Nov 28 2023, 06:37
5 fundamentally strong companies that can generate above-average:
The following are the five companies covered by a decent number of analysts and currently offering a double-digit share price potential.
The margin benefits to India Inc. are expected to moderate in the forthcoming quarters as some of the commodity prices have started reversing. After falling by over 28% between June 2022 and May 2023, the benchmark, Bloomberg Commodity Index, has gained over 4% in the past six months. In the third quarter of 2023-24 so far, the index has gained 3.2%.
While the Brent crude price has come down by 10% since the start of the third quarter of 2023-24, the natural gas (LNG) prices, as measured using the Japan Korea Marker, have jumped by 19%. The prices of commodities like zinc, tin and iron ore have risen by 3.5%, 4.7% and 12.6%, respectively.
While the Brent crude price has come down by 10% since the start of the third quarter of 2023-24, the natural gas (LNG) prices, as measured using the Japan Korea Marker, have jumped by 19%. The prices of commodities like zinc, tin and iron ore have risen by 3.5%, 4.7% and 12.6%, respectively, in the third quarter so far (data compiled from Reuters- Refinitiv database).
In addition to the commodity price concerns, the lack of broad-based consumption growth and continuing weakness in rural demand could strain the performance in the near term. "The margin tailwind will moderate in the second half of 2023-24 due to the base effect and an increase in certain commodity prices," states a recent Motilal Oswal report.
A Care Edge Foresights report for November 2023 has expressed concern about the broad-based consumption recovery as poor monsoon has jeopardised the rural consumption restoration. The poor agricultural production, resulting from deficient monsoon, could lead to higher inflation in basic food items. The subsidy burden on the government is also rising, which is expected to put pressure on the capex plans.
The report cautions investors about the growing uncertainties and headwinds, but also expresses confidence that India will record above 6% GDP growth in 2023-24.
VEDANTA
THE DIVERSIFIED NATURAL resources company reported a 6% yo-y growth in revenue, and a 49.1% y-o-y jump in consolidated EBITDA, in the September 2023 quarter. The EBITDA growth was aided by the favourable arbitration award relating to a contract in the Rajasthan block. The benefit of arbitration will be visible over the next few quarters in the form of lower cash outflows. Moreover, strong performance was reported across segments aided by higher volumes and lower cost of production.
source: et
Nov 29 2023, 08:11
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