25 firms that doubled profit in Q3 see their stocks take leap of faith

NEW DELHI: As the domestic economy showed signs of strong revival from a technical recession, many Indian companies reported doubling of profits year on year in the December quarter, sending their stocks soaring.

The strong earnings reflected a mix of cost optimisation measures, sharper-than-expected demand recovery and healthy operational delivery. Dalal Street investors have been quick to reward these stocks, with shares of 18 of 25 such firms beating the Sensex’s 9 per cent return for the year to date.

For this study, only those corporates were considered, which have a minimum market capitalisation of Rs 10,000 crore and quarterly profits in excess of Rs 100 crore.

The chart topper is Adani Transmission. The Adani group firm logged a profit after tax (PAT) of Rs 440 crore for December quarter, which was 157 per cent more the year-ago period’s Rs 173.44 crore, data compiled from corporate database Ace Equity showed. The stock has rallied 74 per cent so far this calendar.

Prospects for the transmission and distribution segments look promising, with Rs 40,000 crore worth of transmission tenders coming up and a potential uptick in the privatisation of discoms.

“A strong balance sheet provides room for Rs 5,000 crore capex in transmission and Rs 1,500-2,000 crore in distribution businesses annually over the next three to five years,” Edelweiss, which recently hosted the company management, said…

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From The Economic Times - 24/02/2021