Stocks to Watch: Tech Mahindra, HCLTech, Indigo, Tata Steel, ICICI Bank, Vedanta

Tech Mahindra: On Thursday, April 25, Tech Mahindra reported a 41% drop in its consolidated net profit in Q4FY24, which stood at ₹661 crore. The company's revenue from operations also fell 6.2% to ₹12,871.3 crore in the fourth quarter compared to the previous year. In comparison to ₹1,117.7 crore in the corresponding period last year, Tech Mahindra's net profit for the March quarter plummeted by 41%. The company's revenue also experienced a 6.3% decrease in the fourth quarter, amounting to ₹13,718 crore compared to the same period last year. For FY24, the consolidated net profit decreased 51.2% YoY, amounting to ₹2,358 crore. The company's revenue for FY24 was ₹51,996 crore, marking a 2.4% decline from the previous fiscal year. The board of the company proposed a final dividend of 560%, which equates to ₹28 per equity share with a face value of ₹5 each.

IndiGo: IndiGo has made its foray into the long-haul market by placing an order for 30 wide-body aircraft. The order comprises 30 Airbus A350-900 aircraft, which will be equipped with Rolls Royce’s Trent XWB engines. This new order marks IndiGo's entry into the wide-body aircraft category, a segment previously occupied by Air India and Vistara. At present, IndiGo operates a fleet of over 360 aircraft. In June 2023, the airline placed a substantial order for 500 aircraft with Airbus at the Paris air show. As a result, the airline's total order book now stands at around 1,000 aircraft, including Airbus 320, 321, and 321XLRs. As reported by Mint in November, IndiGo has been in discussions with aircraft manufacturers to purchase up to 20 wide-body aircraft as part of its strategy to expand its international operations.

HCL Technologies: The company is anticipated to announce its Q4 results for the fiscal year 2023-24 on April 26, with expectations of relatively unchanged revenues on a quarter-on-quarter (QoQ) basis. The company's products and platforms (P&P) business is predicted to negatively impact its earnings, despite the potential cushioning effect of the services business. The decline in the profitable P&P segment is also likely to affect HCLTech's net profit for the fourth quarter. According to the average forecast of seven brokerages, HCL Technologies is projected to report a net profit of ₹4,054.71 crore in Q4 FY24, marking a 6.78% decrease QoQ. The company's revenues are expected to slightly increase by 0.37% QoQ, reaching ₹28,552.64 crore. However, its EBIT margin is predicted to drop by 152 basis points (bps) QoQ, settling at 18.18%.

Tata Steel: The company announced on Thursday that it has successfully negotiated a formal agreement with UK trade unions that clears the path for a £1.25 billion electric arc furnace project at the company's Port Talbot plant, which will replace two outdated blast furnaces. Securing the support of the trade unions was a critical step before the steelmaker could move forward with its plans. Reports from British media suggest that this plan could result in as many as 2,800 job losses. This agreement was reached after Tata Steel turned down a union proposal to keep one of the blast furnaces operational at the plant in an effort to preserve jobs, reported The Guardian. The company stated in a press release on Thursday that maintaining one blast furnace during the transition would have led to at least £1.6 billion in extra costs, posed operational and safety risks, and jeopardized the future stability of the business.

IndusInd Bank: On Thursday, April 25, IndusInd Bank announced a 15% increase in net profit to ₹2,349 crore for the January-March quarter of the 2023-24 fiscal year. This figure surpassed the analysts' predictions, which had anticipated a profit of ₹2,322.7 crore. The bank's net interest income (NII) rose by 13.9% to ₹5,376.4 crore, up from ₹4,669.5 crore in the same quarter of the previous fiscal year. IndusInd Bank's performance was boosted by an 18% increase in net loans, which outstripped the 14% growth in deposits. The gross non-performing asset (NPA) ratio was reported at 1.92%, a decrease from the 1.98% recorded in the same quarter last year. Similarly, the net NPA ratio improved to 0.57%, down from 0.59% on a year-on-year basis. Operating expenses for the quarter ending March 31, 2024, rose by 24% to ₹3,803 crore, compared to ₹3,066 crore for the same quarter of the previous year. Additionally, IndusInd Bank declared a dividend of ₹16.50 per equity share with a face value of ₹10.

