The only Sensex firm to log 100% jump in Q3 profit: Should you invest in this blue chip stock?
Most of the stocks in the BSE Sensex pack reported growth in their net sales, operating profit and net profit figures for the quarter that ended December 31, 2022. However, Maruti Suzuki stood out with a superlative performance in terms of bottom-line growth. As many as 27 companies in the 30-share pack Sensex have announced their financial results to date.
The Country’s largest carmaker Maruti Suzuki reported a 130 per cent year-on-year growth in consolidated net profit at Rs 2,391.50 crore in Q3FY23. It had posted a profit of Rs 1,041.80 crore in the same quarter a year ago. Consolidated operating profit and net sales of the company also increased 96 per cent and 26 per cent, respectively, in Q3FY24.
Reliance Securities has a ‘Buy’ call on Maruti Suzuki with a target price of Rs 11,000, indicating an upside of 25 per cent against the current market price of Rs 8,770.
“Maruti Suzuki India delivered a strong performance in Q3FY23. In view of the strong products basket, likely margin expansion, export potential, strong return ratios and likely market share gain post new UV launches, we reiterate our ‘Buy’ rating on the stock,” the brokerage said.
JM Financial is also positive on Maruti Suzuki with a target of Rs 9,850-Rs 10,250. “After two consecutive years of volume decline, we believe that Maruti Suzuki is at the cusp of a new upcycle. New model launches, healthy order book and commodity or operating leverage tailwinds will further support strong performance going ahead,” JM Financial said in a report.
Financial majors including State Bank of India (SBI), IndusInd Bank, Axis Bank, Bajaj Finserv, Bajaj Finance and ICICI Bank also reported somewhere between 35 per cent and 65 per cent YoY growth in consolidated net profit during the quarter under review.
Nirmal Bang Securities is bullish on SBI with a target price of Rs 667. “SBI reported a healthy performance for Q3FY23 on the operating front, driven by NIM expansion and higher other income. Credit growth momentum continued to remain strong,” the brokerage said. Shares of SBI traded at Rs 546 in the afternoon trade on February 7.
Among the other banking majors, Systematix Institutional Equities fixed a target price of Rs 1,028 for ICICI Bank. Shares of the private sector lender traded at around Rs 847 at around 1.10 pm (IST) on February 7.
“ICICI Bank’s balance sheet is in a strong position in terms of provision coverage, contingent provision, and revision in provisioning policy. The bank has been able to gain market shares in credit and deposits and expand its core margin and operating profit margin,” the brokerage said.
Construction and engineering behemoth Larsen & Toubro posted 24 per cent YoY growth in consolidated net profit on a 17 per cent YoY rise in net sales. FMCG major ITC and banking major HDFC Bank posted a 23 per cent and 20 per cent, respectively, YoY rise in net profit.
HCL Technologies, Kotak Mahindra Bank, Housing Development Finance Corporation, Infosys, Tata Consultancy Services and Power Grid Corporation of India also posted over 10 per cent growth in net profit in Q3FY23. On the other hand, Hindustan Unilever, NTPC, Asian Paints, Sun Pharmaceutical Industries and Wipro posted 8 per cent, 6 per cent, 6 per cent, 5 per cent and 3 per cent, respectively, YoY rise in net profit for the quarter ended December 31, 2022.
Meanwhile, Tata Motors Ltd reported a profit after 7 quarters of losses. The auto major posted a consolidated net profit of Rs 2,957.71 crore in Q3FY23 against a loss of Rs 1,516 crore a year ago. Tata Steel posted a loss of Rs 2223.84 crore in Q3FY23 over a profit of Rs 9572.67 crore in Q3FY22. Ultratech Cement, Reliance Industries, Titan Company and Tech Mahindra posted 38 per cent, 15 per cent, 10 per cent and 5 per cent YoY fall in net profit during the quarter under review.
Julius Baer Equity Research maintained a ‘Buy’ view on Tata Motors with a target price of Rs 525. KR Choksey Shares and Securities also retained a ‘Buy’ view on Tata Motors with a target price of Rs 572. Shares of the company traded at Rs 433 in the afternoon trade on February 7.
While sharing its view on Tata Motors (TML), KR Choksey Shares and Securities said, “All three auto verticals- JLR, TML-CV and TML-PV improved on profitability metrics in Q3FY23. Management expects to sustain the improvement in margins and free cash flow generation in the coming quarters. Management expects chip supply to improve further leading to volume ramp-up, especially for JLR. Commodity costs are expected to be stable from here, which along with a focus on profitable growth should aid EBIT and free cash flows.”
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