Zomato, Titagarh Rail, JK Cement: Net profit of these 60 companies increased for the fourth straight quarter

The December quarter witnessed a remarkable phenomenon, the sustained prosperity of over 60 companies, which marked their fourth consecutive quarter of net profit. Notable entities from diverse sectors including finance, oil and gas, railways, IT, pharmaceuticals, cement, food delivery and textiles have emerged prominently in this distinguished list and market watchers are bullish on a couple of them.

Leading the pack is ICICI Bank, which secured the top spot with a net profit of Rs 11,052.60 crore in Q3FY24. The private sector lender reported a profit of Rs 10,896.13 crore in the preceding quarter ended September 2023 and Rs 8,792 crore in the corresponding quarter ended December 2022. Julius Baer Equity Research is bullish on ICICI Bank with a revised target price of Rs 1,240 (Rs 1,180 earlier). “The bank is strongly positioned to continue delivering on growth, asset quality, and key profitability metrics, backed by strong digital assets and superior execution,” Julius Baer Equity Research said.

Bajaj Finance, Union Bank, IndusInd Bank, Indian Bank, Bajaj Holdings & Investment, IDBI Bank, Bank of Maharashtra, L&T Finance Holdings, Manappuram Finance, IIFL Finance, Karur Vysya Bank, Five-Star Business Finance, Equitas Small Finance Bank and Aptus Value Housing Finance India also reported a rise in net profit for the fourth straight quarter.

According to Systematix Institutional Equities, Five-Star Business Finance 33QFY24 operational performance was healthy and ahead of consensus estimates. “We believe the premium valuation multiple compared with peers to sustain led by its unique position in the market, best in class RoA coupled with superior asset quality across cycles,” the brokerage said. Five-Star Business Finance posted nearly 44% YoY growth in net profit at Rs 216.76 crore for the quarter ended December 2023.

In the previous four quarters, LTIMindtree has displayed consistent growth, alongside L&T Technology Services and KPIT Technologies. LTIMindtree posted a profit of Rs 1,168.90 crore in Q3FY24, Rs 1,161.80 crore in Q2FY24, Rs 1,151.70 crore in Q1FY24 and Rs 1,113.70 crore in Q4FY23 and Rs 1,000.50 crore in Q3FY23.

Furthermore, companies like Lupin, IIFL Finance, JK Cement, Birlasoft, PCBL, Zomato, Spandana Sphoorty Financial, Fusion Micro Finance, Himadri Speciality Chemical, Elecon Engineering Company, Computer Age Management Services, Action Construction Equipment, CMS Info Systems and Ramkrishna Forgings have also posted impressive bottom-line growth for the fourth consecutive quarter.

Notably, Zomato's turnaround from a loss of Rs 347 crore in Q3FY23 to a profit of Rs 138 crore in Q3FY24 underscores the resilience within the food delivery industry. It posted a profit of Rs 36 crore in the sequential quarter ended September 2023 and Rs 2 crore in the June quarter. Companies with net profit over Rs 10 crore in the December quarter are considered for the article.

While retaining a ‘Buy’ rating on Zomato post Q3 results, brokerage JM Financial said, “Zomato reported a very strong quarter in Q3, as most headline numbers were either in line or ahead of estimates, amidst tough macros,” JM Financial said while setting a target price of Rs 200 for Zomato. Shares of Zomato traded 1.18% higher at Rs 145.70 in the morning trade on February 9.

Among other names in the list, HBL Power Systems, Home First Finance, ITD Cementation, Titagarh Railsystems, Anant Raj, Triveni Turbine, Balmer Lawrie & Company, MAS Financial Services, Happiest Minds Technologies, Steel Strips Wheels, Suryoday Small Finance Bank, Garware Hi-Tech Films, Responsive Industries, Arman Financial Services, Black Box, Aurionpro Solutions, Rossari Biotech, Pricol, Ugro Capital, Ajmera Realty & Infra India, Shilchar Technologies, Balu Forge Industries, Venus Pipes & Tubes, Talbros Automotive Components, SG Finserve, Kitex Garments, Windlas Biotech, AGI Infra and GPT Infraprojects also witnessed rise in their net profit for the fourth straight quarter.

Systematix Institutional Equities is also positive on Titagarh Railsystems with a target price of Rs 1,258 (Rs 1,202 earlier). “The company’s manufacturing capacity of 8,400 wagons per year, 30,000mt steel foundry, largest market share in total tenders from FY20-23 (around 25-30%), presence of factories in India and France (through Firema), partnerships or consortiums with MNCs, will help in its planned capacity enhancements to capture robust sector demand. The company has always demonstrated a superb margin and return ratio (18.5%/18.8% RoE/ROCE in FY26E) while EV/sales and EV/EBITDA at 1.8 and 16 respectively in the same year. We forecast a strong EBITDA and PAT CAGR of 42.3% and 52.8% during FY23-FY26E. We continue to value the stock at 30x and come out with an upward revision in target price,” Systematix Institutional Equities said in a report.

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