Up to 100% rally in just 1 year! These 38 mid-caps reported record sales, net profit in FY23

Select mid-cap companies have been buzzing on Dalal Street thanks to their record performance in the financial year 2022-23 in terms of top line and bottom line. Data shows that as many as 38 companies in this space from across the sectors including cements, chemicals, auto and auto ancillaries, banks and FMCG have managed to report their highest-ever consolidated gross sales and net profit in FY23. Market analysts are bullish on a couple of firms in the list despite up to 97 per cent rally in the last one year.

With a growth of 462.43 per cent, The Phoenix Mills posted a record consolidated profit of Rs 1,334.96 crore in FY23. The figure stood at Rs 237.36 crore a year ago. On the other hand, gross sales of the firms grew 77.85 per cent YoY to Rs 2,638.35 crore. The company witnessed a one-time gain of Rs 605.20 crore during the year. Shares of the company have gained nearly 35 per cent in the past year.

Torrent Power is next on this the list. The company reported 366.41 per cent year-on-year growth in consolidated net profit at Rs 2,117.43 crore. On the other hand, Torrent Power posted 80.21 per cent YoY growth in gross sales at Rs 25,694.12 crore. ZF Commercial Vehicle Control Systems India and Shriram Finance also reported over 100 per cent growth in net profit in FY23.

Shares of midcap companies have outpaced the benchmark equity indices in the past year. The BSE Midcap index has gained 29 per cent to 28,268.44 on June 26, 2023 from 21,991.81 on June 27 last year. On the other hand, the BSE Sensex advanced 18 per cent during the same period.

Market watchers believe that the ongoing outperformance in the broader markets will continue. Sandeep Raina, Head of Research, Nuvama Professional Clients Group said, “The entire markets look good and we are positive on the entire market irrespective of the market cap. Although, during bull market the midcaps and small-caps does better given higher percentage improvement in their respective numbers. The positive trend will continue and we say this as we believe that demand will continue to be strong, corporate profits will improve and balance sheet would improve for the industry in addition to the government capex which is expected to increase which allows the industry to deliver well.”

Data further highlighted that Canara Bank (up 87 per cent YoY), UNO Minda (up 84 per cent), Mahindra & Mahindra Financial Services (up 82 per cent), Oberoi Realty (up 82 per cent), TVS Motor Company (up 76 per cent), Solar Industries (up 72 per cent), AIA Engineering (up 70 per cent), Union Bank of India (up 62 per cent), The Federal Bank (up 61 per cent), 3M India (up 56 per cent), Oil India (up 55 per cent), Schaeffler India (up 40 per cent) and Indian Bank (up 35 per cent) also posted their record net profit during the year under review. These companies also witnessed record gross sales during 2022-23.

Axis Securities gave ‘Buy’ rating to Uno Minda last month with a target price of Rs 600. “Strong order book will help Uno Minda to outperform the industry growth,” the brokerage said in a report.

Sharing its view on the banking sector, global brokerage Nomura in a report said, “Indian banks are in a sweet spot. They are well capitalised, the credit cycle is benign and profitability is at its highest level in a decade. We believe they are at the cusp of a multi-year credit cycle, notwithstanding any near-term demand disruptions arising from an uncertain macro.”

Shares of Union Bank of India have gained 97 per cent to Rs 68.68 on June 26, 2023 against Rs 34.90 on June 27 last year. It was followed by Power Finance Corporation (up 92 per cent), Cummins (up 85 per cent) and Indian Bank (up 84 per cent).

Persistent Systems, SKF India, Vinati Organics, Coromandel International, Cummins India, LIC Housing Finance, Grindwell Norton, CRISIL, Timken India, Abbott India, Mphasis, Power Finance Corporation, REC, NHPC, Indraprastha Gas, Bank of India, Sundram Fasteners, Fortis Healthcare, Coforge, APL Apollo Tubes and The Indian Hotels Company also record highest-ever net profit and gross sales in FY23.

Elara Capital is bullish on Fortis Healthcare with a target price of Rs 372. “We believe that divestment of laggards, ramp-up in the newly-added facilities and double-digit growth in SRL Diagnostics will continue to add momentum to the earnings and stock price,” Elara Capital said. 

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