Stocks to Watch: RIL, Adani Group, HDFC Bank, Tata Consumer, Mahindra Logistics

Adani Group companies: The Securities and Exchange Board of India (SEBI) discovered that twelve offshore funds investing in Adani group companies had violated disclosure rules and exceeded investment limits, according to two individuals with firsthand knowledge of the situation. These individuals chose to remain anonymous as they were not authorized to speak to the media. Earlier this year, SEBI sent notices to a dozen offshore investors in the Adani group, outlining the charges and requesting explanations for the disclosure violations and breaches of investment limits. “The offshore funds were disclosing their investments in Adani group companies at the individual fund level. The regulator, however, wanted the disclosure of holdings at the offshore fund group level,” one of the sources explained. Eight of these offshore funds have submitted written requests to the regulator, proposing to settle the charges by paying a penalty without admitting guilt.

Tata Consumer Products: The company is set to announce its Q4FY24 and full year earnings on April 23. Analysts predict that its revenue growth will surpass that of its industry counterparts, bolstered by beverage sales, increasing salt volumes, and the acquisition of Capital Foods, the proprietor of the Ching’s Secret brand. As per analysts’ estimates, Tata Consumer’s revenue is projected to grow by 4.8% YoY to ₹3,989 crore. The bottom line growth is expected to be around 13.4% higher YoY at ₹329 crore. The EBITDA margin is anticipated to widen by 100 basis points YoY, aided by moderate tea costs and steady salt cost. A basis point represents one-hundredth of a percentage point.

Mahindra Logistics: On Monday, April 22, Mahindra Logistics announced a net loss of ₹11.9 crore for Q4FY24 compared to a net profit of ₹0.20 crore in Q4FY23. The company’s operational revenue saw a 14% increase to ₹1,450.8 crore, compared to ₹1,272.5 crore in the same period of the previous fiscal year. However, EBITDA experienced an 11.1% decrease to ₹56.6 crore in the quarter, down from ₹63.7 crore in the corresponding period of the previous fiscal year. The EBITDA margin was 3.9% in the reported quarter, compared to 5% in the corresponding period of the previous fiscal year.

Vodafone Idea: The company’s follow-on public offer (FPO), the largest in India at ₹18,000 crore, reached full subscription on its third day. This was largely due to the keen interest shown by global institutional investors such as GQG, Capital Group, and Fidelity Investments. The portions for qualified institutional buyers (QIBs) and non-institutional investors (NIIs) were subscribed 1.23 times and 1.93 times respectively, while the retail segment saw a subscription of 42%.

Tejas Networks: The company announced a net profit of ₹146.8 crore for Q4FY24, on Monday, April 22. This is a significant turnaround from the corresponding quarter last year when the company reported a net loss of ₹11.5 crore, as stated in a regulatory filing. The company’s operational revenue surged 343.40%, to ₹1,326.9 crore from ₹299.3 crore in the same period last year. The company reported trade receivables of ₹1,458 crore, with ₹650 crore successfully collected during the quarter. Consequently, the working capital witnessed a significant increase of ₹1,519 crore. Additionally, Tejas and its subsidiaries were granted 22 patents in the fourth quarter of FY24, bringing the total count to 335.

HDFC Bank: Mitsubishi UFJ Financial Group Inc. is contemplating enhancing its $1.7 billion bid for a minority share in HDFC Bank Ltd.’s consumer lending division in India. The deal’s success could depend on the valuation and the Japanese bank’s involvement in strategic decisions, as per sources close to the matter. Both parties are aiming to finalize an agreement within approximately a month, according to these anonymous sources.

Hindustan Zinc: Hindustan Zinc has set aside $300 million for capital expenditure in FY25 to construct a new roaster in Rajasthan, as stated by Chief Financial Officer Sandeep Modi in an interview. Modi emphasized that the company’s robust cash flow would suffice to fund the project, eliminating the need for extra borrowing. Modi further stated, “We have ample cash flow…we have over ₹10,000 crore of liquidity at our disposal. We have no plans to resort to borrowing solely for the capex.” He also mentioned that the allocated capex would be directed towards the company’s renewable energy initiatives.

CMS Info Systems: The company specializing in cash management services is set to diversify its operations into gold logistics and retail loan repayment collections. The company, which reported revenues exceeding ₹2,000 crore in fiscal 2023, has already tested and incubated two business lines – bullion logistics and debt collections – and is on the verge of launching these businesses commercially. With a revenue growth of over 20% in the past three years, CMS is looking forward to additional growth from these new ventures.

Tamilnad Mercantile Bank: On Monday, April 22, Tamilnad Mercantile Bank reported that its net profit for Q4FY24 remained steady at ₹253 crore. The Net Interest Income (NII) saw a 7.5% increase, rising to ₹567 crore from ₹527.3 crore in the same quarter of FY23. The Gross Non-Performing Assets (GNPAs) were at 1.44% in the March quarter, down from 1.69% in the December quarter. Similarly, Net NPAs were at 0.85%, down from 0.98% quarter-on-quarter. The net profit for FY24 was ₹1,072 crore as of March 31, 2024, a 4.18% increase from ₹1,029 crore in the year ending March 31, 2023. The bank’s deposits increased to ₹49,515 crore, up from ₹47,766 crore in FY23. The advances increased to ₹39,970 crore, growing at a rate of 6.35%. The Net Interest Income rose to ₹2,151 crore as of March 31, 2024, up 2.72% from ₹2,094 crore in FY23.