Topping the list of stocks with rising institutional ownership in FY23 is L&T Finance Holdings which has delivered around 30% return in a little over two months. Smallcap Maharashtra Scooters is up over 26% in the new financial year while Arvind Smartspaces, Devyani International and Syngene International have also delivered over 20% return each.
Other stocks in the list that have given double-digit returns are BHEL, Hikal, Mayur Uniquoters, Tata Coffee and Natco Pharma.
For the sake of this study, we included only those stocks with a market capitalisation of at least Rs 500 crore.
L&T Finance Holdings
Driven by increasing share of retail assets, especially rural finance, L&T Finance Holdings reported 16% YoY growth in its net interest income (NII) in March quarter. The NBFC’s overall loan book growth declined by 8% YoY mainly driven by large sell downs in the wholesale book.
“Accelerating retail growth will support earnings; however, diminishing wholesale book will constrain net loan growth and RoE even in a favourable scenario. RoEs are expected to remain subdued over the near to medium term unless the company chooses to make large dividend payouts, which could only happen after the merger of L&T Finance Limited and L&T Infra Credit Limited,” domestic brokerage Sharekhan said.Maharashtra Scooters
Maharashtra Scooters, a subsidiary of Bajaj Holdings and Investment, is engaged in the manufacturing of pressure dies, casting dies, jigs and fixtures, primarily meant for the two and three-wheeler industry. Top investors include Parag Parikh Flexi Cap Fund which owns 1.73% stake in the smallcap and veteran Raamdeo Agrawal with 1.54% stake.
Arvind Smartspaces
Ahmedabad-based realty player Arvind SmartSpaces has recently forayed into Pune and has plans to enter the MMR market too.
“The company has a strong balance sheet position, capable leadership team, and long-term strategic partnership with HDFC Capital, one of the most reputed institutional names in real estate funding in India. We expect ARIL to continue on its growth trajectory in the wake of the strong housing upcycle,” Antique Stock Broking said.
Devyani International
Devyani International, the largest franchise of Yum! Brands including KFC and Pizza Hut in India, reported a 19% YoY fall in consolidated net profit to Rs 61 crore in the March quarter. Jefferies has reduced its Ebitda forecasts by 1-4% and lowered SSG assumptions and downgraded the stock to hold.
Syngene International
Syngene International, the listed contract research and manufacturing services arm of Biocon reported a 21% year-on-year (YoY) jump in net profit to Rs 179 crore in Q4.
MF ownership in the stock has gone up from 2.79% in June 2022 to 8.35% in March 2023. Similarly, FII holding has also increased from 14.12% to 23.31% during the period.
BHEL
Global brokerage Nomura has reduced BHEL’s EBITDA by 13%/4% for FY24/25F to factor in delayed order inflow and weak gross margins. It has downgraded the stock to reduce from neutral with a lower target price of Rs 61, factoring in the slower pace of cash generation.
Hikal
Hikal’s share price has grown at a CAGR of 38.4% over the past three years. Following the pharma company’s March quarter earnings, ICICI Securities has maintained a hold rating on the stock saying that a recovery in EBITDA margins is awaited to reach base level of 18-20% and also consistency in its performances.
Mayur Uniquoters
Mayur Uniquoters (MUL) is a leading player in the technical textile domain, manufacturing synthetic leather for automotive, footwear & apparels, etc. In FY23, it clocked Rs 776 crore as consolidated sales with EBITDA & EBITDA margins at Rs 139 crore, 17.9% and PAT at Rs 104.2 crore. ICICI S ecurities has a target price of Rs 610 on the stock.
Tata Coffee
Both mutual funds and FIIs own around 3% each in the Tata Group company which reported a 19.66% YoY growth in consolidated net profit during the quarter ending March 31, 2023. The company’s net profit stood at Rs 40.78 crore during the corresponding quarter of 2021-22.
Natco Pharma
In the March quarter, Hyderabad-based Natco Pharma reported a net profit of Rs 275.8 crore as against a net loss of Rs 50.5 crore in the corresponding quarter of last fiscal. Its revenue grew 50% and margins were driven by higher sales in the export market.
“We raise our revenue estimates by ~17-26% over FY23-FY25E as we include gRevlimid into our sales assumptions. Consequently, our EPS estimates have been increased by ~53%-81%,” ICICI Securities analyst Abdulkader Puranwala said. The stock is now at 10x FY25E EPS.
The brokerage has maintained a hold rating on the pharma counter with a revised target price of Rs 650.
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