India’s 75th Independence: 5 Most Valuable Stocks in the Last 7 Decades

Reliance Industries

The Initial Public Offering (IPO) of Reliance Textile Industries in 1977 created a record by popularizing the equity craze in India. The share price of Reliance Industries is 53.0 per cent from its current market price of . climbed on 2,632.00, which represents an all-time high of 4,865.10%. an investment of 1 lakh made 20 years ago becomes now In 2004, Reliance became the first and only privately owned Indian company to be included in the Fortune Global 500 list. Additionally, Reliance is the first privately held firm to receive a credit rating from a global credit rating agency, such as Moody’s or Standard & Poor’s. , Reliance crossed the $10 trillion market capitalization threshold for the first time in 2019 among Indian companies.

Brokerage firm Prabhudas Lilladher said in a recent note that “We hosted a telecom expert to better understand India’s emerging telecom landscape after the completion of the 5G auction. The highlights of the call were 1) Industry Fee hike of Rs 60 per month (18-25%) likely before year-end, to make up for higher spectrum capex 2) Jio may expect revenue of Rs 230bn from connectivity and IoT by end of CY24 , then take a significant stake in the venture business (industry size likely to grow by 3x to 750bn by FY25) 3) Capital expenditure likely to be Rs 200bn, which includes spectrum payments of Rs 78bn per annum 4) Company Will likely go for more along with pan-India 5G launch. Gradual roll-out to peers, to attract premium customers.”

“Jio’s growth prospects are looking promising due to increased subscriber churn and regular tariff hikes. We leave Jio’s estimates unchanged and will review them after the 5G launch. Repeat ‘Buy’ at TP of Rs 3165. RIL is our preferred pick, given the dominant position in the business vertical,” said research analysts at broking firm Prabhudas Lilladher.

Hindustan Unilever Limited

In July 1995, Hindustan Unilever Limited made its first public offering. The share price of Hindustan Unilever Limited has increased 166 at current market price 2,591.00, representing an all-time high of 1,460.84%. an investment of 1 lakh made 23 years ago would have been now approx 15.6 lakh

Commenting on HUL’s Q1FY23 performance, research analysts at broking firm Centrum Broking Ltd said, “HUVR’s Q1FY23 print was ahead of our estimates; Revenue/EBITDA/APAT increased 19.8%/14.0%/10.3%, supported by volume growth of 6%. Undoubtedly, it was a solid all-round performance in a challenging environment. Management indicated, consumer wallet share shrank with rising food and fuel inflation and they chose to buy more essentials over discretionary products. We reckon with the increase in OOH consumption, 75% business share of the winning markets. Gross margin shrank 300bp to 47.4% due to currency depreciation as well as unbroken inflation in the top 4 commodities – palm oil, crude oil, soda ash, and plastics. Although EBITDA increased by 14%, higher advertising-expenses (+30%), other expenses (+14.5%) and employee costs (-3.4%) reduced EBITDA margin from 114bp to 22.8%. Management said the near-term operating environment remains challenging and margins have declined due to widening price versus cost gap. We have marginally changed earnings with a revised DCF-based TP of Rs 2,701 (56.3x FY24E EPS) and retained the ADD rating.”

Research analysts at broking firm Motilal Oswal said, “While the pace of earnings recovery will be gradual till double digits and then mid-teens, the improvement in the narrative will keep the multiplier high for the FMCG company. Moving on to Jun’24E EPS and maintaining our target multiplier of 60x results in our target price of INR3,000. Buy keep.”

