Earnings season of India Inc started on a mixed note. Bellwether Reliance Industries reported better-than-expected financial results for the quarter ended June 30, 2016 whereas IT majors TCS and Infosys posted weaker-than-expected numbers. So far, companies such as LIC Housing Finance, DCB Bank, Exide Industries, Mastek and NIIT Technologies have also announced their quarter numbers for April-June 2016 period.
Below are five stocks on which experts are looking bullish post their Q1 results:
1) Reliance Industries: For the quarter ended June 30, 2016, Reliance Industries reported a consolidated net profit of Rs 7113 crore, up 18.08 per cent, against Rs 6024 crore in the corresponding quarter last year. Japanese brokerage firm Nomura in a research note said, “RIL reported a very strong set of numbers. We remain positive on RIL given our optimistic view on its core refining and petchem business. The share price of the company can touch Rs 1,260 in the next few quarters.”
2) Infosys: Consolidated net profit of the IT major fell by 4.48 per cent on quarter-on-quarter basis to Rs 3,436 crore against Rs 3,597 crore in the sequential quarter ended March 31, 2016. However, gross sales of Infosys jumped 1.40 per cent on quarter-on-quarter basis.
According to Reliance Securities, Infosys after several quarters of good performances delivered a disappointing quarter in 1QFY17. The brokerage house in a research note said, “We slightly reduce our revenue/EPS growth estimates for Infosys by 1-2 per cent for FY17E/FY18E. The steep fall in Friday’s stock price has made valuations more comfortable. With expectations now suitably watered down, we believe Infosys’ underlying operating metrics imply improving growth ahead. We retain our ‘Buy’ rating on the stock, with a revised target price of Rs 1,275.” On Friday, shares of Infosys were at Rs 1,072.75.
3) LIC Housing Finance: LIC Housing Finance reported 6.73 per cent rise in net profit figures for the quarter ended June 30, 2016 against Rs 382.13 crore in the corresponding quarter last year. According to KR Choksey Shares and Securities, the first quarter proved to be a decent quarter for LIC Housing Finance. Post results, the brokerage house raised target price for LIC Housing Finance shares to Rs 618 (earlier Rs 568).
4) NIIT Technologies: NIIT Tech reported 70.22 per cent fall in Q1 net profit figures at Rs 21.40 crore against Rs 71.87 crore in the corresponding quarter last year. According to JM Financial, PAT was impacted by one-time provision of Rs 36.1 crore. The company however reiterated a pickup in growth and margins from 2QFY17 onwards. Consistent deal wins, healthy pipeline and a scheduled ramp-up of Ofcom deal should help. “We lower our FY17/18E dollar revenues by 4 per cent/4 per cent and EPS by 6 per cent/7 per cent to factor in a weak 1Q and potential cross-currency impact. After 14 per cent correction in past one month and a seasonally strong 2Q ahead, the current levels offer a good entry point. We maintain ‘Buy’ on NIIT Technologies with a revised target price of Rs 590 (from Rs 640).”
5) IndusInd Bank: For the quarter ended June 30, 2016, IndusInd Bank reported 25.97 per cent rise in net profit at Rs 661.38 crore against Rs 525.04 crore in the same quarter last year. According to Religare Institutional Research, IndusInd Bank registered strong Q1FY17 results. Loan growth was robust at 30 per cent year-on-year with the retail book increasing by 29 per cent YoY and 6 per cent QoQ. Lower cost of funds supported a 3bps QoQ expansion in NIMs to 3.97 per cent. Growth in core fee income was also strong at 23 per cent YoY. Asset quality remained healthy with a robust performance across parameters.” The brokerage house maintains ‘Buy’ on IndusInd Bank with target price of Rs 1,220.