A trader works on the floor of the New York Stock Exchange (NYSE) in New York, U.S. (Photographer: Michael Nagle/Bloomberg)
Brokerages upgraded Avenue Supermarts Ltd. and Shriram City Union Finance Ltd. after both the companies reported better-than-expected December quarter earnings.
Earnings Highlight:
Shriram City Union Finance:
- Net interest income up 20 percent at Rs 916 crore.
- Net profit up 43 percent at Rs 225.5 crore
Avenue Supermarts:
- Revenue up 23 percent at Rs 4,095 crore.
- Net profit up 66 percent at Rs 252 crore.
- Earnings before interest, tax,depreciation and amortisation up 47 percent at Rs 422 crore.
- Margins at 10.3 percent versus 8.6 percent.
Here's what the brokerages had to say:
HSBC On Avenue Supermarts
- Upgraded to ‘Buy' from ‘Hold'; raised target price to Rs 1,600 from Rs 900 with a potential upside of 38 percent from yesterday's close.
- Avenue's December quarter's profits were significantly ahead of expectations.
- Revenue growth momentum and margin expansion led to beat.
- D-Mart business model is formidable, scalable and a winning proposition.
- Avenue will be able to capture value from structural growth ahead of competition.
- Valuation not ahead of long term fundamentals.
Kotak On Shriram City
- Upgraded to ‘Add' from ‘Reduce'; raised target price to Rs 2,275 from Rs 2,200 with a potential upside of 11.3 percent from yesterday's close.
- Signs of turnaround seen after several quarters of weak performance.
- Strong NII and decline in provisions lift net profit.
- Positives: strong growth in business loans, reduction in GNPL ratio and provision and lower borrowing costs.
- Expect business trajectory to improve hereon.
- Expect near-term performance to remain strong.
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