Stock Fundamentals

Why did these 3 stocks buck the market

Nalinakanthi V | Updated on: Jun 04, 2022

We take a look at Timken India, Century Textiles and Welspun Corp

Even as the benchmark indices shed some of the gains made early in the week to a modest 1.5 per cent gain for Nifty and. Sensex respectively, some stocks, outperformed the market posting a stupendous rally.

Timken India, which is a global leader in engineered bearings and power transmission equipment has gained 28 per cent in the past week. The company’s diversified market presence, catering to a variety of user industries ranging from auto (commercial vehicles), power transmission, process industries etc coupled with product leadership in bearings has given it an edge over competition. Strong performance of the company in the latest March quarter and FY22 helped the recent rally. The company reported stellar revenue growth of 40 per cent to ₹672 crore in the quarter and 55 per cent for the fiscal. Likewise its net profit grew 73 per cent and 129 per cent for the quarter and FY22 respectively. The strong growth momentum possibly justifies the premium valuation for the stock which is trading about 49 times its FY23 expected earnings.

Another stock which saw renewed investor interest over the week is Century Textiles and Industries. Improving outlook in the textile and paper segment and increase in the residential sales booking for its realty segment has helped the 21 per cent up move in the counter. During the March quarter, the company reported an impressive 44 per cent growth in revenue to ₹1210 crore. FY22 sales grew 58 per cent to ₹4131 crore. From a loss of₹8 crore, the company reported profit of ₹86 crore in the March quarter. Likewise the company clocked profit of ₹167 crore compared to a loss of ₹3 crore for the year ended March 2022. The stock traded at about 50 times its estimated FY23 earnings.

The 10 per cent rally in Welspun Corp Ltd’s stock was on the back of a recent order win by its associate East Pipes Integrated Company for Industry (East Pipes), which is a leading manufacturer of Helical Submerged Arc Welded Pipes. The order valued at Saudi Arabia Riyal 490 million was awarded by Saline Water Conversion Corporation (SWCC) and will be executed over a period of 12 months. Welspun Corp is the second largest manufacturer of large diameter pipes.

The company was awarded a similar order worth SAR 497 million in March 2022. The company posted revenue and profit growth of 27 per cent and 63 per cent in the recent quarter. However on a full year basis the company’s revenue remained flat at ₹5287 crore, with a decline in profit from ₹1018 crore in FY21 to ₹485 crore in FY22. The stock currently trades about 18 times its estimated FY23 earnings.

Published on June 04, 2022
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