra Lifespace Developers (MLDL) with a target price of Rs 743.10. “The company is aiming to ramp up the launch pipeline in Tier-I cities (MMR, Bangalore and Pune) and expanding in to plotted development category (fast moving projects with comparatively better IRR). We maintain our positive view on the MLDL given the upcoming launches in the mid-income and premium housing segment, plotted development, new projects in the premium Mumbai market with society redevelopment, better velocity and higher IRR plotted development projects, healthy debt profile, expanding geography, strong brand visibility and strong parentage background.”

The submersible pump manufacturer Shakti Pumps (India) is next on the list. The company posted a 3,888% YoY rise in consolidated net profit at Rs 89.66 crore for the quarter ended March 2024. It is the only company to produce a diverse range of products in house including variable frequency drives, structures, motors and inverters for solar water pump installation. As of December 2023, Shakti Pumps commanded around 25% market share in the domestic solar pump market under the PM-KUSUM Scheme. 

Multi Commodity Exchange of India, Mahindra Logistics and Dolat Agrotech also posted a 1,512%, 1,467% and 1,048% rise in net profit in Q4FY24.

Data further highlighted that other companies like Kesoram Industries, PNB Gilts, Welspun Specialty Solutions, Transformers & Rectifiers (India), Motilal Oswal Financial Services, Wardwizard Innovations & Mobility, Rain Industries, Lloyds Engineering Works, Vakrangee and Symphony reported 200%-850% rise in net profit during the quarter under review.

Sharing its view on Welspun Specialty Solutions, Ventura Securities said, “The company is developing high-value grade stainless steel bars and pipes for power and infrastructure sectors, where the realisations and EBITDA per tonne are higher and it is expected to improve the profitability in the coming years. Net profit grew around 397% YoY due to a tax gain of Rs 34 crore in Q4FY24. The company is not paying tax as it has a tax credit of more than Rs 600 crore, which it will utilise in the coming years.”

Brokerage Geojit Financial Services has an ‘Accumulate’ rating on Symphony with a target price of Rs 1,151. Shares of the company traded at Rs 966 in the afternoon trade on May 10. Symphony and its subsidiaries manufacture and trade in residential, commercial and industrial air coolers in the domestic and international markets. The company operates through the air coolers and corporate funds segments and offers residential, packaged and central air coolers.

“Symphony’s profitability doubled, owing to above normal temperatures in Indian regions and decent summer overseas. The intensified heat wave in India and overseas, ongoing transition and improving performance of subsidiaries are key growth factors,” Geojit Financial Services said in a report.

Quess Corp, Bhansali Engineering Polymers, Netweb Technologies India, Jupiter Wagons, Network 18 Media & Investments, GM Breweries, Kennametal India, BEML Land Assets, Vardhman Special Steels, Ugro Capital, Birla Corporation, Automotive Stampings and Assemblies, The Anup Engineering, Navkar Corporation, Magellanic Cloud, KEC International and Hatsun Agro Product stood among other companies which posted more than 100% jump in their Q4FY24 net profits.

According to Systematix Institutional Equities, Jupiter Wagons delivered yet another robust set of results as revenue, EBITDA and PAT saw a strong growth of 57%, 60% and 167% YoY led by higher volume growth and better margin. The company manufactured the highest-ever 2,520 wagons during the quarter, a whopping 64.5% YoY and 31% QoQ growth which corresponds to a run-rate of 840 wagons per month. The brokerage has ‘Buy’ rating on Jupiter Wagons with a target price of Rs 535. The order book of Jupiter Wagons remained healthy at Rs 7,100 at the end of FY24 against Rs 7,080 crore at the end of Q3FY24.