Tech Mahindra, HCLTech, Indigo, Tata Steel, ICICI Bank, Vedanta will remain under watch.

Stocks to Watch: Tech Mahindra, HCLTech, Indigo, Tata Steel, ICICI Bank, Vedanta

Tech Mahindra reported a significant decline in its consolidated net profit for Q4FY24, dropping by 41% to ₹661 crore. The company also witnessed a 6.2% decrease in revenue from operations during the fourth quarter, amounting to ₹12,871.3 crore compared to the previous year.

Similarly, Tech Mahindra’s net profit for the March quarter plummeted by 41% to ₹661 crore, as opposed to ₹1,117.7 crore in the corresponding period last year. Additionally, the company’s revenue experienced a 6.3% decrease in the fourth quarter, totaling ₹13,718 crore compared to the same period last year.

For FY24, Tech Mahindra saw a 51.2% year-on-year decline in consolidated net profit, amounting to ₹2,358 crore. The company’s revenue for FY24 stood at ₹51,996 crore, marking a 2.4% decline from the previous fiscal year.

In light of these financial results, the board of Tech Mahindra proposed a final dividend of 560%, translating to ₹28 per equity share with a face value of ₹5 each.

IndiGo has ventured into the long-haul market by placing an order for 30 wide-body aircraft, specifically the Airbus A350-900 models. These aircraft will be powered by Rolls Royce’s Trent XWB engines. This strategic move marks IndiGo’s entry into the wide-body aircraft segment, a domain previously dominated by Air India and Vistara. Currently, IndiGo operates a fleet comprising over 360 aircraft.

In June 2023, the airline made headlines by placing a substantial order for 500 aircraft with Airbus during the Paris Air Show. This recent order further bolsters IndiGo’s total order book to approximately 1,000 aircraft, which includes variants such as the Airbus 320, 321, and 321XLRs.

Reports from Mint in November had hinted at IndiGo’s negotiations with aircraft manufacturers to acquire up to 20 wide-body aircraft, aligning with the company’s strategy to enhance its international operations. With this latest order for 30 Airbus A350-900s, IndiGo aims to strengthen its presence in the global aviation market and expand its offerings to long-haul routes.

HCL Technologies is poised to unveil its Q4 results for the fiscal year 2023-24 on April 26, with expectations of relatively stagnant revenues compared to the previous quarter. Analysts anticipate that the company’s products and platforms (P&P) business may negatively impact its earnings, despite potential support from the services business. The anticipated decline in the profitable P&P segment is likely to have an adverse effect on HCLTech’s net profit for the fourth quarter.

According to the average forecast of seven brokerages, HCL Technologies is expected to report a net profit of ₹4,054.71 crore in Q4 FY24, reflecting a 6.78% decrease quarter-on-quarter (QoQ). Meanwhile, the company’s revenues are forecasted to experience a marginal uptick of 0.37% QoQ, reaching ₹28,552.64 crore. However, analysts project a decline in the EBIT margin by 152 basis points (bps) QoQ, settling at 18.18%. These projections suggest a challenging quarter for HCL Technologies, particularly in light of potential headwinds in its P&P business.

Tata Steel: The company announced on Thursday that it has successfully negotiated a formal agreement with UK trade unions that clears the path for a £1.25 billion electric arc furnace project at the company’s Port Talbot plant, which will replace two outdated blast furnaces. Securing the support of the trade unions was a critical step before the steelmaker could move forward with its plans. Reports from British media suggest that this plan could result in as many as 2,800 job losses. This agreement was reached after Tata Steel turned down a union proposal to keep one of the blast furnaces operational at the plant in an effort to preserve jobs, reported The Guardian. The company stated in a press release on Thursday that maintaining one blast furnace during the transition would have led to at least £1.6 billion in extra costs, posed operational and safety risks, and jeopardized the future stability of the business.

IndusInd Bank reported a robust performance in the January-March quarter of the 2023-24 fiscal year, showcasing a 15% increase in net profit to ₹2,349 crore. This figure exceeded analysts’ expectations, which had forecasted a profit of ₹2,322.7 crore. The bank’s net interest income (NII) also saw a significant uptick, rising by 13.9% to ₹5,376.4 crore compared to ₹4,669.5 crore in the same quarter of the previous fiscal year.

The key drivers behind IndusInd Bank’s strong performance included an 18% increase in net loans, surpassing the growth rate of deposits, which stood at 14%. Moreover, the bank managed to improve its asset quality, with the gross non-performing asset (NPA) ratio decreasing to 1.92% from 1.98% year-on-year, and the net NPA ratio improving to 0.57% from 0.59%.

However, operating expenses for the quarter ending March 31, 2024, witnessed a notable rise, increasing by 24% to ₹3,803 crore compared to ₹3,066 crore for the same quarter of the previous year. Despite this, IndusInd Bank remained resilient and declared a dividend of ₹16.50 per equity share with a face value of ₹10, underlining its commitment to shareholders amidst a challenging operating environment.

Nestle India demonstrated a robust performance in the quarter ending in March, with a notable 27% year-on-year increase in net profit, reaching ₹934 crore, surpassing market expectations of ₹847 crore. Additionally, the company’s revenue from operations for the January-March quarter saw a commendable growth of 9%, amounting to ₹5,268 crore compared to ₹4,830 crore reported in the corresponding period last year.

