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Economic Times
a day ago
- Business
- Economic Times
Stock picking: Improving operating profit could signal long-term market outperformance
Why EBITDA is a winner Live Events Significance of EBITDA margins EBITDA in a soft quarter Orient Electric The electrical equipment manufacturer specialises in home appliances, including fans, lighting and switchgears. The company has reported strong March 2025 quarter: revenue up 9% year-on-year (y-o-y), net profit up 144%. Growth was driven by the lighting and switchgears segment, on the back of distribution expansion, new products, and premium category demand. EBITDA margin expanded 390 bps y-oy, supported by cost optimisation and Project Sanchay. The fans segment is poised for market share gains via improved DTM strategy and Hyderabad plant scale-up. Centrum Broking cites DTM, premiumisation, alternate channels, and Hyderabad plant as key growth and margin drivers. Affle 3i The global technology company specialises in mobile advertising, digital consulting, and software development. In the March 2025 quarter, revenue was up 19% y-o-y, net profit up 17.8%. Growth was led by developed markets (+27.3% y-o-y); India grew nearly 15.9%. EBITDA margin up 290 bps y-o-y, driven by lower employee costs and operational gains. Management targets 20% revenue growth in 2025-26 with gradual margin improvement. Ambit Capital sees tailwinds from integrated platform, stronger processes, sales push, premiumisation, and exposure to high-growth markets and segments. Brigade Enterprises The Bangalore based real estate developer has a diversified portfolio, including residential, commercial, hospitality and retail projects. The March 2025 quarter pre-sales was up 9% y-o-y, driven by strong new launches. EBITDA was down 4% y-o-y, but margin expanded 307 bps on cost control and premium property sales. Robust launch pipeline in residential and commercial segments underpins 2025-26 growth visibility. It expects 15-20% pre-sales growth in 2025-26. Antique Stock Broking highlights geographic expansion beyond Bengaluru, strong launch pipeline, and rising rental asset occupancy as the key positives. Jupiter Life Line Hospitals The multispeciality healthcare provider offers tertiary and quaternary care across various medical specialties. In the March 2025 quarter, revenue was up 12.5% y-o-y, EBITDA up 25.7%, driven by better case mix and higher ARPOB. EBITDA margin expanded 260 bps yo-y due to cost control and operational efficiency. It is on track to reach 2,500 beds across 6 hospitals in Western India in 3-4 years. Exploring growth via acquisitions and greenfield projects. Prabhudas Lilladher expects sustained growth from expansion, rising occupancy, margin gains, and strategic moves in high-density western markets. National Aluminium The PSU company is engaged in in mining, alumina refining and aluminium smelting. In March 2025 quarter, revenue was up 47% y-o-y, EBITDA up 149%, driven by strong alumina and aluminium performance. EBITDA margin surged 2133 bps y-o-y, supported by lower costs and higher alumina realisations. Targeting 36-37% EBITDA margin in 2025-26 via volume growth and cost efficiencies. Axis Securities flags near-term EBITDA risk from falling alumina prices, but sees partial offset from strong cost control and higher alumina sales guidance. How do you pick winners when global equity markets are rocked by trade uncertainties and there is persistent weakness in domestic demand? One effective way is to closely check your company's EBITDA earnings before interest, taxes, depreciation, and amortisation) margins. In a nutshell, these are fundamentally sound companies that effectively minimise value erosion amid periods of high market is calculated by subtracting operating expenses (excluding depreciation) from the sales revenue. On the other hand, EBITDA margin is calculated by dividing EBITDA by the sales revenue. For example, a company with an EBITDA margin of 10% means that the company is generating Rs.10 as operating profit on every Rs.100 worth of sales.A study conducted by ET Wealth shows that the companies that have consistently improved EBITDA margins over the last four quarters have significantly outperformed the market benchmark in the last one year whereas the companies with consistent deterioration in EBITDA margins significantly underperformed the market analysis of 1,508 companies (excluding those in banking, finance, and insurance) reveals that 29 companies have maintained positive EBITDA margins and consistently improved them over the last four quarters. In contrast, 28 companies have shown a steady decline in EBITDA margins during the same period. The latest data pertains to the March 2025 quarter and has been sourced from the Reuters-Refinitiv the last one year, the group of 29 companies (with positive EBITDA margins) has generated an equal-weighted average return of 30.3%, whereas the group of 28 companies (with negative EBITDA margins) has generated -9.8% returns. The Nifty 500 equal-weighted index delivered 7.8% returns in the last one year. The returns are based on 30 May 2025 closing agree. 