Stocks in Focus: Axis Bank, Macrotech, LTIM, Nestle, Bajaj Finance, KMB

The stock markets in Asia were impacted early on Thursday by the volatile session on Wall Street the previous night. Japan's Nikkei fell by 1.7 percent, South Korea's Kospi dropped by 1 percent, while Hang Seng and Shanghai Composite experienced a decline of up to 0.3 percent. These are the stocks that investors should keep an eye on for Thursday, April 25th.

Axis Bank: Axis Bank reported a net profit of Rs 7,130 crore on Wednesday, April 24, which is a significant improvement from the Rs 5,728.4 crore loss the bank incurred in the same period last year. The bank's net interest income (NII), which is the difference between interest earned and paid, increased by 11.5 percent YoY to Rs 13,089 crore, up from Rs 11,742 crore in the previous year. For the quarter, Axis Bank's operating profit was Rs 10,536 crore, a 15 percent YoY increase. The core operating profit for the March quarter was Rs 9,515 crore, a five percent YoY increase. The net profit for Q4FY24 was Rs 7,130 crore, compared to a net loss of Rs 5,728 crore in Q4FY23, and it grew 17 percent QoQ. The bank's net interest margin (NIM) for Q4FY24 was 4.06 percent, a five bps QoQ increase. The board of the private sector lender recommended a dividend of Re 1 per equity share for FY24.

Macrotech Developers: The Mumbai-based real estate firm 'Lodha' has increased its pre-sales forecast for 2024-25 by 20 percent to Rs 17,500 crore due to strong demand and a healthy launch pipeline. The company achieved a record pre-sales high of Rs 14,520 crore in the previous fiscal year. Despite an 11 percent decrease in consolidated net profit to Rs 665.5 crore for the March quarter, the company saw an impressive three-fold increase in profit to Rs 1,549.1 crore for the full fiscal year. In contrast, the net profit was Rs 744.4 crore in the fourth quarter of 2022-23 and Rs 486.7 crore for the entire 2022-23 fiscal year. According to a regulatory filing, the company's total income increased to Rs 4,083.9 crore in Q4FY24 from Rs 3,271.7 crore in the same period last year. During 2023-24, the company's total income rose to Rs 10,469.5 crore from Rs 9611.2 crore in the 2022-23 fiscal year.

LTIMindtree: The revenue of LTIMindtree for the March quarter slightly decreased by 1.3 percent compared to the previous quarter, amounting to $1.07 billion in Q4FY24. However, the company's revenue for the full year reached $4.29 billion, marking a 4.4 percent increase from the previous year's $4.11 billion. The company reported a net profit of $553.4 million for the fiscal year ending on March 31, which is a 1.36 percent increase from its FY23 net profit of $545.7 million. Nevertheless, the company's net profit for the March quarter fell by 5.8 percent compared to the previous quarter, amounting to $132.4 million. Overall, LTIMindtree's revenue performance for FY24 and the March quarter mostly met analyst estimates. A Bloomberg poll of 38 analysts projected a net revenue of $4.27 billion for LTIMindtree by the end of FY24, and the company's quarterly revenue aligned with the expectation of 26 analysts who predicted a Q4 revenue of $1.07 billion. However, LTIMindtree fell short of the Bloomberg poll's expectation of reporting a net profit of $559.6 million for FY24 and $138.1 million for the March quarter of the previous fiscal year.

Kotak Mahindra Bank: The Reserve Bank of India (RBI) has taken action against Kotak Mahindra Bank for inadequacies in its IT system. As a result, the bank has been barred from accepting new customers via its online portal and mobile app, as well as issuing new credit cards. The RBI found that the bank's IT system had deficiencies and non-compliances in various areas for the years 2022 and 2023, including IT inventory management, patch and change management, user access management, vendor risk management, and data security. In response, a spokesperson for Kotak Mahindra Bank has stated that the bank has taken steps to adopt new technologies and improve its IT systems. The bank will also continue to work with the RBI to resolve any remaining issues.

