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The S&P BSE Midcap index has outperformed the market, with index inching towards its 52-week high after strong earnings reported by the companies. The midcap index hit an intra-day high of 26,292, quoted close to its 52-week high level of 26,440.81, touched on December 12, 2022. It had hit an all-time high of 27,246.34 on October 19, 2021.

At 10:51 AM; the S&P BSE Midcap index, was the top gainer among broader indices, up 0.75 per cent, as compared to 0.51 per cent rise in the S&P BSE Smallcap index and 0.35 per cent gain in the S&P BSE Sensex. In past one month, the midcap index has rallied 7.5 per cent, as against 6.6 per cent surge in Smallcap and 3.6 per cent rise in the Sensex.

Among the midcaps – ABB, Alkem Laboratories, AU Small Finance Bank, Cholamandalam Investment and Finance Company, Glenmark Pharma, IDFC First Bank, Indraprashta Gas, Indian Hotels, Mahindra & Mahindra Financial Services and Varun Beverages (VBL) hit their respective 52-week highs on the BSE.

Among the individual stocks, VBL hit a record high of Rs 1,529, and rallied 5 per cent in intra-day trade today, surging 8 per cent in past one week. The company produces & distributes carbonated drinks, juices & packaged drinking water in six countries including India. Some of the PepsiCo brands produced by VBL include Pepsi, Diet Pepsi, Seven-Up, Mirinda, Mountain Dew, Nimbooz, String, Slice, Tropicana, Aquafina among others.

VBL reported revenue growth of 38 per cent in March quarter (Q1CY23), driven by robust volume growth and an increase in net realization. Profit after tax (PAT) increased by 61.8 per cent year-on-year (YoY) to Rs 439 crore from Rs 271 crore in Q1CY22 driven by high growth in revenue from operations, improvement in margins, and transition to a lower tax rate in India.

Analysts at Emkay Global Financial Services maintain BUY on VBL, with revised target price of Rs 1,700/share (vs Rs 1,660 earlier), based on unchanged target multiple of 40x. With improved affordability, VBL remains confident about demand for new products and plans improving supply by leveraging its two new manufacturing capacities in CY24 and its existing distribution/visi-cooler network, the brokerage firm said in its result update.

Shares of IDFC First Bank hit a fresh 52-week high of Rs 65.85, up 3 per cent on the BSE in intra-day trade today. In past one month, the stock of private sector bank has rallied 22 per cent, as it reported a strong 134.2 per cent surge in Q4 net profit to Rs 803 crore when compared with Rs 343 crore in the corresponding quarter a year ago. Net interest income (NII) grew by 35 per cent YoY, with margins expanding 5bp QoQ to 6.41 per cent.

Credit growth continued to remain strong and ahead of industry growth coupled with a gradual improvement in cost to income and steady asset quality. RoA reached at 1.1 per cent in FY23 and expected to improve to 1.3 per cent next year, analysts at ICICI Securities said in result update.

IDFC First Bank delivered a strong quarter with healthy growth across key parameters. Strong treasury gains boosted earnings, which were prudently utilized to increase coverage. Margin too saw further expansion. Business growth was healthy and the brokerage firm Motilal Oswal Financial Services estimates a 25 per cent CAGR in loans during FY23-25. The bank expects new businesses such as Commercial Banking, Credit Cards and Home Loans to drive loan growth and earnings.

Indian Hotels hit a new high of Rs 377.80, up 2 per cent on the BSE in intra-day trade. In past one month, the stock has rallied 15 per cent.

In Q4FY23, the company’s revenue grew 86 per cent YoY to Rs 1,625 crore and was up 52 per cent vs. pre-Covid levels (Q4FY20) led by strong performance from the domestic segment. EBITDA (earnings before interest, taxes, depreciation, and amortization) margin also expanded 1330 bps from pre-Covid levels to 32.9 per cent.

According to analysts, the revival in foreign tourists, wedding season, G20 summit 2023 to provide further fillip to leisure and business hotel room demand, going forward.

The management indicated that the April 2023 performance has been better than April 2022 and the room bookings trend for May is also strong. On the EBITDA margin front, the management reiterated its guidance of margin in the range of ~33 per cent with Q3 and Q4 having higher margins.