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Shares of Andhra Cement declined 4.9 percent to Rs 105.35 a piece on the BSE in Tuesday’s intraday trade as the promoter group began offloading partial stakes via an offer for sale. 

At 11:20 AM, shares of the cement-producing company were off lows, down 1.3 percent at Rs 109.4 per share. The stock also hit an intraday high of Rs 118 per share. The benchmark S&P BSE Sensex was up 0.14 percent at 72,890.79 level.

According to the company’s exchange filing, Sagar Cements Ltd, the promoter entity, intended to sell the equity shares to comply with the requirements of minimum public shareholding.

Under the OFS, SCL would sell up to 5 percent of the total paid-up equity share capital of the company, aggregating to 4.6 million shares. The OFS would run between February 27 and 28. 

“The aggregate Promoter shareholding, as of February 26, 2024, is 95 percent of the company’s total paid-up equity share capital. Post completion of the sale above, the aggregate Promoter shareholding in the company would be reduced to 90 percent of the total paid-up equity share capital of the company,” it said.

Shares of Sagar Cement Ltd, meanwhile, rallied 3 percent intraday to Rs 250.8 per share.

In the December quarter, Andhra Cement posted a net loss of Rs 2 lakh, down from Rs 5.74 lakh in Q3FY23. Revenue from operations came at Rs 9.79 lakh. 

Sagar Cements, on the other hand, posted a net loss of Rs 10.18 crore vs Rs 23.68 crore in Q3FY23. 

The company’s net consolidated total income stood at Rs 673.14 crore, clocking an increase of 14.09 percent from Rs 590.02 crore last year. 

Analysts at Nirmal Bang Institutional Equities have maintained an ‘Accumulate’ rating on Sagar Cements as the management has reduced its volume guidance for FY24 from 6.2 mt earlier to 5.6 mt citing the upcoming Lok Sabha elections and state elections in Andhra Pradesh.

“Ebitda guidance for FY24 has been scaled down to Rs 3,122 million. FY25 volume guidance stands at 7 mt with Andhra Cement sales pegged at 0.9-1.0 mt. We value Sagar Cements at nine times December-25E enterprise value/EBITDA with a revised target price of Rs 299,” the brokerage said.

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Shares of Lumax Auto Technologies rallied 10 percent to hit an all-time high of Rs 496.70 on the BSE in Thursday’s intra-day trade aided by a strong business outlook.

The stock of the auto ancillary company surpassed its previous high of Rs 469 on August 6, 2023.

Lumax Auto is trading higher for the third straight day, zooming 28 percent, after it reported a healthy December quarter (Q3FY24) earnings.

Q3 revenues increased by 65 percent to Rs 732 crore and earnings before interest, tax, depreciation, and amortization (EBITDA) grew by 360 basis points to 15.8 percent over Q3FY23.

The company’s consolidated profit after tax jumped 56 percent YoY to Rs 36 crore.

The company said it continued to witness robust passenger vehicle sales and 2Ws witnessed improving demand during the strong festive season.

The positive momentum is anticipated to continue in the current quarter, driven by rising aspirational demand among consumers for vehicle ownership, it added.

Additionally, anticipating the demand, the company has expanded its operations under Lumax Cornaglia Auto Technologies by opening a new manufacturing facility at Chakan in Pune, which is a one-stop solution for complete vehicle-level emission requirements of original equipment manufacturers (OEMs).

Meanwhile, its recent acquisition, International Automotive Component (IAC) India, is performing exceptionally well, and the management is seeing an increasing share of customers’ wallets due to the realization of synergies.

Lumax Auto has been a manufacturer of a wide range of products (Integrated Plastic Modules, 2/3-wheeler Lighting, Chassis, Gear shifters, Shift Towers, Emission Systems, and Seat Frames, among others).

The Lumax group’s revenue is likely to cross Rs 3,500 crore over the medium term, driven by increasing contributions from IAC India and scaling up of subsidiaries and joint ventures (JVs), with the monetization of new orders, the contribution from existing products such as lighting, automatic gear shifter, and sheet metal, incremental revenue from new products such as oxygen sensors, and strong aftermarket demand, CRISIL Rating said

The business profile will be supported by healthy segmental diversity, a diversified product portfolio, and established customer relationships.

