Continued improvement in operating efficiencies, easing cost pressures, and a healthy demand environment has driven strong earnings growth of corporate India, but what’s interesting to note is that some of them bounced back to profits after three quarters.

About 10 companies posted a profit in the quarter ended December, after reporting losses in the preceding three quarters, data by Ace Equity showed.

These 10 companies have a market capitalization of more than Rs 1,000 crore, and include new-age technology majors like PB Fintech and Delhivery.


The logistics services provider posted a profit of Rs 16 crore in the December quarter, after reporting losses in the preceding three quarters. Infact, the company reported its highest-ever quarterly EBITDA on the back of better operating leverage.

Most analysts were expecting the company to return to profits only in the first half of FY25, but the company achieved the same well in advance. Brokerage Nuvama Institutional Equities has retained “hold” rating on the stock post the results with a price target of Rs 450.

PB Fintech

The online financial services platform operator saw strong improvement in earnings in the December quarter, and reported a consolidated net profit of Rs 38 crore, compared to losses in the preceding three quarters. Revenue from its core online marketplaces – Policybazaar and Paisabazaar – grew 39% to Rs 593 crore, while the adjusted operating profit improved by Rs 50 crore. The management remains assertive of its guidance on Rs 10 billion profit in FY27, and JM Financial believes there are strong possibilities of positive surprises.

It has retained a “buy” rating on the stock post the stellar earnings, with a price target of Rs 1,010. The continued improvement in the earnings reflects in the stock, which has gained close to 79% in the last 1 year.

Bombay Dyeing and Manufacturing

This textile major has seen marque improvement in earnings, posting a profit of Rs 3,054 crore in the December quarter. In the preceding three quarters, the company posted losses, but trimmed them quarter after quarter.

Thanks to the steady improvement in the earnings, the stock turned a multibagger, giving returns of more than 124% in the last one year.

Inox Wind

The renewable energy firm saw a turnaround in its earnings, posting a profit of about Rs 4 crore in the last quarter. In the preceding three quarters, it reported losses but they came down steadily on a sequential basis. The improved performance and the government’s push towards renewable energy instilled confidence among retail investors, who increased their stake for three quarters in a row.

What should investors do?

Eventhough, the overall earnings growth slowed down in the December quarter compared to the September quarter, the upgrades outpaced downgrades, and the market remains optimistic about earnings growth even in FY25.

While earnings growth outlook remains positive, valuations of most stocks, particularly in the midcaps and smallcaps have run ahead of the fundamentals, believe most experts.

“Mid and smallcaps continue to deliver earnings but trading at significantly higher than long-term averages. So, our preference in this market is largecaps over mid- and smallcaps,” said Shibani Sircar Kurian, senior EVP, senior fund manager and head – equity research at Kotak Mahindra AMC.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)

(You can now subscribe to our ETMarkets WhatsApp channel)


Source link