'Improving EBITDA margins increases the RoE of the business, which in turn improves the growth and profitability of the business and the stock price of the company,' says Saurabh Joshi, Head of Research, Marwadi Shares and Finance Limited (MSFL).EBITDA provides an accurate picture of the company's competitive strengths as it excludes the effect of non-cash charges (or depreciation), varying capital structures and taxes. 'EBITDA is the preferred metric for investors who want to know how a company performs at its core before financing decisions and accounting treatments cloud the picture,' says Om Ghawalkar, Market Analyst, a stock brokerage firm. A strong EBITDA indicates efficiency and the company's ability to generate suggest that investors should consider EBITDA margins over a period of time to spot good quality companies with sustainable business models and sound financial India saw a modest improvement in both revenue and EBITDA in the March 2025 quarter compared to the December 2024 on a sample size of 1,508 non-BFSI companies. Growth is year-on-year.'Consistent improvement in EBITDA margins signals superior execution, pricing power, cost control, and positive operating leverage. It reflects a company's ability to increase profits faster than expenses,' says Sonam Srivastava, Founder and Fund Manager at Wright Research PMS.'.The recent quarter performance of corporate India indicates ongoing growth challenges. Despite muted revenue growth, the operating profit growth improved relative to the December 2024 quarter, helped by cost control initiatives, operational efficiencies and input cost benefits in certain segments (see graphic).Going forward, analysts expect demand to improve, aided by rural revival, steady urban consumption, normal monsoons and increased government input costs present a mixed picture. Ghawalkar says the softer crude oil prices and the strong coal supply may ease costs for sectors like aviation and chemicals, but other sectors are likely to face pressures. While cotton MSP hikes will hit input costs in the textiles segment, rising logistics costs may squeeze margins in cement. Additionally, wage inflation in IT and healthcare is likely to keep operating costs elevated in these sectors. Here are the five companies from the group of 29 with rising EBITDA margins that have a strong analyst coverage:
Time of India
14-05-2025
- Business
- Time of India
Nippon India Small Cap Fund exits IndusInd Bank, Adani Wilmar, 3 other stocks in April
Nippon India Small Cap Fund , the largest small cap fund based on assets managed, made a complete exit from IndusInd Bank, Adani Wilmar and three other stocks in April. Around 2.24 crore shares of Adani Wilmar and around 15 lakh shares of IndusInd Bank were also sold from the portfolio. The other stocks include Affle (India), Dalmia Bharat, Western Carriers India whose 25.87 lakh, 2.73 lakh, and 6.57 lakh shares, respectively. Also Read | Largecap mutual funds gain investor interest, inflows surge by 8% in April Best MF to invest Looking for the best mutual funds to invest? Here are our recommendations. View Details » The fund added four new stocks in its portfolio which included Affle 3i, AWL Agri Business, Clean Science and Technology, and Kajaria Ceramics. Around 2.24 crore shares of AWL Agri Business, 25.87 lakh shares of Affle 3i, 22.57 lakh shares of Kajaria Ceramics, and 4.37 lakh of Clean Science and Technology were added to the portfolio. Exposure in 20 stocks was increased in April which included Ambuja Cements , Asian Paints, Axis Bank, Can Fin Homes, Dr. Reddy's Laboratories, HUL, Pfizer, Whirlpool of India. It added 32.39 lakh shares of Delhivery India taking the total shares to 53.67 lakh in April against 21.28 lakh in March. Live Events The shares of Dr. Reddy's Laboratories were increased by 10 lakh in the portfolio, followed by 10 lakh shares of Axis Bank and only 108 shares of Pfizer were added to the portfolio. Exposure in nine stocks was reduced in the similar time frame. It reduced 12.59 lakh shares of Fusion Finance, followed by 4.91 lakh shares of Paradeep Phosphates. Around 40,000 shares of Gujarat Fluorochemicals were reduced from the portfolio in April. Only 21 shares of Capital Small Finance Bank were reduced from the portfolio in the similar time period. The largest small cap fund made no change in the exposure of 195 stocks in the similar time period which included some stocks such as Zydus Wellness, Voltas, UTI AMC, RITES, RIL, RBL Bank, Raymond Lifestyles, Jindal Saw, Indigo Paints, Hitachi Energy India, HDFC Bank, and Bajaj Electricals. The small cap fund had 228 stocks in its portfolio in April against 229 stocks in March. Launched on September 16, 2010, the scheme had an AUM of Rs 58,028.59 crore as on April 30, 2025. The current investment philosophy of the fund is that the fund attempts to generate relatively better risk adjusted returns by focusing on the smaller capitalization companies. The fund focuses on identifying good growth businesses with reasonable size, quality management and rational valuation. The investment approach adopts prudent risk management measures like margin of safety and diversification across sectors and stocks with a view to generate relatively better risk adjusted performance over a period of time. Also Read | Parag Parikh Flexi Cap Fund exits ITC Hotels and increases stake in 8 stocks The scheme is managed by Samir Rachh and is benchmarked against Nifty Smallcap 250 TRI. An exit of 1% will be applicable, if redeemed or switched out on or before completion of one year from the date of allotment of units and the exit load will be nil thereafter. The scheme is suitable for investors who are seeking long term capital growth and want investment in equity and equity related securities of small cap companies. ( Disclaimer : Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