Nestle India: The company is expected to experience an eight percent increase in its revenues during the quarter, owing to price hikes and robust rural distribution. Brokerage firms estimate that the company, which follows a January-December calendar year, will release its Q1CY24 results on April 25. According to the average estimates of seven brokerage firms, Nestle India is predicted to report a net profit of Rs 856 crore in Q1CY24, marking a 22 percent YoY increase and a 17.8 percent sequential rise. The company's revenue for the January-March quarter is expected to reach Rs 5,153 crore, reflecting a 13.3 percent QoQ growth. Operating margins are predicted to rise by 238 basis points YoY to 24.5 percent, driven by deflation in milk and palm oil prices. However, Kotak Institutional Equities reported that Robusta coffee prices surged by 45 percent YoY in Q1CY24.

Bajaj Finance: The non-banking financial company (NBFC) is expected to report strong growth in its revenue and profit for the quarter that ended in March 2024. The company will announce its results on April 25. The net profit for the fourth quarter is estimated to increase by up to 22 percent year-on-year, while the net interest income (NII) for the same period is expected to grow by up to 30 percent year-on-year. According to the company's recent update, the number of new loans booked during the fourth quarter increased by 4 percent to 7.87 million from 7.56 million. However, the number of new loans booked during the quarter was lower due to restrictions imposed by the RBI on the company, which affected the sanction and disbursal of loans under 'eCOM' and 'Insta EMI Card'. As of March 2024, the assets under management (AUM) have grown by 34 percent, amounting to approximately Rs 3.3 lakh crore. The AUM growth has been healthy at 6 percent quarter-on-quarter (QoQ). However, margins are expected to decline by 10 basis points QoQ due to a slight increase in CoF. The C-I Ratio is likely to remain steady. Credit costs and asset quality are projected to remain broadly stable QoQ.

IndusInd Bank: According to analysts at Prabhudas Lilladher, IndusInd Bank is expected to register a net profit of Rs 2,261 crore, which is an 11 percent year-on-year growth for the quarter ending March 2024 (Q4FY24). The bank's net interest income is predicted to increase by 18 percent year-on-year to Rs 5,496 crore, due to robust credit growth. The Q4 results for IndusInd Bank are scheduled to be declared on April 25, 2024. Furthermore, the asset quality is expected to remain stable in the January-March quarter, with consistent credit costs. Analysts forecast a decrease in credit costs by 25 basis points to 1.17 percent in Q4FY24 from 1.42 percent in the same period the previous year.

Zee Entertainment Enterprises: The promoters of Zee Entertainment Enterprises lodged a review petition challenging an order from December 2023 related to a loan default case. However, on Wednesday, the Bombay High Court rejected the petition. Justice Abhay Ahuja heard the case, which was filed by Zee promoters Cyquator Media, Essel Corporate Llp, and Direct Media Distribution Ventures. The court ordered Cyquator Media to deposit Rs 61.64 crore due to its default on repayments to Axis Finance, a non-banking subsidiary of Axis Bank, in December. The promoters claimed that Axis Finance had initiated the lawsuit to pressure them into repaying money they did not owe and that the lawsuit was not maintainable. In its lawsuit, Axis Finance sought to recover a term loan of Rs 100 crore that it had granted to Cyquator Media under agreements signed in June 2018. The loan had a tenure of three years with an annual interest rate of 10.35 percent. Any delay or default in payments would incur an additional annual interest of 2 percent. A comprehensive order on this matter is still pending.

Delhivery: The Canada Pension Plan Investment Board (CPPIB), which is a well-known Canadian pension fund, has sold off around 2.77 percent of its stake in Delhivery, a logistics service provider, for an estimated $110 million. This information has been revealed based on the bulk deal data disclosed on the exchanges. However, as per the same data, CPPIB still holds a 5.96 percent stake in Delhivery, which is a company backed by prominent investors such as Softbank, Nexus Ventures, Steadview Capital, and Fedex. It's worth noting that Softbank had earlier reduced its shareholding in Delhivery via block deals conducted in November and March 2023.