BSE Midcap index hits 52-wk high; AU Small, ICICI Securities at new highs

Illustration by Ajay Mohanty
Shares of midcap companies continued their upward journey on Friday with the S&P BSE Midcap index hitting a fresh 52-week high today on the back of a strong rally in consumption driven stocks.

At 02:27 pm, the S&P BSE Midcap index was up 1 per cent at 15,855 points, as compared to a 0.7 per cent rise in the S&P BSE Sensex and S&P BSE Smallcap index.

AU Small Finance Bank, ICICI Securities and Indraprastha Gas (IGL) from the midcap index hit their respective all-time highs in the intra-day trade today. While, Amara Raja Batteries, MRF, Page Industries, Tata Chemicals, Torrent Power and Voltas touched their 52-week highs.

Among the individual stocks, AU Small Finance moved higher by 12 per cent to Rs 1,089 after it delivered stellar performance in the December quarter (Q3FY20), with an improving trend across key metrics (AUM growth, NIMs, opex & asset quality). The stock of the private sector lender has rallied 23 per cent in the past two trading days.

Brokerage firm Motilal Oswal Securities believes that the growth/profitability outlook remains strong as the bank benefits from its long retail expertise of NBFC performance and benefits from strong built up of liability franchise. This will, further, drive improvement in return ratios.

“AU Small Finance Bank is swiftly increasing its focus toward high-yielding segments and capitalizing on under-penetrated opportunities in the MSME segment, thereby sustaining healthy growth momentum. The bank has been making adequate investments to support business growth (100 new branches and 2,736 employees added in the past one year), which will enable it to continually gain share in chosen business segments,” the brokerage firm said in its result update. It maintains ‘buy’ rating on the stock with a target price of Rs 1,100 per share.

Meanwhile, ICICI Securities hit a new high of Rs 484, up 9 per cent on the BSE, and surpassing its previous high of Rs 452 touched on December 30, 2019. The stock has soared 14 per cent in the past four trading days after the company reported a 36 per cent year on year (YoY) growth in the consolidated net profit at Rs 137 crore in Q3FY20. The growth in net profit was on account of growth in revenue, reduction in expenses, and changes in statutory tax rates. Consolidated revenue was up 4 per cent YoY at Rs 423 crore aided by growth in retail equities & allied business.

“Given the sharp rally, stock trades at 20x FY22e. While near term upside looks limited, the intense consolidation in broking industry coupled with ICICI Securities multi-dimensional strategy of acquiring more customers and selling more products per customer could reducing business cyclicality and open up long runway for growth,” analysts at Antique Stock Broking said in a result review. 

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