Nestle India: The FMCG company announced on Thursday a 27% YoY increase in net profit for the quarter ending in March, amounting to ₹934 crore. This figure surpassed the market's prediction of ₹847 crore. The company's board has proposed a final dividend of ₹8.5 per share for the 2023-24 fiscal year. The company's revenue from operations for the January-March quarter rose by 9% to ₹5,268 crore, compared to ₹4,830 crore reported in the same period last year. Nestle India's domestic sales exceeded the ₹5,000 crore mark this quarter, and the company also announced the launch of the highly anticipated NESPRESSO in India. Furthermore, Nestle is entering into a definitive agreement to establish a joint venture with Dr Reddy’s Laboratories to deliver science-backed nutritional solutions to more consumers across the country by leveraging Dr Reddy’s retail and distribution network. The joint venture company will be majority-owned by Dr Reddy’s with a 51% stake, while Nestle India will hold the remaining 49%.

ICICI Bank: On April 24, a number of ICICI Bank credit card holders voiced their concerns on social media, stating that they could see other customers' ICICI Bank credit cards on their iMobile Pay app. The full card number, expiry date, and CVV were all visible on the app, making it possible for someone to alter the security settings and misuse another person's credit card for international transactions. An ICICI Bank spokesperson attributed the glitch to 17,000 new credit cards that were recently issued and mistakenly mapped to incorrect users. The spokesperson added that the affected credit cards made up about 0.1 percent of the bank’s credit card portfolio, and no instances of card misuse from this set were reported. As a swift response, ICICI Bank blocked these cards and is in the process of issuing new ones to the customers.

Kotak Mahindra Bank: Ashok Vaswani, the Chief Executive Officer of Kotak Mahindra Bank, stated in an email to his employees that the surge in business via digital channels has necessitated a new level of technology infrastructure. This statement followed the Reserve Bank of India's decision to prohibit the private sector bank from adding new customers via its online portal and mobile app, and from issuing new credit cards due to significant deficiencies in the bank's IT system. Vaswani assured in the email, reviewed by Mint, that they are actively working on building the required technology infrastructure and will promptly address all the issues raised by the RBI.

Cyient: On Thursday, April 25, Cyient announced a 28.5% QoQ rise in net profit, reaching ₹196.9 crore for the fourth quarter ending March 31, 2024. The company had previously reported a net profit of ₹153.2 crore in the December quarter. The company's operational revenue saw a modest increase of 2.2%, from ₹1,821.4 crore in the third quarter to ₹1,860.8 crore in the March quarter. Earnings before interest and taxes (EBIT) also rose by 3.1% to ₹268.1 crore in the fourth quarter, compared to ₹260 crore in the previous quarter. However, the EBIT margin decreased from 21.5% in the previous quarter to 16.9% in the reporting quarter. For the fiscal year 2024, the Cyient Group reported a revenue of $863 million, marking a year-on-year growth of 15.6%. The EBIT stood at 14.5%, and the profit after tax (PAT) was ₹735 crore, a substantial 30% increase from FY23. The free cash flow (FCF) also increased by 32.6% to ₹648 crore.

Vedanta: The company experienced a significant drop in profits for the March quarter compared to the previous year. This decrease was attributed to lower commodity prices, increased borrowing costs, and certain exceptional charges. The company's profit, which amounted to ₹1,369 crore, was down by 27% compared to the previous year. The lower prices of metals such as aluminium and zinc during the quarter led to a 6% YoY decrease in the company's top line, which stood at ₹34,937 crore. The company's EBITDA also saw a similar decrease, amounting to ₹8,196 crore. The EBITDA margin remained relatively stable at 23.5%, dipping by just 6 basis points compared to the same period last year. Vedanta's borrowing cost for the quarter was ₹2,415 crore, a 34% increase that negatively impacted its bottom line. This increase occurred after the company's net debt rose to ₹56,338 crore as of 31 March, up from ₹45,260 crore a year ago. However, Vedanta managed to reduce its net debt by ₹6,155 crore during the January-March quarter, despite its