Stocks to Watch: Tata Consumer, HUL, ICICI Pru., Tata Elxsi, Lupin, Dr Reddy’s

Dr Reddy’s Laboratories: The company announced on Tuesday that it is proactively withdrawing six lots of a medication designed to lower blood phenylalanine (Phe) levels from the US market due to subpotency. The pharmaceutical company is recalling specific lots of Sapropterin Dihydrochloride Powder for Oral Solution 100 mg at the consumer level because of powder discoloration in some packets, which has resulted in reduced potency. The problem was identified during an ACCelerated stability test and was also reported by customers. The diminished effectiveness of the product could lead to increased Phe levels in patients. Persistently high Phe levels in infants and children can result in permanent neurocognitive deficits, including irreversible intellectual disability, developmental delay, and seizures.

Hindustan Unilever: HUL is anticipated to report subdued earnings growth for Q4FY24, with the results due to be announced on April 24. The company is projected to report a revenue growth of 1.16%, amounting to ₹15,067 crore in Q4FY24, up from ₹14,893 crore in the same period last year, according to the average estimates of five brokerages. The company’s volume growth for the quarter is expected to be around 3%. HUL’s net profit for the quarter ending March 2024 is projected to increase by 2.71% to ₹2,538 crore, up from ₹2,471 crore year-on-year. On the operational front, the company’s EBITDA for Q4FY24 is expected to rise by 0.60% to ₹3,492 crore, up from ₹3,471 crore year-on-year. The EBITDA margin is estimated to remain steady at 23.2% year-on-year, due to increased advertising expenditures and higher other expenses.

Lupin: The company announced on Tuesday that it has received a Establishment Inspection Report (EIR) from the US FDA for its manufacturing facility in Aurangabad. The inspection, which took place from 6 March to 15 March, resulted in the facility being classified as Voluntary Action Indicated (VAI) by the drug regulatory authority. In a separate regulatory filing, Lupin disclosed that a Board of Directors meeting is scheduled for Monday, May 6, 2024. The agenda includes reviewing and recording the audited financial results for the quarter and year ending March 31, 2024, and discussing potential dividend recommendations.

ICICI Prudential Life Insurance: The company announced a decrease in its new business margin on Tuesday due to a sustained drop in demand for high-value policies. The Value for New Business (VNB), which is the projected profit from new policies, dropped by 19.5% to ₹22.27 billion ($267 million) for the year ending March 31. This resulted in the VNB margin falling to 24.6% from 32% the previous year. The linked segment accounted for 43.2% of the overall product mix by Annualised Premium Equivalent (APE) for the year, according to ICICI Prudential. The company’s APE sales increased by 4.7% for the year. The insurer reported a net premium income growth of 17% to ₹147.88 billion for the three months ending March 31. However, the company’s profit after tax for the fourth quarter decreased by 26% to ₹1.74 billion from the previous year.

RIL, Amara Raja, JSW Energy: The Ministry of Heavy Industries has reported receiving seven bids for the Production Linked Incentives (PLI) scheme, which aims to manufacture 10 GWh (gigawatt-hour) Advanced Chemistry Cells (ACC). The government’s press statement highlighted the overwhelming industry response, as the bids received are seven times the manufacturing capacity to be awarded. The tender attracted bids from Amara Raja Advanced Cell Tech, Reliance Industries, JSW Neo Energy, Lucas TVS, Waaree Energies, ACME Cleantech Solutions, and Anvi Power Industries. These companies collectively bid for a total capacity of 70 GWh. Earlier in January, MHI had issued a Request for Proposal to shortlist and select bidders under the PLI Scheme for setting up ACC Manufacturing Units. The scheme proposed a total manufacturing capacity of 10 Giga Watt Hour (GWh) with a budget allocation of ₹3,620 crore.

Tata Elxsi: On Tuesday, April 23, Tata Elxsi reported a 4.6% decrease in net profit for Q4FY24, falling to ₹197 crore from ₹206.4 crore in Q3FY24. The company’s operational revenue for the quarter also saw a slight decrease of 1%, dropping to ₹906 crore from ₹914.2 crore in the December quarter. The company’s revenue from operations rose by 13% YoY to ₹3,552 crore. On an operational basis, the company’s EBITDA for the March quarter was ₹233.7 crore, a 4.5% decrease from ₹244.7 crore in the December quarter. However, the EBIT margin increased to 25.8%, up from 26.8% in the preceding quarter. The EBITDA margin was at 29.5%, and the PBT margin was at 28.5%. The Profit before Tax (PBT) grew by 11.9% to ₹1048.7 crore, crossing the ₹1,000 crore-mark for the first time in a full year, subject to shareholders’ approval.

