Union bank

Fourth Quarter 2022 Results Impact: Nykaa, PB Fintech, City Union Bank, Oil India and 3 others up to 10% share price increase; brokers see up to 61% upside

Shares of Aarti Industries, Astral Limited, Info Edge (India), FSN E-Commerce Ventures (Nykaa), PB Fintech (Policy Bazaar), City Union Bank and Oil India Limited jumped 10% on intraday trading in the BSE On Monday.

This was thanks to the good results of the March quarter. The aforementioned companies released their fourth quarter results for FY22 mostly over the weekend, with the majority showing year-over-year growth in revenue and also improving their margins in the March quarter.

Individually, City Union Bank was the biggest gainer and shares rose almost 10% to Rs 139.2 per share on an intraday basis. It was followed by Aarti Industries, whose shares rose 7% and traded at Rs 820 per share on BSE.

While Info Edge and Nykaa each gained around 4.5 and 5.5% at Rs 3,863 and Rs 1,425 per share on the intraday BSE.

Even shares of state-owned oil exploration company Oil India gained 5% intraday on BSE to hit the day’s high of 229 rupees per share. Similarly, shares of Astral and PB Fintech are up around 2% intraday each to Rs 1,728 and Rs 700 per share, respectively, on BSE.

City Union Bank’s relatively better days are ahead, but stock remains weak at YES Securities’, a nationwide brokerage firm, in the pecking order. He said recoveries were healthy for the quarter and management was looking for an improvement in the gross slippage rate for FY23.

While Net Interest Margin (NIM) was broadly flat sequentially and management was guided for greater stability in NIM and now guiding loan growth around low to mid-double digits for FY23 , said YES Securities retaining an Add rating with a target of Rs 145 each (up 14 percent).

Meanwhile, for Oil India, ICICI Securities believes consolidated earnings may have peaked in the near term, with its estimates for FY23-24E factoring in some moderation in GRMs from NRL (Numaligarh Refinery Limited) (margins refinery crudes and Brent crude prices of $85 per barrel.

Even so, steady production growth, upside risk on price, GRM estimates and attractive valuations make Oil India’s risk-reward ratio compelling at current levels, ICICI Securities said resetting a hedge of buy with a target price of 350 rupees per share (61% upside).

For PB Fintech, ICICI Securities said that in addition to growing the core business and increasing renewal share, the now offline channel will also contribute to contribution margins, brand strength, cash balance and experienced management establish a well-woven history in the insurance intermediary space.

ICICI Securities maintained a buy rating with a target price of Rs 940 per share (up 37%). Rising cash burn and marketing expenses along with unfavorable regulatory changes pose major risks to the brokerage’s case.

Kotak Institutional Equities cut Nykaa’s FY23-24 revenue forecast by 7-8% due to lower client additions. This results in an EPS reduction of 13-21% for FY23-24E and a revised target price of Rs1,870 from Rs2,100 per share earlier (up 38%) with a buy rating,

Nykaa is well positioned to benefit from increased BPC spending online and is also looking to generate value from adjacencies such as B2B distribution, the national brokerage said in its report.