Top Stocks to Watch: Britannia, Ashok Leyland, Nestle, Nykaa, Godrej Properties

On Wednesday, February 7th, domestic benchmarks may open with a positive gap supported by global cues. At 7:35 AM, Gift Nifty futures were up 144 points at 22,124 levels. 

Britannia Industries: The biscuit manufacturer, Britannia, reported a decline in its consolidated net profit of 40 percent year-on-year, amounting to Rs 556 crores for the quarter ending December 31, 2023. This is in contrast to the Rs 937 crore it had reported in the corresponding quarter of the previous year, and it missed market estimates. In sequential terms, Britannia's profit experienced a 5 percent decline, amounting to Rs 587 crore. However, revenue from operations increased slightly to Rs 4,256 crore from Rs 4,196 crore in the corresponding quarter last year. Analysts had anticipated a year-on-year revenue growth of 3 percent, reaching Rs 4,303 crore for the quarter. The company disclosed an EBITDA of Rs 821 crore for the quarter, with margins registering at 19.29 percent.

Ashok Leyland: The main focus for the commercial vehicle manufacturer in FY24 is achieving a stellar margin performance. Ashok Leyland has shown a sequential improvement in EBITDA margin for the second consecutive quarter. In Q3FY24, their EBITDA margin improved to 12 percent, up from 11.2 percent in Q2 and 10 percent in Q1. This means that the year-on-year Q3 EBITDA growth increased by almost 40 percent to Rs 1,114 crore with a 320 basis points (bps) margin expansion. This happened even though revenue growth was at a mere 2.7 percent, largely due to lower volumes.

Nestle India: The fast-moving consumer goods (FMCG) industry leader is expected to report strong double-digit earnings growth for the quarter that ended on December 31, 2023, when it releases its earnings report on Wednesday, February 7. The company is likely to have benefited from higher volumes, price-led growth, and improved operating leverage during the quarter. According to analysts' estimates, the net profit for the quarter is expected to rise by 18 percent year-on-year (YoY) to Rs 745 crore. The revenue is expected to increase by 10.3 percent to Rs 4,697 crore, while the operating profit is expected to grow by 15.3 percent to Rs 1,126 crore. However, compared to the previous quarter, the earnings are expected to be weaker, with the net profit likely to decrease by almost 8 percent, due to a 7 percent fall in revenue and an 8.4 percent decline in operating profit.

Nykaa: FSN E-Commerce Ventures, the parent company of Nykaa, a beauty and fashion retailer, has reported a 98 percent increase in net profit to Rs 16.2 crore (attributable to equity shareholders) in Q3FY24, compared to Rs 8.2 crore in the same period last year. The total net profit (attributable to shareholders and non-controlling assets) has surged 106 percent to Rs 17.5 crore, compared to Rs 8.5 crore in the year-ago period. The increase in net profit is driven by strong demand during the festival and wedding seasons, which more than doubled in the quarter under review. During Q3FY24, the company's revenue from operations rose by 22 percent to Rs 1,789 crore, compared to Rs 1,462 crore in the year-ago period. The company's earnings before interest, taxes, depreciation, and amortization (EBITDA) during the December quarter rose by 26.4 percent to Rs 99 crore, compared to Rs 78 crore in the year-ago period.

Godrej Properties: The real estate major reported a consolidated net profit of Rs 62.47 crore for the quarter ended December 2023, registering a 6 percent growth from Rs 58.49 crore in the same quarter last year. Revenue in Q3FY24 rose 68 percent to Rs 330.44 crore from Rs 196.23 crore, year-on-year (YoY). Sales Bookings grew by 76 percent  YoY to Rs 5,720 crore in Q3FY24 and 59 percent  YoY to Rs 13,008 crore in 9MFY24. Q3FY24 was the company’s highest-ever quarterly sales for the second quarter in a row with 4.34 million sq. ft. of area sold. Collections and Net Operating Cash flow grew by 43 percent to Rs 2,411 crore and 45 percent to Rs 798 crore, respectively in Q3FY24, Godrej Properties said in a release.

Tata Consumer Products: The FMCG major is expected to report double-digit growth in profit for Q3FY24 when it reports its third-quarter results on Wednesday, February 7, on the back of sustained growth in volumes in the India business, steady international business and operating leverage benefits. The company’s net profit for the quarter is seen rising 26 percent year-on-year (YoY) to Rs 344 crore, according to analysts' estimates. Revenue from operations may rise 9 percent to Rs 3,779 crore and operating profit is also likely to grow by 59.3 percent to Rs 723.20 crore. Sequentially, the net profit is seen declining 2.6 percent and revenue rising 1.2 percent, while operating profit may surge 35 percent.

Adani Enterprises, Ambuja Cements, ACC & Sanghi Industries: Sanghi Industries, a cement maker, has received support from proxy advisory firm InGovern for its proposals to purchase bulk coal from Adani Enterprises and sell cement produced in bulk to Ambuja Cements and its subsidiary ACC. Ambuja Cements acquired a majority stake in Sanghi Industries in the previous year. In 2022, the Adani Group acquired Ambuja Cements and ACC. InGovern observed that although the price for the sale of cement and clinker was below market benchmarks, the transaction would help Sanghi Industries achieve higher capacity utilization, ultimately leading to profitability. It is worth noting that other major domestic proxy advisory firms do not cover Sanghi Industries.

Eveready Industries India: The battery manufacturer, Eveready, announced on Tuesday that their third-quarter profit had risen by 55 percent. The increase was attributed to the reduction in input costs, which led to a decrease of almost 9 percent in total expenses, amounting to 2.95 billion rupees. Raw material costs also declined by 29 percent. As a result, the consolidated net profit for the three months to December 31 increased to 84.1 million rupees ($1 million). However, despite the rise in profits, Eveready's revenue fell by almost 8 percent to Rs 3.05 billion.

EIH Limited: The leading company of The Oberoi Group has reported a revenue of Rs 770 crore for the third quarter that ended on December 31. This represents a year-on-year increase of 28 percent. Additionally, it has reported a profit after tax of Rs 230 crore, which is up 55 percent compared to the same period in the previous fiscal year. EIH has also reported an EBITDA of Rs 353 crore, reflecting an increase of 56.3 percent year-on-year.

TTK Prestige: TTK Prestige, an Indian company that produces home appliances, has reported a higher profit for the third quarter. The strong demand for its cookware essentials drove the increase. In the October-December period, the consolidated net profit rose 8.5 percent to Rs 624.8 million ($7.5 million), which is a positive change after five straight quarters of declining profit. The revenue from operations also increased by 6.3 percent to Rs 7.38 billion. The third quarter coincided with the festive and wedding periods, during which consumers bought more kitchen appliances.