Healthy growth in the aftermarket business and change in product mix towards higher-margin LED lighting and integrated plastic components should help sustain the operating margin at 12 per cent-14 percent over the medium term, benefitting from the acquisition of IAC India, the rating agency said in a rationale.

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Shares of Zomato hit a two-year high of Rs 151.45 as they rallied 5 percent on the BSE in Friday’s intraday trade, after the food aggregator platform company reported its third consecutive quarter of consolidated net profit at Rs 138 crore in the December quarter (Q3FY24), up from Rs 36 crore a quarter ago. The company reported a loss of Rs 347 crore during the corresponding period last year.

In the past two months, the stock has surged 28 percent. With today’s rally, it is trading at its highest level since January 2022. It had hit a record high of Rs 169 on November 16, 2021. At 09:40 am, Zomato was trading 3 percent higher at Rs 148.55 compared to a 0.13 percent rise in the S&P BSE Sensex.

In Q3FY24, Zomato’s revenue from operations rose 69 percent year-on-year (Y-o-Y) to Rs 3,288 crore, up from Rs 1,948 crore a year ago. It had reported revenue of Rs 2,848 crore in the previous quarter.

Further, Zomato’s adjusted earnings before interest, tax, depreciation, and amortization (Ebitda), including its quick-commerce business Blinkit, were positive for the third quarter in a row at Rs 125 crore, compared to Rs 41 crore in Q2FY24.

Adjusted EBITDA margin of 5.3 percent, meanwhile, came in ahead of analysts’ estimates of around 4 percent, primarily driven by operating leverage. The food delivery contribution margin expanded 50bp quarter-on-quarter (Q-o-Q) to 7.1 percent, aided by the higher take rate. The Management continues to expect margins to expand further due to better cost absorption on account of strong growth.

“The growth was fueled by Blinkit, which rose 27 percent Q-o-Q, while food delivery revenue grew 10 percent Q-o-Q, driven by a higher take rate (20.1 percent, +70bp Q-o-Q). This was partially driven by better ad monetization on the platform,” Motilal Oswal Financial Services (MOFSL) said.

The food delivery business is still in a nascent stage in India, with a long runway for growth. With a dominant market share and strong growth in the food delivery business and Hyperpure, the brokerage firm expects Zomato to report a strong 38 percent adjusted revenue CAGR over FY24-26. After turning positive at the margin level in Q3, we now estimate Zomato to deliver 4.5 percent/10.0 percent Ebitda margin in FY25E/FY26E,” MOFSL said in the result update.

“Zomato continues to be one of our preferred picks in the listed Internet space as we believe it is well positioned to benefit from robust industry tailwinds for the hyper-local delivery businesses. Its balance sheet also remains strong with net cash of Rs 12,000 crore as of December 2023 (Rs 11,800 crore in September 2023),” said analysts at JM Financial Institutional Securities in their result update report.

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Shares of Trent hit a new high of Rs 3,849.75, surging 7 percent on the BSE in Thursday’s intra-day trade amid heavy volumes. In the past two trading days, Tata Group company has zoomed 27 percent after reporting a more-than-doubled net profit of Rs 343.60 crore in the December quarter (Q3FY24), on healthy operational performance. The company operates a portfolio of retail concepts, and posted a net profit of Rs 160.92 crore in the same quarter last year (Q3FY23).

Trent’s standalone revenue grew 52 percent year-on-year (YoY) at Rs 3,521 crore as against Rs 2,319 crore in the previous year’s quarter. Overall, operating earnings before interest and tax (EBIT) margin improved to 13 percent for Q3FY24 from 8.5 percent in Q3FY23.

Trent’s industry-leading revenue growth, driven by healthy SSSG and productivity, robust footprint additions, and healthy scale-up within the Zudio, offers a huge growth runway over the next three to five years. In Q3FY24, the company’s fashion concepts registered encouraging LFL growth of over 10 percent vis à-vis Q3FY23. During the quarter, Trent added 5 Westside and 50 Zudio stores across 36 cities including 13 new cities. This, along with raw materials (RM) cost tailwinds, led to a gross margin improvement. At 10:06 am; Trent stock was trading 6 percent higher at Rs 3,811.30, compared to a 0.18 percent rise in the S&P BSE Sensex. The average trading volumes on the counter jumped over fivefold. A combined 3.56 million equity shares representing 1 percent of the total equity of Trent have changed hands on the NSE and BSE.