Larsen & Toubro: L&T announced on Tuesday that it has produced a hydrotreating reactor for the Antonio Dovali Jaime Refinery in Salina Cruz, Mexico. The reactor was shipped to Mexico from L&T’s A M Naik Heavy Engineering Complex located in Hazira, Gujarat. The hydrotreating reactor, which incorporates crucial Cr-Mo-V metallurgy, is based on a technology pioneered by Axens, a company based in France. Remarkably, the reactor was manufactured at the Hazira Complex in a record time of 15 months. The reactor employs a hydrotreating process, a type of catalytic conversion used in petroleum refining. This process is particularly effective in eliminating impurities like nitrogen and sulphur compounds from hydrocarbon streams.

MCX: After two consecutive quarters of losses, the Multi Commodity Exchange of India Limited (MCX) reported a net profit of ₹87.8 crore for the January-March quarter of FY24. The commodity derivatives market segment exchange saw a 35% YoY increase in its revenue, reaching ₹181.1 crore. Despite a yearly increase in its revenue, the exchange experienced a 5.42% sequential decrease in its revenue, falling from ₹191.53 crore in the December quarter. For FY24, MCX reported a significant 44.2% decrease in its net profit, dropping to ₹148.97 crore from the previous fiscal year. On Tuesday, the company also declared a final dividend of ₹7.64 per equity share for FY24.

IIFL Finance: The company has announced the commencement of a special audit, as directed by the banking regulator RBI, on April 23, in an exchanges filing. The company has put a hold on the issuance of new gold loans until the audit is satisfactorily completed. This action is a part of the Reserve Bank of India’s (RBI) supervisory measures due to concerns about certain loan disbursement practices. IIFL Finance has stated that it is fully cooperating with the special audit team.

Tata Power: Juniper Green Energy announced on Tuesday that it has entered into a contract with Tata Power to develop an 85 megawatt hybrid power project in Maharashtra. This project marks the company’s first venture into wind-solar energy, harnessing both wind and solar resources by integrating 51 MW of wind energy and 34 MW of solar power. The company has signed a power purchase agreement (PPA) with Tata Power for this 85 MW hybrid power project in Maharashtra. The project is estimated to produce a total of 215 million units (MUs) of electricity annually, thereby facilitating the power supply to approximately 42,753 households.

Cyient DLM: The company reported a significant 23.3% QoQ increase in its consolidated net profit, reaching ₹22.7 crore in Q4FY24, up from ₹18.4 crore in the December quarter of the same fiscal year. The company also saw an impressive 80.7% YoY increase in its net profit in the quarter, from ₹12.6 crore in the corresponding period last year. The company’s revenue rose 12.7% sequentially to ₹362 crores, compared to ₹321 crore in the previous quarter. On a yearly basis, the total consolidated revenue saw a 30.5% increase from ₹277.4 crore. For FY24, Cyient DLM’s profit after tax (PAT) saw a substantial increase of 92.9%, reaching ₹61.2 crore, compared to ₹31.7 crore in the previous fiscal year. The company’s FY24 revenue stood at ₹1,192 crores, marking a YoY growth of 43.2%. Additionally, it reported an FY24 EBITDA of ₹111 crores, with a margin of 9.3% and a YoY growth of 26.5%.

Gokaldas Exports: Gokaldas Exports announced on Tuesday that it has greenlit a qualified institutional placement (QIP) offering at an issue price of ₹775 per equity share. The decision was taken during a meeting of the company’s Fund Raise Committee on April 23, 2024. The QIP, which commenced on April 18, attracted substantial interest from eligible qualified institutional buyers. The approved issue price of ₹775 per equity share incorporates a premium of ₹770 per equity share. This price takes into account a discount of 1.90% (equivalent to ₹14.99 per equity share) on the floor price of ₹789.99 per equity share, as stated by Gokaldas Exports.

Nelco: On Tuesday, Nelco Ltd, a satellite services company under the Tata Group, announced a 7% YoY rise in net profit, amounting to ₹6.1 crore for the fourth quarter ending March 31, 2024. This is an increase from the ₹5.7 crore net profit reported in the same quarter of the previous year, as per the company’s regulatory filing. The company’s operational revenue saw a slight decrease of 0.5%, dropping to ₹81.6 crore from ₹82 crore in the corresponding period of the previous fiscal year. At the operational level, the company’s EBITDA saw a 12.5% increase, rising to ₹14.7 crore in the fourth quarter of this fiscal year from ₹16.8 crore in the same period of the previous year. The EBITDA margin for the reporting quarter was 18%, compared to 20.5% in the corresponding period of the previous fiscal year. The board of directors has proposed a final dividend of ₹2.

Rama Steel Tubes: The company announced on Tuesday, April 23, its decision to raise ₹500 crore via a subsequent public offer. This decision was made following the approval from its board of directors in a meeting conducted on April 22, 2024. The planned fundraising is contingent upon the consent of shareholders and the acquisition of necessary regulatory approvals. The funds will be raised through the issuance of additional equity shares, as stated in a filing to the stock exchange.