Up to 500% return: These companies are on a tear despite Covid-19 disruption
Rajratan Global Wire and JTL Infra posted 61% and 99.14% growth in net profit at Rs 53.13 crore and Rs 20.06 crore, respectively
At the time when India has been struggling to rein in the coronavirus pandemic, at least 10 companies have managed to report over 50% rise in net profit in the financial year 2021 with double-digit growth in the topline. These companies are from sectors like metal, finance, information technology and chemicals, according to data available with Ace Equity.
With a growth of 398.25%, chemical firm Bhansali Engineering Polymers emerged as the top company in the list. The consolidated net profit of the company has increased to Rs 333.90 crore in FY21 from Rs 67.02 crore last year. Shares of the company have gained 432% to Rs 153 since April last year. Gross sales of the company also increased by 17.68% YoY to Rs 1,524.34 crore. Likewise, Fineotex Chemicals, whose share price has advanced 380% in 13 months, reported 225% growth in net profit in 2020-21 on a 13% rise in revenue.
Going ahead, market watchers believe that the chemicals sector to sustain growth momentum on the back of a steady recovery in economic activities across user industries.
On the other hand, the net profit of LKP Securities grew 144% to Rs 3.97 crore during the period under review. Similarly, ICICI Securities, Indbank Merchant Banking Services, Tata Investment Corporation, Nippon Life India Asset Management reported between 60%-100% rise in net profit in FY21. Net sales increased between 10%-55% last fiscal. Shares of these companies have soared up to 171% since April 2020. Brokerages have benefited the most from the nationwide lockdown and rising work from home environment in FY21.
Expert views
From an investment perspective, KR Choksey is positive on ICICI Securities with a target price of Rs 578. “Company’s consistent efforts on operations, digitisation and partnerships with various players to uphold its market position has enabled ICICI Securities to grab the available market opportunity,” KR Choksey said in a report.
On the other hand, YES Securities is positive on Nippon India AMC with a target of Rs 452. “Nippon India AMC delivered better than expected performance on most operating parameters. Given our house view of a significant rally in Indian equity markets in the near term, we expect the AUM growth of the industry to remain strong. This shift of product mix towards a higher share of equity AUM shall lead to better profitability as yields on Equity AUM is 2x of the overall yields,” YES Securities said.
Other companies like Rajratan Global Wire and JTL Infra posted 61% and 99.14% growth in net profit at Rs 53.13 crore and Rs 20.06 crore, respectively. Shares of Rajratan Global Wire have gained 454% to Rs 1045.10 on April 27, 2021 from Rs 188.45 on March 31, 2020. On the other hand, JTL Infra has rallied 541% to Rs 512.05 from Rs 79.80 during the same period.
(Note: Article is based on the annual financial results available with corporate database Ace Equity. Majority of companies are yet to announce their results for FY21)