While profit margin rises consistently for 6 companies, stocks turn multibaggers
There are 6 BSE companies whose profit margin rose consistently and grew at least 10 percent in each of the last four quarters. Interestingly, these stocks more than doubled investor wealth in last one year.
As benchmark indices - Nifty and Sensex - are racing ahead touching fresh record highs, the investors are getting worried about heated valuations. The one factor that can give some support to the expensive valuations of stocks is healthy corporate earnings. Moneycontrol has tracked BSE companies that have been reporting strong profit margins (PAT margins) consistently. The profit margin ratio is an indicator of how best a company manages its finances. We found 6 BSE companies whose profit margin rose consistently and grew at least 10 percent in each of the last four quarters (September 2020 to June 2021). We considered only those firms whose sales and profit increased in each of last 4 quarters and those which have a market-cap of over Rs 500 crore. Interestingly, stocks of all these 6 firms have doubled investor wealth in last one year. (Data Source: ACE Equity)
2/7
Balaji Amines Ltd. | In last 1 year, the stock has risen 377 percent to Rs 3426 per share as on August 16, 2021. The company's profit margin in September '20 quarter was 16 percent, December '20 quarter: 20 percent, March 2021 quarter: 21 percent, and June 2021 quarter: 22 percent.
3/7
Deepak Nitrite Ltd. | In last 1 year, the stock has risen 264 percent to Rs 2131 per share as on August 16, 2021. The company's profit margin in September '20 quarter was 17 percent, December '20 quarter: 18 percent, March 2021 quarter: 20 percent, and June 2021 quarter: 20 percent.
4/7
Sarda Energy & Minerals Ltd. | In last 1 year, the stock has risen 237 percent to Rs 764 per share as on August 16, 2021. The company's profit margin in September '20 quarter was 16 percent, December '20 quarter: 19 percent, March 2021 quarter: 19.7 percent, and June 2021 quarter: 20.4 percent.
Saksoft Ltd. | In last 1 year, the stock has risen 153 percent to Rs 668 per share as on August 16, 2021. The company's profit margin in September '20 quarter was 11 percent, December '20 quarter: 12 percent, March 2021 quarter: 13 percent, and June 2021 quarter: 17 percent.
6/7
L&T Technology Services Ltd. | In last 1 year, the stock has risen 135 percent to Rs 3675 per share as on August 16, 2021. The company's profit margin in September '20 quarter was 12.7 percent, December '20 quarter: 13.3 percent, March 2021 quarter: 13.6 percent, and June 2021 quarter: 14.3 percent.
7/7
KMC Speciality Hospitals (India) Ltd. | In last 1 year, the stock has risen 104 percent to Rs 43 per share as on August 16, 2021. The company's profit margin in September '20 quarter was 11 percent, December '20 quarter: 14 percent, March 2021 quarter: 18 percent, and June 2021 quarter: 18 percent.
