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Stock Analysis, IPO, Mutual Funds, Bonds & More

540 firms grow profit for 10 straight quarters; 10 rise up to 1,000% in 2 years

Ebitda for Nifty firms grew 10.4% YoY in Q4FY17, driven primarily by commodity companies.

, ETMarkets.com|
Updated: Jun 28, 2017, 03.21 PM IST
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Stocks of 540 companies have delivered positive returns and risen up to 950 per cent in the last 10 quarters.
Stocks of 540 companies have delivered positive returns and risen up to 950 per cent in the last 10 quarters.
While India Inc has broadly struggled to revive earnings over the past few years, nearly 650 companies listed on the National Stock Exchange (NSE) have gone against the wind and reported profit for the 10 straight quarters till March quarter of FY17.

Among them, stocks of 540 companies have delivered positive returns to investors and risen up to 950 per cent during this period.

With 950 per cent stock return since June 2015, Jayant Agro-Organics tops the list. The stock has surged from Rs 95 on June 22, 2015 to Rs 995.30 as of June 22, 2017. Net profit of the company surged from Rs 0.67 crore for the quarter ended December 2014 to Rs 15.59 crore for the quarter ended March 31, 2017.

Jayant Agro-Organics is an oleochemicals company, focused on the castor-based specialty chemicals business.

This March rating agency Crisil upgraded Jayant Agro-Organics from Crisil BBB+ to Crisil A-, reflecting better-than-expected improvement in its debt-to-Ebitda and interest coverage metrics, which it is expected to sustain over the medium term.

Star Paper Mills is the second-best player on the list and the stock has delivered 873 per cent return during this period, surging from Rs 21 to Rs 210 between June 2015 and June 2017. The company is engaged in paper manufacturing.

It also clocked bottom line growth in 10 straight quarters. Net profit rose from Rs 2.22 crore in the December quarter of 2014 to Rs 18.33 crore in March quarter of FY17.

Shares of Emmbi Industries (up 873 per cent), Shiva Texyarn (up 769 pe cent), Prime Securities (up 757 per cent), AksharChem (up 593 per cent), Agarwal Industrial Corporation (up 588 per cent), Tata Metaliks (up 582 per cent), Jindal Worldwide (up 573 per cent) and Escorts (up 495 per cent) were among the other top gainers on the list.

Shares of Escorts have been in the limelight these days amid an improvement in outlook for the country’s agriculture sector due to a normal monsoon forecast for 2017, and a good Rabi harvest.

Besides these, share prices of Minda Industries, Bodal Chemicals, Ruchira Papers, Gufic BioScience, Phillips Carbon, Uniply Industries, SORIL Infra, Cineline India, Indiabulls Venture, Lumax Industries and Can Fin Homes have soared between 350 per cent and 490 per cent in last two years.

Bhansali Engineering, V-Guard Industries, Ceat, Heritage Foods and Swaraj Engines also made it to the list of 115 stocks that have delivered returns between 100 per cent and 200 per cent in last two years.

Bhansali Engineering is among the top wealth creation ideas of Vikas Sethi, MD of Sethi Finmart. In an interview with ETNow, he said, “There is a lot of steam left in Bhansali Engineering. This company is a leading manufacturer of ABS, which finds application in industries like automobiles, home appliances and telecom. They have a technical collaboration with a world leader like Nipponm Japan. The company has performed extremely well in terms of financial results. It net profits had actually gone up 20 times from Rs 75 lakh to around Rs 15 crore, and I feel with the increase in ABS prices because of production cuts in China, this company is going to do pretty well in the future. I like the stock at the current level of Rs 55 and have a target of Rs 85 in a year.”

Brokerage firm KR Choksey Shares and Securities has an ‘accumulate’ rating on Heritage Foods with a target price of Rs 1,205.

“With footprints across 10 states in India, Heritage Foods is a strong player in south India. The company plans is to remain focused on its core dairy business and invest in it. Most of its revenues come from the liquid milk business and it has plans to expand into value-added products, which will help improve revenue and margins,” KR Choksey said a research report.

Nearly 100 companies on the list gave negative returns to investors despite registering profits in every quarter since December 2014. Analysts attributed the slump to sector-specific issues.

The list includes state-run behemoth Coal India, IT major Tech Mahindra, Indoco Remedies, Eros International Media, Just Dial and JSW Energy, among others.

Overall, Ebitda for the Nifty50 companies grew 10.4 per cent YoY in Q4FY17, driven primarily by commodity companies.

Brokerage ICICI Securities said the January-March quarter was the second straight quarter where commodities boosted operating earnings of the Nifty50. But with global commodity prices stagnating, the favourable base effect will disappear from Q1FY18. PAT growth for the Nifty50 in Q4FY17 was not a true representative of the underlying growth in corporate India, as there is significant volatility in the constituents. The Nifty50 PAT growth for Q4FY17 stood at 5.9 per cent and 2.6 per cent, if one were to exclude commodities and financials.
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