Q4 Results 2022 Impact: Nykaa, PB Fintech, City Union Bank, Oil India & 3 others' share price surge up to 10%; brokerages 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 have jumped up to 10 per cent on the BSE intraday trade on Monday.

It was on the back of healthy March quarter results. The above-mentioned companies reported their fourth-quarter earnings for FY22 mostly during the weekend, wherein majority of them showed year-on-year growth in the top line and have also improved their margins in the March quarter. 

Individually, City Union Bank was the biggest gainer and the shares were up nearly 10 per cent to Rs 139.2 per share on the intraday basis. It was followed by Aarti Industries, whose shares were up 7 per cent and were trading at Rs 820 per share on the BSE. 

While Info Edge and Nykaa each gained by around 4.5 and 5.5 per cent to Rs 3863 and Rs 1425 per share on the BSE intraday. 

Even state-owned oil exploration company Oil India shares gained 5 per cent intraday on the BSE to hit the day’s high level of Rs 229 per share. Similarly, Astral and PB Fintech shares soar around 2 per cent intraday each to Rs 1728 and Rs 700 per share, respectively, on the BSE. 

City Union Bank’s relatively better days are ahead but the stock remains low in YES Securities’, a domestic brokerage firm, pecking order. It said the recoveries were healthy for the quarter and management guided for an improvement in gross slippage ratio for FY23.  

While the net interest margin (NIM) was broadly stable sequentially and management guided for further stability in NIM and now guiding for loan growth around low to mid-double digits for FY23, said YES Securities maintaining an Add rating with a target of Rs 145 apiece (14 per cent upside). 

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

Even so, steady production growth, upside risk to price, GRM estimates, and attractive valuations make Oil India’s risk-reward compelling at current levels, said ICICI Securities reinitiating a Buy coverage with a target price of Rs 350 per share (61 per cent upside). 

For PB Fintech, ICICI Securities said apart from growth in core business and increasing share of renewal, now offline channel will also aid contribution margins, also brand strength, cash balance, and experienced management are setting up a well-knit story in the insurance intermediary space.  

ICICI Securities maintained a Buy rating with a target price of Rs 940 per share (37 per cent upside). Higher cash burn and marketing spends and adverse regulatory changes pose key downside risks to the brokerage’s thesis. 

Kotak Institutional Equities trim FY23-24 revenue forecasts by 7-8 per cent of Nykaa on lower customer addition. This results in a 13-21 per cent EPS cut for FY23-24E and a revised target price to Rs 1,870 from Rs 2,100 per share earlier (38 per cent upside) with a Buy rating,  

Nykaa is well-positioned to benefit from rising online BPC spends and is also looking to drive value from adjacencies such as B2B distribution, the domestic brokerage said in its report.