The three stocks that have climbed by more than 100% in a year are Mahindra Lifespace Developers Ltd, Persistent Systems, and KPR Mill Ltd. In one year, Mahindra Lifespace Developers has returned over 129 per cent, Persistent Systems has returned 101 per cent, and KPR Mill has returned over 116 per cent. Following the Q4 results, brokerage firms expect additional potential in the stocks and have given a buy recommendation.
Mahindra Lifespace Developers Ltd
Sharekhan has said that "Mahindra Lifespace Developers Limited (MLDL) reported healthy residential sales of Rs. 328 crore (up 31% q-o-q, down 5% y-o-y), collections of Rs. 308 crore (up 21% y-o-y, down 34% q-o-q) and Industrial Cities & Industrial Clusters (IC&IC) lease of Rs. 70.5 crore (up 7% y-o-y, down 49% q-o-q) for Q4FY2022. In accounting terms, the company reported consolidated income of Rs. 162 crore (up 3x y-o-y), an operating loss of Rs. 35.7 crore and net profit of Rs. 138 crore (led by Rs. 97 crore impairment reversal for Luminaire project and deferred tax credit of Rs. 65 crore). The company finalised four land acquisitions having development potential of 5.1 msf with estimated gross development value (GDV) of Rs. 5,500 crore during FY2022 till date. The management is hopeful of maintaining GDV addition in FY2023 as achieved in FY2022 (Rs. 3800 crore). The company has forthcoming project pipeline of 6.72 msf including future phases of ongoing projects (2.85msf) and new projects (3.87 msf)."
"MLDL has been able to execute strong JD agreements and is further expected to maintain the momentum. It is poised to scale up its sales and execution with a strong management team at the helm of having credible experience in their respective fields. Further, the company is expected to benefit from the government's relentless focus on affordable housing segments, rising affordability levels, favourable state government policies for real estate and ample inorganic growth opportunities. The company's low gearing can be utilised to raise debt to fund land acquisitions. Hence, we retain a Buy on the stock with a revised PT of Rs. 450 factoring a higher sales run-rate," the brokerage has claimed.
Persistent Systems (PSYS)
The brokerage firm Anand Rathi has highlighted that "PSYS continues to deliver industry-leading growth (9% q/q org. in Services, surprising positively. It integrated Data Glove for a month (MediaAgility to be integrated from Q1) and had some IP revenue reclassified as services. In margins, it benefited from better realisations and onsite utilisation, leading to a flattish gross margin. SG&A leverage was offset by higher D&A, leading to a 14% EBIT margin, flattish q/q. Ahead, we expect 14%-14.5% margins, despite higher amortisation, on expecting EBITDA margin expansion."
"We raise our estimates 9-15%, following the strong Q4 FY22 performance and given its ability to get TCV growth going. The multiple is a slight discount to Mindtree on account of the latter's better FCF profile. We upgrade our recommendation to a Buy. Risk: M&A-integration related," the brokerage has stated.
KPR Mill Ltd
As per the brokerage company, Sharekhan "KPR Mill (KPR) posted yet another quarter of strong revenue performance. Q4FY2022 revenue grew by 30% y-o-y to Rs. 1,449.9 crore, driven by 34% y-o-y growth in the textile business and 13% y-o-y growth in the sugar business. Yarn and fabric and garment divisions registered y-o-y revenue growth of 16% and 57%, respectively. The garment division's sales volume stood at 38 million pieces in Q4FY2022 compared to 28 million pieces in Q3. Margins were impacted by higher cotton prices, which led to a 148 bps y-o-y decline in gross margin and a 150 bps y-o-y decline in EBITDA margin. Yarn and fabric and garment division's EBITDA margin stood at 18% and 25%, respectively. For FY2022, KPR's revenue and PAT grew by 37% and 63% y-o-y, respectively, with EBITDA margin improving by 177 bps to 25.3%, led by better mix. The company's liquid cash on books stood at around Rs. 440 crore, which can be utilised for its future capex programme in the coming years."
"KPR's textile business is expected to maintain the strong double-digit growth momentum with increased garmenting capacity, improving sales of high-value yarn/fabrics products, and better growth prospects in export markets backed by government reforms. We expect KPR's revenue and PAT to report a CAGR of 20% and 21%, respectively, over FY2022-FY2024 with most of the new capacities operating at optimum utilisation. Further, the company is likely to create value for shareholders by demerging its sugar business into a separate entity once it attains a certain scale. The stock currently trades at 22.1x/18.1x its FY2023E/FY2024E EPS and 14.4x/11.8x its FY2023E/FY2024E EV/EBITDA. We maintain our Buy recommendation on the stock with an unchanged price target (PT) of Rs. 810," Sharekhan has claimed.
The stocks have been picked from the brokerage report of the above-said brokerage companies. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.