Stocks to Watch: HDFC Bank Leads; Pharma, Infra Focus

HDFC Bank

Quarterly results by HDFC Bank show strong consistency, as net profits were up by 9.1% year-on-year to ₹19,221 crore from ₹17,616 crore. Net Interest Income (NII) increased by 3.2% to ₹33,081.6 crore. One of the major positives in this quarter was a reduction in provisions of 18.3%. This was a reflection of the soundness of the asset quality as well as improvement in the stress on the balance sheet. Gross NPA stood at 1.15% and Net NPA at 0.38%.

ICICI Bank

The bank has performed well for the quarter ending December 2018, with the profit after tax rising by 8.5% to ₹13,701.7 crore. The Net Interest Income (NII) of the bank grew 8.4% Year-on-Year (YoY) to ₹22,979 crore, showing that the bank has been growing well in terms of loan growth and stable margins compared to its peers. A drastic reduction in provisions to ₹96.2 crore from ₹890.7 crore helped increase profitability.

Yes Bank

Yes Bank was one of the top performers with a profit growth of 44.7% YoY to ₹1,068 crore. The bank's net interest income grew by 15.9%, aided by the growth in lending. Provisioning fell sharply by 41%. Asset quality parameters showed marked improvements with GNPA and NNPA ratios standing at 1.3% and 0.2%, respectively.

Jio Financial Services

Jio Financial Services has delivered a mixed performance for the quarter, where its revenues grew by a whopping 106.5% to ₹1,018.5 crore year on year, while its net profits fell by 13.9% to ₹272.2 crore. Jio Financial has declared dividends of ₹0.60 per share. Although Jio is witnessing strong top line growth, profitability worries could make the market wary of investing in the company.

H G Infra Engineering

The company was able to build up its project pipeline through the introduction of its wholly-owned subsidiary in relation to a highway project worth ₹1,582 crore in Odisha, which was given by NHAI. The said project, being undertaken using the Hybrid Annuity Model, provides better visibility for future income sources.

EMS Limited

The EMS company managed to get a big push after winning a bid to undertake two projects valued at ₹208.59 crores by the UP Jal Nigam Company. This marks how well positioned the company is in such projects.

Lupin Limited

There have been three observations made on Lupin by USFDA through Form 483 after inspecting its New Jersey plant. Although not serious, these observations would mean that the stock would remain on watch for some time.

Cipla Limited

Form 483 observations were also recorded by the USFDA for Cipla following inspections at its plant in Goa. While these are a regular part of business, they do carry significance in terms of regulatory compliance.

Aurobindo Pharma

Aurobindo Pharma was able to gain final approval from the USFDA for one of their cough drugs (Dextromethorphan Polistirex). This will add to their growing number of products in the US generic drugs market.

Amagi Media Labs

Amagi Media Labs has entered into a strategic partnership with Matrox ORIGIN in order to harness cloud-based production capabilities. The objective is to enhance content workflows and consolidate their position within the realm of media technologies.

Zee Entertainment Enterprises

An investment worth up to Rs 116 crores was sanctioned by Zee Entertainment for Phantom Digital Effects, which indicated that it had begun focusing on its digital content and visual effects.

eMudhra

The company introduced its product emSigner for SMEs that will help in digitizing the entire process of document management. This is an initiative that reflects the rising adoption of digital technology among SMEs.

Lemon Tree Hotels

Lemon Tree Hotels made a move in line with their strategy of expanding via their asset-light business model, as the firm inked an agreement to open a new hotel with 90 rooms in Gujarat.

Trent Limited

In Trent Limited, the key trigger points include the coming board meeting, scheduled for April 22, which includes decisions on issuing bonus shares, raising funds, and release of financial performance details.

Uno Minda

The firm has recently appointed a new CEO for the Lighting & Power Solutions (LPS) vertical of the company. While it is unlikely to have any impact from an operational standpoint, a change at the top management level could indicate a shift in the company’s strategic focus.

Krsnaa Diagnostics

There was a change in management at Krsnaa Diagnostics when they appointed an interim CFO and one of their whole-time directors resigned. Changes like this can generally be considered neutral in nature, although they might affect the governance perception.

Dredging Corporation of India

The company inked a ₹2,157 crore MOU with IOCL for supply of fuel for five years. It would ensure that costs remain stable and the operations continue in an efficient manner.

Bharat Heavy Electricals Limited

There were contrasting events at BHEL such as the revocation of Letter of Intent in a thermal power project along with a claim for recovery of ₹143 crore.