Tata Motors, Just Dial Among Top Four Firms That Expanded Margin Consistently In FY23
Bharat Dynamics Ltd., Just Dial Ltd., Lupin Ltd., and Tata Motors Ltd. are among the top 10 Indian companies that showed consistent improvement in their operating margin over the course of the previous fiscal, a period market by higher input costs for most sectors.
The companies were shortlisted on the basis of following criteria:
BSE 500 companies
Tracked by at least five analysts
Ebitda margin in each subsequent quarter must be greater than the previous quarter.
The Ebitda margin expanded for 159 companies out of the S&P BSE 500 in the fiscal 2023, according to an analysis by BQ Prime. But only 37 showed consistent improvement over all four quarters, the study showed.
Bharat Dynamics Ltd. leads the list of the best performers, followed by business search engine Just Dial Ltd.
Bharat Dynamics
The missile systems and ammunition manufacturer reported a 23% Ebitda margin in the March quarter, almost four times the initial quarter figure of 6%.
It gives guidance for a continued rise in Ebitda margin, expecting it to be in the range of 20–30%, with a slight reduction in capital expenditure from Rs 113.91 crore this year to Rs 100 crore for the current one.
Target revenue stands at Rs 3,200 crore, which would be a 20.99% growth from the previous year's figure of Rs 2,644.79 crore.
Of the six analysts tracking the scrip, five suggest a 'buy' rating and one suggests a 'sell' rating, according to Bloomberg data. The 12-month consensus target price implies a potential upside of 10.7%.
Just Dial
The internet technology company more than tripled its fourth-quarter Ebitda margin of 14.28% as compared to the first-quarter figure of 4.52%.
Of the 13 analysts tracking the company, nine suggest a 'buy' rating, two recommend a 'hold' rating, and two suggest a 'sell' rating, according to Bloomberg data.
The 12-month consensus target price implies a potential upside of 7.6%.
Lupin
The pharmaceutical multinational experienced Ebitda margin of 13.95, over three times its first quarter figure of 4.55%.
The company plans to launch 21 products over the current year and gives guidance of a 15% margin, according to a Yes Securities report.
Of the 42 analysts tracking the stock, 13 suggest a 'buy' rating, 13 recommend a 'hold' rating, and 16 suggest a 'sell' rating, according to Bloomberg data.
The 12-month consensus target price implies a potential downside of 8.9%.
Tata Motors
As the third-most valuable company by market cap in the Tata Group, it reported an Ebitda margin of 12.18% in the last quarter, a jump from its initial quarter figure of 4.47%.
The company gave an over 6% EBIT margin and double-digit Ebitda margin guidance, with a revenue of over £28 billion. Converted according to the current rupee-pound rate, it translates to Rs 2,89,854 crore.
It expects free cash flow of over £2 billion or Rs 20,704 crore and a net debt to reduce by £1 billion or Rs 10,352 crore.
Of the 36 analysts tracking the stock, 28 suggest a 'buy' rating, three recommend a 'hold' rating and five suggest a 'sell' rating, according to Bloomberg data. The 12-month consensus target price implies a potential upside of 7%.
Here are the top 10 firms that expanded Ebitda margin the most, compared to the initial quarter:
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