SRF, DCB Bank,Titan, Merck hit record highs on strong March qtr performance

SRF was up 5.5 per cent to Rs 2,744, surging 18 per cent from Tuesday's low, after the company reported 54 per cent YoY jumped in consolidated net profit at Rs 191 crore in March quarter of FY19.

March quarter earnings for most companies have been a mixed bag so far. Among these, however, SRF, DCB Bank, Titan Company and Merck are some of the companies on the S&P BSE 500 index, which hit their respective record high on Wednesday. All of them reported a strong earning in the recently concluded quarter for FY19. DCM Shriram from the index hit 52-week high on good results for the quarter.

Shares of SRF were up 5.5 per cent to Rs 2,744 apiece during the intra-day trade today, surging 18 per cent from Tuesday’s low. The company reported 54 per cent year-on-year (y-o-y) jump in consolidated net profit at Rs 191 crore during Q4FY19 on the back of healthy revenue growth. The consolidated revenue grew 29 per cent to Rs 2,072 crore on y-o-y basis.

The company’s EBITDA (earnings before interest, tax, depreciation and amortization) margin improved to 19.6 per cent, up 185 basis points (bps) on y-o-y basis.

"As key capital expenditure (capex) would be largely over by FY20, improved utilisation levels would help in higher asset turnover as well as debt reduction. This augurs well for improved margin profile and higher return ratio," Sharekhan brokerage said in client note.

Similarly, DCM Shriram rallied 6 per cent intra-day to Rs 529 apeice, surging 22 per cent in two weeks. The firm reported a six-fold jump in the consolidated net profit at Rs 293 crore in the March quarter. It had posted a profit of Rs 51 crore during the same quarter last year.

The management attributed the strong performance to its chemical business - accounting 36 per cent of total revenue - which continues to record strong performance with continuous volumes growth and steady margins.

Merck, too, hit a new high of Rs 4,139 per share, up 3 per cent intra-day, gaining 12 per cent in past four trading days. The pharmaceutical company’s profit after tax rose 79 per cent to Rs 40.7 crore in March quarter driven by high interest income and operational efficiencies. It had a profit of Rs 22.7 crore in the year-ago quarter.

Strong revenue growth driven by a strong performance across brands, growth in exports, higher interest income and improved execution helped the pharma major to register a growth of 22.2 per cent in total revenue. It was Rs 249 crore in Q1CY19 against Rs 204 crore Q1CY18.

Shares of Titan Company also hit a record high of Rs 1,167 apiece during the early morning trade after the company’s jewellery business reported robust 21.1 per cent revenue.

The company has gained 7 per cent in past one week due to grammage growth of 15 per cent during the quarter.

“We sensed significant enthusiasm and resolve by the team at the Investor Meet to deliver strong revenue growth in FY20 led by 22 per cent growth targeted for the jewelry division. Accelerated pace of store expansion (71 new stores in FY20), sustained innovation, scale up of wedding/high-value products, rising contribution from Exchange scheme and better in-store operations (cross/up sell) are key drivers for growing jewellery revenue by 2.5x by FY23E,” analysts at JP Morgan said in investor meet takeaways. 

The brokerage firm maintains ‘overweight’ rating on the stock with March 2020 target price of Rs 1,200.