According to Motilal Oswal Financial Services (MOFSL), Trent’s strong performance with 10 percent LFL growth and robust footprint additions remains an outlier within its retail coverage universe that is witnessing a challenging demand environment. Unlike peers that passed on the sharp RM price increases last fiscal, Trent absorbed the impact, seeing strong customer reception, and is now reaping the benefits as RM prices turn benign, the brokerage firm said in the result update. The company’s grocery segment, Star, with merely 67 stores and an annualized revenue of Rs 2,690 crore (FY24E) is seeing strong LFL growth. This presents a huge opportunity for growth. Its own brand strategy and curated range are witnessing strong customer reception, MOFSL said.

The brokerage firm in the result update said it assigned 45x EV/EBITDA to the standalone business (Westside and Zudio; premium over our Retail Universe, given its excellent growth), 2x EV/sales to Star Bazaar, and 15x EV/EBITDA to Zara on FY26E, and arrive at their target price of Rs 4,200.

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Shares of State Bank of India (SBI) hit a record high of Rs 670, gaining 3 percent on the BSE in Wednesday’s intraday trade, amid heavy volumes. In the past two trading days, the stock of the largest state-owned lender has rallied 4 percent on the back of a strong growth outlook over the medium term. The stock price of SBI surpassed its previous high of Rs 660.40 on December 20, 2023.

As many as 10.26 million equity shares of SBI changed hands cumulatively on the NSE and BSE in the first 32 minutes of trade.

Among PSU banks, SBI has a healthy provision coverage ratio (PCR), adequate capitalization, a strong liability franchise, and an improving asset quality outlook, making it the best play of the resilient Indian economy, according to analysts. They said that healthy business growth, along with stable margins and asset quality, is likely to boost profitability.

In the October-December quarter (Q3FY24), SBI reported a 35.5 percent year-on-year (Y-o-Y) decline in net profit at Rs 9,164 crore, due to Rs 7,100 crore provisions for pension liabilities. The bank had posted a net profit of Rs 14,205 crore in the same period of the previous year (Q3FY23).

Dinesh Khara, chairman, SBI said the one-time provisions (pension of Rs 5,400 crore, dearness allowance of Rs 1,700 crore) impacted the profitability in the third quarter. The bank expects to plow back Rs 40,000 crore in profits in FY24.

SBI’s Net Interest Income (NII) expanded by 4.59 percent to Rs 39,816 crore in Q3FY24, compared to Rs 38,069 crore in the same quarter a year ago.

Net interest margin (NIM) declined to 3.34 percent in Q3FY24, compared to 3.69 percent in Q3FY23. The management said SBI is guiding NIM to be around three basis points plus\minus around the current NIM (3.34 percent).

Asset quality continued to improve in Q3FY24.  The bank’s Gross Non-Performing Asset (GNPA) ratio was 2.42 percent at the end of December, improved by 72 basis points Y-o-Y. The net NPA ratio was at 0.64 percent, improved by 13 basis points Y-o-Y.

With stable asset quality, analysts at Axis Securities believe, credit costs would remain under control, thereby aiding the bank to deliver a sustainable return on asset (ROA). Thus, despite elevated opex and provision on wage revision, the brokerage firm believes, that improvement in asset quality would support the bank’s profitability in FY24.

The management anticipates lower wage provisions at Rs 5,400 crore in Q4. Consequently, we expect improved operating profitability in FY25, Motilal Oswal Financial Services (MOFSL) said.

The brokerage firm has maintained a ‘buy’ rating on SBI with a target price of Rs 800 per share. The bank has various levers such as the credito-to-deposit (CD) ratio and MCLR repricing to keep margins stable. Business growth remains robust, with signs of a recovery in the corporate segment, MOFSL said in the result update.

Asset quality remains healthy as the GNPA ratio improves further and the restructured book is well-managed at 0.5 percent of advances, while the SMA pool stands at 12bp of loans. The brokerage firm estimates SBI to deliver RoA/RoE of 1.1 percent/19.6 percent in FY25. 

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