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Business Standard
10-05-2025
- Business
- Business Standard
Affle 3i Q4 results: Profit rise 18% rise to Rs 103 cr on higher revenue
Technology firm Affle 3i has reported a 17.8 per cent increase in consolidated net profit to Rs 103 crore in the March quarter. It had reported a profit (attributable to equity holders of the parent) of Rs 87.4 crore in the year-ago period, according to a regulatory filing. Revenue from operation during the quarter came in 18.9 per cent higher at Rs 602.2 crore, against Rs 506.2 crore a year ago. Sequentially, profit and revenue rose 2.79 per cent and 0.09 per cent, respectively. For the full FY25, profit rose 28.4 per cent to reach Rs 381.8 crore, while revenue increased 22.9 per cent to Rs 2,266.3 crore. Affle MD and CEO Anuj Khanna Sohum said the performance was driven by "consistent outperformance" of the company's CPCU (cost per converted user) business model and further amplified by favourable industry dynamics. "Having pioneered innovation and delivered meaningful impact over the past two decades, we now turn our focus to intelligence as a key growth driver. This integrated approach positions us to scale efficiently, fortify our competitive moat and unlock greater value for all our stakeholders," he said. Affle India Ltd was renamed to Affle 3i Ltd last month. Affle offers AI-led solutions in mobile advertising. It enables advertisers to optimise targeting, personalise user engagement and maximise ROI by combining proprietary data, deep audience insights and advanced generative AI capabilities. It has presence in Asia, North America, South America, Europe, and Africa.
Business Standard
10-05-2025
- Business
- Business Standard
Affle 3i consolidated net profit rises 17.81% in the March 2025 quarter
Sales rise 18.97% to Rs 602.25 crore Net profit of Affle 3i rose 17.81% to Rs 103.07 crore in the quarter ended March 2025 as against Rs 87.49 crore during the previous quarter ended March 2024. Sales rose 18.97% to Rs 602.25 crore in the quarter ended March 2025 as against Rs 506.22 crore during the previous quarter ended March 2024. For the full year,net profit rose 28.46% to Rs 381.87 crore in the year ended March 2025 as against Rs 297.27 crore during the previous year ended March 2024. Sales rose 22.98% to Rs 2266.31 crore in the year ended March 2025 as against Rs 1842.81 crore during the previous year ended March 2024. Particulars Quarter Ended Year Ended Mar. 2025 Mar. 2024 % Var. Mar. 2025 Mar. 2024 % Var. Sales 602.25506.22 19 2266.311842.81 23 OPM % 22.2419.36 - 21.3219.53 - PBDT 150.43120.35 25 564.34398.32 42 PBT 123.85100.15 24 467.64326.80 43 NP 103.0787.49 18 381.87297.27 28
Business Standard
05-05-2025
- Business
- Business Standard
Affle 3i secures patent in US to tackle fraud activities in advertising ecosystem
Affle 3i said that it has been granted a new patent in the United States (US) targeting fraud detection in app installations, reinforcing its global IP portfolio. The newly awarded patent, titled Method and System for Application Installation and Detection of Fraud in Advertisement, addresses the pressing challenge of fraudulent activities in the digital advertising ecosystem, particularly focusing on fraudulent app installations. The system leverages advanced algorithms and machine learning techniques to augment the reliability of performance-driven advertising by filtering out manipulated signals, detecting behavioral anomalies, verifying publisher authenticity and monitoring app installation processes for legitimacy. This milestone marks Affle 3is 13th patent grant, adding to its total IP portfolio of 36 patents filed to date. The patent further strengthens the companys AI-powered consumer platform stack, building upon its previously granted IPs that collectively enhance the quality and effectiveness of conversion-driven marketing. Affle is a global technology company with a proprietary consumer intelligence platform that delivers consumer recommendations and conversions through relevant Mobile Advertising. The platform aims to enhance returns on marketing investment through contextual mobile ads and also by reducing digital ad fraud. The companys consolidated net profit increased 8.95% to Rs 100.22 crore in Q3 FY25 as compared with Rs 91.99 crore in Q2 FY25. Revenue from operations jumped 10.8% QoQ to Rs 601.7 crore in Q3 FY25. The counter advanced 1.07% to end at Rs 1,599.05 on Friday, 2 May 2025.