One of the key highlights of Nestle India’s performance was the achievement of domestic sales crossing the ₹5,000 crore mark during this quarter. Moreover, the company announced the highly anticipated launch of NESPRESSO in India, signaling its commitment to expanding its product portfolio and catering to evolving consumer preferences.

In a strategic move to further enhance its market presence, Nestle India has entered into a definitive agreement to establish a joint venture with Dr. Reddy’s Laboratories. This collaboration aims to deliver science-backed nutritional solutions to a wider consumer base across the country by leveraging Dr. Reddy’s extensive retail and distribution network. Under the agreement, Dr. Reddy’s will hold a majority stake of 51% in the joint venture company, with Nestle India holding the remaining 49%.

Overall, Nestle India’s strong financial performance, coupled with strategic initiatives such as the NESPRESSO launch and the joint venture with Dr. Reddy’s, underscores its commitment to driving growth and innovation in the Indian market.

On April 24, concerns arose among some ICICI Bank credit card holders who reported an alarming issue on social media platforms. They discovered that upon accessing their iMobile Pay app, they could view the credit card details of other ICICI Bank customers. This included sensitive information such as the full card number, expiry date, and CVV, posing a significant security risk.

Upon investigation, it was revealed that approximately 17,000 newly issued credit cards were incorrectly mapped to unrelated users, leading to this data exposure. However, it’s noteworthy that this error impacted only about 0.1 percent of the bank’s overall credit card portfolio. Fortunately, there were no reported instances of misuse or fraudulent activity stemming from this issue.

In response to the incident, ICICI Bank promptly took action by blocking the affected credit cards and initiating the process of issuing new ones to the affected customers. This swift response demonstrates the bank’s commitment to addressing customer concerns and ensuring the security of their financial information.

Ashok Vaswani, the Chief Executive Officer of Kotak Mahindra Bank, communicated to his employees via email regarding the recent regulatory actions taken by the Reserve Bank of India (RBI). The RBI had instructed the bank to halt the addition of new customers through its online portal and mobile app, as well as the issuance of new credit cards. These directives were issued due to identified deficiencies in the bank’s IT system.

In the email, reviewed by Mint, Vaswani acknowledged the challenges posed by the surge in business through digital channels and emphasized the need for a robust technology infrastructure to support it. He assured employees that the bank is actively addressing the issues highlighted by the RBI and is committed to building the necessary technology infrastructure to meet regulatory requirements.

Vaswani’s email underscores the bank’s commitment to resolving the issues promptly and ensuring compliance with regulatory standards. It also highlights the importance of leveraging technology to support the bank’s digital business operations effectively.

On Thursday, April 25, Cyient reported a significant 28.5% quarter-on-quarter (QoQ) increase in net profit, reaching ₹196.9 crore for the fourth quarter ending March 31, 2024. This marked a notable improvement from the net profit of ₹153.2 crore reported in the December quarter. Despite this positive development, the company’s operational revenue saw only a modest increase of 2.2%, rising from ₹1,821.4 crore in the third quarter to ₹1,860.8 crore in the March quarter.

Earnings before interest and taxes (EBIT) also experienced a slight uptick, rising by 3.1% to ₹268.1 crore in the fourth quarter compared to ₹260 crore in the previous quarter. However, it’s worth noting that the EBIT margin decreased from 21.5% in the previous quarter to 16.9% in the reporting quarter.

For the fiscal year 2024, the Cyient Group reported a revenue of $863 million, representing a significant year-on-year growth of 15.6%. The company’s EBIT stood at 14.5%, and the profit after tax (PAT) amounted to ₹735 crore, marking a substantial 30% increase from FY23. Additionally, the free cash flow (FCF) surged by 32.6% to ₹648 crore, indicating strong financial performance and cash generation capabilities for the period.

The March quarter proved challenging for Vedanta, as the company faced a significant drop in profits compared to the previous year. Various factors contributed to this decline, including lower commodity prices, increased borrowing costs, and exceptional charges.

The company’s profit, amounting to ₹1,369 crore, witnessed a notable 27% decrease compared to the previous year. This decline was primarily attributed to the lower prices of metals like aluminium and zinc during the quarter, which resulted in a 6% year-on-year decrease in the company’s top line, standing at ₹34,937 crore.

Similarly, Vedanta’s EBITDA also experienced a decrease, totaling ₹8,196 crore for the quarter. Despite these challenges, the EBITDA margin remained relatively stable at 23.5%, dipping only slightly by 6 basis points compared to the same period last year.

One of the significant contributors to the company’s reduced profitability was the increased borrowing cost, which amounted to ₹2,415 crore for the quarter, marking a 34% increase from the previous year. This rise in borrowing costs was fueled by Vedanta’s net debt, which surged to ₹56,338 crore as of March 31, compared to ₹45,260 crore a year ago.

Despite these challenges, Vedanta managed to make progress in reducing its net debt by ₹6,155 crore during the January-March quarter. This reduction reflects the company’s efforts to address its financial obligations and improve its overall financial health amidst challenging market conditions.

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