Profit powerhouses! 5 multibaggers see consistent EPS growth over last 3 fiscals. Can the trend last?

The June quarter earnings season has come to a close and the performance has been a mixed bag. While the Q1 show of the companies was in line, the earnings upgrade to downgrade ratio was unfavourable for FY24E. Amid this backdrop, a study by ETMarkets zeroed in on companies that have reported consistent earnings per share (EPS) growth, underlying their ability to make profits for the shareholders.

The study further revealed that 68 stocks from the list gained between 20-246% in the last one year, which includes five multibaggers. To top it all, analysts expect the earnings per share of these companies to further grow in FY24.



On the top of the list is Apar Industries, which has seen its EPS rise from 41.94 in FY21 to 67.08 in FY22 and to a further 166.64 in FY23. This manufacturer and supplier of conductors, a wide variety of cables, specialty oils, polymers and lubricants has seen its shares rally 246% in the last one year. On a three-year basis, it has surged nearly 1,300%.

Analysts further expect its FY24 EPS to rise to 175.6, with the highest estimate at 212.4, shows Trendlyne data. The stock enjoys 'strong buy' & 'buy' recommendations from the three analysts that cover the stock but also a possible downside of 37% downside, data further showed.

"We believe Apar Industries' focus towards value-added products and strong traction in the exports business will drive strong topline and profitability in the long run. Hence, we expect revenue/PAT CAGR of 16.5%/5% from FY23-25E, amid high PAT base," brokerage Prabhudas Lilladher said while maintaining BUY but it slashed the target price to Rs 3,725 from Rs 3832 earlier.

Second on the list is NCC, which saw its share rally 138% and 388% in the past one- and three-year period, respectively. NCC's EPS grew from 4.40 in FY21 to 7.91 in FY22 and finally to 9.70 in FY23. Trendlyne data shows, analysts further see it rising by 28% to the highest estimate of 12.4.

This stock also has a consensus 'buy' recommendation, with an upside scope of 15%, according to Trendlyne data.

NCC is followed by Union Bank of India. This PSU lender's EPS grew consistently from 4.47 to 12.45 between FY21-FY23. Analysts further see its EPS growing to 17.2 and the highest estimate is at 18.3. The bank had reported a more than 100% jump in net profit at Rs 3,236 crore in the June quarter, aided by a decline in bad loans and an improvement in interest income.

Union Bank of India's shares have rallied 133% in the last one year and 217% in the last three years. Analysts have a consensus recommendation as 'hold' for Union Bank with a potential upside of 8% from current levels.

Investor appetite for PSU bank shares has grown on the back of strong quarterly earnings delivered by them on a consistent basis. The average net profit of PSU banks jumped 102% in the June ended quarter. Analyst Aamar Deo Singh, Head Advisory, Angel One credited healthier balance sheets, uptick in credit off-take and improving asset quality for the turnaround of the public lender stocks.

Indian Bank is another PSU lender on the list, which has seen its shares climb 114% on a one-year basis and 521% on a three-year basis. The EPS has grown from 27.88 in FY21 to 33.26 in FY22 and to 44.74 in FY23. Going ahead, analysts estimate EPS can rise as high as 64 in FY24, with an average estimate of 58.1.

Last on the list is KPIT Technologies. This company's EPS can rise by over 40% in FY24 to as high as 20.7. It has, meanwhile, seen its EPS grow 5.43 in FY21 to 10.16 in FY22 and further to 14.09 in FY23. The stock has rallied 1336% in the past three years and 102% in the last one year.

Given the meteoric rise, analysts now see a 13% fall in the stock prices from current levels.

Investors must note that growing EPS does not necessarily mean higher future returns.

(Data Inputs: Ritesh Presswala)

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