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The Indian market has been witnessing volatility in the last few session as the earnings season kicked off for the Indian Inc. Concerns over US-China trade deal, stressed financial sector and expectation of a further stimulus by the government have also added kept investors on their toes.
Analysts expect the earnings to remain tepid this quarter. Meanwhile, some of the companies have already declared their earnings for the quarter ended September 2019.HUL, Infosys and Avenue Supermarts are the three companies which got a pat on the back from the brokerages after their Q2FY20 results.
Avenue Supermarts
D-Mart operator, Avenue Supermarts posted a 47.54 percent year-on-year jump in its net profit at Rs 322.63 crore, while revenue increased 22.26 percent to Rs 5,998.90 crore. Its EBITDA rose 32.3 percent to Rs 515.4 crore and EBITDA margin was up 8.66 percent.
ICICIdirect reiterated reduce rating on the stock with a revised target price to Rs 1,700 from previous target price of Rs 1,450.
On the back of recent corporate tax rate cut, it revises earnings estimates upwards by 15 percent.
Hindustan Unilever
FMCG major Hindustan Unilever (HUL) registered 21 percent year-on-year jump in its net profit at Rs 1,848 crore. Its EBITDA was at Rs 2,443 crore, up 21 percent. The domestic consumer segment of the company grew by 7 percent with underlying volume growth at 5 percent.
Prabhudas Lilladher retained it accumulate rating but raised the target to Rs 2,083 from Rs 1,967 per share.
It has cut company's FY20 and FY21 EPS by 1.1 percent and 2.6 percent despite 5 percent volume growth and strong margin expansion on account of delayed rural recovery despite good monsoons, limited scope to increase margins from the current level and liquidity issues in trade channels.
ICICIdirect maintained its hold rating on stock with a target price of Rs 2,075.
Broking house feels that the company is best placed within the sector to use this windfall to balance between strengthening its competitive position and improving profitability.
Infosys
The company reported a 5.8 percent sequential growth in Q2FY20 with its net profit at Rs 4,019 crore. Revenue during the quarter rose 3.8 percent QoQ to Rs 22,629 crore, while in dollar terms revenue rose 2.5 percent at $3,210 million.
KR Choksey has reiterated accumulate rating on Infosys and revised target price to Rs 893 per share (previous target Rs 792) with an upside potential of 10 percent.
The brokerage house expects the company to continue this momentum
going forward as it plans to invest heavily in the expansion of digital segment in the areas like Data Analytics, Cloud computing and IoT.
ICICIdirect has maintained its hold rating on the stock with a revised target price of Rs 885.
It expect revenue growth to moderately surpass the upper guided band and margins are likely to see an improving trajectory from here on . They expect margins to expand to 23 percent in FY21E.
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