Q1 Results: The Operating Income Of These 10 Firms Grew The Most
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Q1 Results: The Operating Income Of These 10 Firms Grew The Most

Even as the Nifty 50 companies performed their worst in at least three years, with around half of the companies missing earnings estimates for the quarter ended June, some bucked the trend.

Here’s a list of ten companies whose operational performance grew the most in the first quarter, according to an analysis by BloombergQuint.

Selection criteria:

  • Companies with market capitalisation of at least Rs 1,000 crore.
  • The top 10 companies with the highest Ebitda growth in the three-month period ending June.

Higher volumes, lower input cost and overall cost control aided the paper company’s operating performance in 2018-19 and in the quarter ended June. Volumes of the firm’s paper and paper boards segment—which contributes nearly 90 percent of its revenue—grew 6 percent in the first quarter, while margin rose from 9.8 percent to 17 percent as raw material costs as a percentage to overall sales plunged nearly 1,400 basis points.

Westlife Development Ltd.

The operator of the McDonald’s chain of restaurants in west and south India posted improved operational performance in the three-month period, aided by growth in same store sales for the sixteenth consecutive quarter. It told investors it’s confident of sustaining growth of this metric at 7-9 percent in the near future, despite a slowdown in consumption. The company—which opened its 300th restaurant in the previous quarter—has invested in its digital capabilities, ensuring increased customer off-take and better customer experience while aggressively expanding its footprint, Nirmal Bang said.

L&T Technology Services Ltd.

Large deal wins, growth in the transportation vertical—which contributed over a third of revenues in the first quarter—and cost efficiencies aided the company’s operating profit in the last fiscal and first quarter. The technology arm of India’s largest construction company signed seven multi-million-dollar deals in the previous quarter, while the transportation arm’s revenue grew 7.5 percent even as passenger vehicle sales plunged to a two-decade low last month. However, the company reduced its U.S. revenue growth guidance for FY20 to 12-16 percent from 14-16 guided earlier due to weakness in the telecom segment.

Vinati Organics Ltd.

The chemical maker’s revenue and operational performance over the last five quarters has been aided by the exit of a larger player in the ATBS—a chemical used to make paint emulsions, adhesives and detergents—segment, an improved product mix and price hikes in a few key products. Prices of the raw materials acrylonitrile and toluene—which declined by around 20 percent each year-on-year—led to raw material costs as a percent of net sales dropping 700 bps over last year. That led to the company reporting its highest EBITDA margin of 41.3 percent despite lower offtake of isobutyl benzene, resulting in a 10 percent drop in revenue over last quarter.

Torrent Pharmaceuticals Ltd.

The drugmaker’s revenue rose 29 percent over last year following its acquisition of Unichem Laboratories’ branded business for India and Nepal on a going concern basis in December 2017. Torrent Pharma’s earnings for the quarter ended June met analysts’ estimates driven by better-than-expected gross margins. Its U.S. sales were driven by short-term product shortages, resumption of sales in blood pressure medication Losartan and ramping up of recent launches. Sales in other geographies grew, but India formulation sales declined marginally.

Astrazeneca Pharma India Ltd.

An increase in revenue and lower costs aided the drugmaker’s operating performance in 2018-19 and in the quarter ended June. Revenue growth was led by the company’s focus on therapeutic areas like cardio-metabolism, oncology and respiratory disorders. Operating profit jumped over three times aided by lower costs of raw material and sales.

Sterlite Technologies Ltd.

Revenue of the supplier of fibre cables grew over 60 percent in 2018-19 and the quarter ended June, aiding operating profit. However, margins declined marginally following fall in fibre prices and higher contribution from low-margin service segment.

Biocon Ltd.

The biotechnology firm’s operating profit rose in 2018-19 and in the quarter ended June led by continued growth momentum in biosimilars segment following launches in developed nations and expansion in emerging markets and its subsidiary Syngene International Ltd. adding clients. The company was positive on its margin outlook during an interaction while announcing its earnings for the June quarter.

Coal India Ltd.

Lower employee cost and higher coal realisation aided the miner’s operating profit in 2018-19 and in the June quarter. Blended coal realisations were aided by higher online auction prices, while employee costs fell due to one-time gratuity and other adjustments in 2017-18.

Ingersoll-Rand (India) Ltd.

Revenue growth and cost control aided operating profit growth of the air solutions provider. Revenue grew on the back of company’s focus on local innovation and creating new markets, according to its annual report. Cost controls led to lower raw material costs and lower other expenses for the company in 2018-19 and in the quarter ended June.

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