RIL, Bandhan Bank, Jubilant FoodWorks hit new high

Shares of Reliance Industries (RIL), Bandhan Bank, Jubilant FoodWorks, Bajaj Finance, Bajaj Finserv, HEG and 3M India have hit their respective all-time highs on the BSE in intra-day trade on Friday.

Bandhan Bank has soared 10% to Rs 679, extending its past three days 11% rise on the BSE, after the bank reported a strong 47.5% year on year (yoy) growth in net profit at Rs 4.82 billion in June quarter (Q1FY19), on back of strong operational income. The private sector lender had a profit of Rs 3.27 billion in year-ago quarter.

“Robust growth in balance sheet, elevated margins, and stable asset quality fuelled return ratios of the bank. Sustenance of higher margins at 9.5-10% and low cost to income ratio at 37-38% by FY20E is seen enabling earnings growth at 39.3% CAGR in FY18-20E. Consequently, expect high RoA of 3.5-4%, RoE >20% to sustain and continue to trade at a premium to HDFC Bank,” analysts at ICICI Securities said in result update. The brokerage firm maintains ‘buy’ rating on the stock with 12-month target price of Rs 700 per share.

Bajaj Finance (up 9% at Rs 2,745) and (Bajaj Finserv up 7.4% at Rs 6,776) have rallied up to 9% after reporting a strong set of numbers for Q1FY19.

After a strong close in FY18, Bajaj Finance started FY19 with a bang as it reported 35% AUM (assets under management) growth and 60% pre-provisioning profit growth on year on year (YoY). The company reported an 81% YoY jump in consolidated net profit at Rs 8.36 billion in the June quarter, helped by better-operating expenses and increase in fee income. The company had posted a net profit of Rs 4.61 billion in the same quarter last year.

“After dominating the mass affluent space, Bajaj Finance is now on its way to becoming a diversified NBFC with big plans in the mortgage space. We expect 29% loan book the compound annual growth rate (CAGR) over FY18-20E, margins around 11% and average credit costs at 130bps to drive earnings CAGR at 36%,”analysts at Antique Stock Broking said in result review.

RIL too hit a new high of Rs 1,138, up 3% on the BSE.  Since July 5, in past 11 trading sessions, the stock surged 18% from Rs 965, after Mukesh Ambani, Chairman and Managing Director in the Annual General Body Meeting (AGM) held on July 5, 2018 launched ultra high speed fixed line broadband services for homes and enterprises under the brand of JioGigaFiber. In comparison, the S&P BSE Sensex was up 2.6% during the same period.

Jubilant FoodWorks was up 6% to Rs 1,495 in intra-day trade ahead of Q1FY19 results next week. The company scheduled to announce its first quarter results on Wednesday, July 25, 2018. In past one year, the stock rallied 128% against 14.5% rise in the benchmark index.

“For Jubilant FoodWorks, we expect sales to increase 21.5% YoY, with same-store- sales (SSS) up 18% YoY in 1QFY19. Base quarter 1QFY18 had witnessed 6.5% growth in SSS. Thus, a favourable base and initiatives undertaken by the company should result in high SSS growth,” Motilal Oswal Securities said in results preview.

The recent Football World Cup is also likely to boost sales. With SSS growth well above cost increases, margins are expected to expand sharply by 400bp YoY, resulting in a 63% YoY increase in EBITDA and more than doubling of PAT YoY, it added.

3M INDIA 22915.00 23024.80 22563.95 12-Feb-18
BAJAJ FIN. 2702.10 2744.95 2535.50 19-Jul-18
BAJAJ FINSERV 6630.00 6776.35 6428.00 18-Jul-18
BANDHAN BANK 671.50 678.60 632.40 19-Jul-18
HEG 4120.00 4145.00 4091.00 18-Jul-18
JUBILANT FOOD. 1482.85 1494.95 1443.75 16-Jul-18
RELIANCE INDS. 1133.00 1138.25 1114.00 19-Jul-18

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