19 firms that have doubled profits for two straight years available at 20-50% discount

NEW DELHI: Investors are always searching for profit multipliers at an attractive price. But finding such names is not easy. A cursory screening of stocks that have declared results in the March quarter throws up 19 names that have more than doubled their profits in the last two years.

They are Tata Steel, Info Edge (India), National Aluminium Company, Jindal Stainless, Greenpanel Industries, Godawari Power and Ispat, CSB Bank, Sarda Energy & Minerals, Thirumalai Chemicals, Ramkrishna Forgings, Steel Strips Wheels, Hindware Home Innovation, Best Agrolife, Everest Kanto Cylinder, Gokul Agro Resources, Xpro India, Sportking India, Mishtann Foods and Nitin Spinners.

Some of them are obvious names, especially those that have benefitted from the commodity boom in the last couple of years. A few of them are little known names that have surprised investors and analysts.

Their performance is remarkable as it has come at a time when rising inflation has put pressure on margins and ultimately bottomline of companies. This is apparent from the depression in share prices as these stocks are trading at 20-50 per cent lower compared to their 52-week high prices.

“Persistent higher inflation and rates may also adversely impact demand, margins, and hence corporate earnings. This is already reflecting in earnings downgrades outweighing upgrades in India with nearly 3 in 4 stocks seeing earnings being revised downwards,” said SBI Mutual Fund in a recent note.

Now the question is, should you buy the above mentioned stocks? Analysts believe here you should become picky. Even though they are available at a deep discount, and they have performed remarkably well, the outlook for each of them could be different.

For instance, shares of steel companies fell sharply recently after the government increased tariffs on exports. This is expected to hit their sales and profits. Though, some analysts say market reaction was too extreme and a value is emerging in them.

"Metal prices had crashed following the widespread Chinese lockdowns. To make matters worse, the government of India imposed export duties on certain categories like steel and iron ore. This depressed domestic prices and led to a near 30 percent crash in stock prices of metal majors. Now the situation is slowly improving,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

“Chinese opening up has improved supply chains and also raised the demand for metals. So prices are looking up. But so long as export duties remain, metal stocks are unlikely to rally beyond a point. But it is a fact that stock prices had over-reacted on the downside. This may be partly corrected."


Among the above-mentioned names, consensus rating on Tata Steel, Jindal Stainless and Nalco hovers between buy and strong buy. Average target prices signal 30-120 per cent upside in them in the next 12 months.

Info Edge is another name that analysts are bullish on given India is emerging out of the pandemic strongly, and the booming internet market is set to benefit the companies and brands it operates. The company has delivered 556 per cent and 237 per cent profit growth in FY22 and FY21, respectively. Average broker target projects 28 per cent potential upside from current levels.

Greenpanel Industries is also a strong buy with potential upside of 34 per cent. CSB Bank has only one brokerage coverage with target at Rs 270 against current prices of Rs 186. Ramkrishna Forging is also a buy with consensus potential upside of 57 per cent.

Rest of the stocks have hardly any analyst coverage.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)