Titan

Titan was listed on NSE on 24 September 2004, and since then, its share price has increased from 4.27 2,472.60 represents an all-time high of 57,806.32%. a 1 lakh investment made in Titan will be close today Commenting on Titan’s Q1FY23 performance, research analysts at 5.79 crore broking firm Centrum Broking Ltd said, “Titan’s Q1FY23 revenue was lower than our estimate; Revenue grew 172% on a higher basis (75.5%), while EBITDA/PAT grew 7.7x/7.9x. The Jewelery segment grew by 208% (including bullion sales) with a 3-year CAGR of 23.4%: (1) Grammar +170%, (2) New buyer contribution +46%, (3) Studded ratio +26% , and (4) the marriage clause +178%. Further, the Jewelery segment recorded an EBIT margin of 13.5%. GHS enrollment grew +30%. The Watches segment grew 169%, driven by a 109% increase in volume, while Wearables grew 4x. The eyewear business achieved the highest quarterly revenue at Rs 1.83 billion (+173%) with an EBIT margin of 19.8%. Tanira grew by 608%, while Fashion and FA grew by 275%. Caratlane rose 204%. gross margin at 25.5% (+310bp); EBITDA increased to 11.9bn (7x) YoY, resulting in an EBITDA margin of 12.7% (+872bp) YoY. APAT at Rs.7.9bn (7.9x). We maintain BUY with DCF-based TP at Rs 2,817 (69.5x FY24E EPS).”

ICICI Securities said, “Titan has been an exceptional performer in the discretionary sector, with the stock price appreciating ~32% CAGR over the last five years. We remain structurally positive on the stock as high growth visibility premiums valuations Justifies and maintains BUY on the stock.We value Titan 2800 i.e. 66x FY24E EPS.”

TCS

TCS started its initial public offering (IPO) in July 2004. The share price of TCS increased from 120.33 on August 27, 2004 3,402.00 today, represents an all-time high of 2,727.23%. an investment of 1 lakh held in shares of TCS 18 years ago would currently be worth approx. 28.27 lakhs.

Research analysts at broking firm ICICI Securities said in a note that “TCS’s share price has risen ~2.8x in the last five years (from ~~ From 1,165 in July 2017~ 3,265 levels in July 2022). We maintain BUY rating on the stock. We value TCS 3,785 ie 29x P/E at FY24E EPS.”

The new organization structure, aimed at increasing customer stickiness, is expected to lead to growth in market share, increased outsourcing in Europe, vendor consolidation and deal pipeline leading to a revenue CAGR of 12.2% in FY22-24E, We expect margins to remain under pressure till then. Research analysts at broking firm ICICI Securities said FY24, resulting in margin contraction of 30 bps in FY22-24E, and double-digit return ratio, strong cash generation and healthy payouts are key triggers for future price performance of TCS.

Research analysts at broking firm Emkay Global said, “As per our interaction with TCS management, despite uncertain macro environment, the company does not see any moderation in demand or any delay in decision making from clients. Management is looking forward to the coming quarters. Revenue growth is confident of sustaining momentum. TCS indicated that the deal pipeline remains healthy with a good mix of small, medium and large deals. The company further indicated that deal closure velocity remains stable and decision-making There is no delay in TCS signing deals worth USD34.6bn in FY22 (~10% YoY). Margins are likely to remain under pressure in the first half. Margins should improve in H2 on the back of gains from normalization of wage growth, reduction in job losses and better pricing. TCS benefits from strong demand and growing digital transformation opportunities Salary currencies among major concerns Includes inflation, currency volatility and a possible recession in the US/Europe. We have a Buy rating on 28x Mar’24E EPS with a TP of Rs 4,000.”

Infosys

In the 29 years since the initial public offering (IPO) of Infosys in February 1993, the share price has increased 11.59 to 1,593.75 represents an all-time high of 13,651.08%. an investment of 1 lakh held in Infosys shares would have increased to almost 1.37 crore

Commenting on Infosys’ Q1FY23 performance, research analysts at broking firm Nomura Group said, “We reduce FY23-24F EPS by 1-3% (TP reduction set at ~1% to INR1,700 25x FY24F EPS) Margins, partially offset by better currency (USD-INR 78 for FY23F and 79 for FY24F vs 77 earlier).

Research analysts at broking firm HDFC Securities said, “Infosys (Info In) posted strong growth in Q1 which is offset by higher impact on margins (yet relative outperformance versus peers). INFO revised its revenue guidance for FY23E. 14-16% (versus 13-15% earlier) and maintain EBITM guidance at 21-23% with a downside bias. We expect margin recovery of INFO further, sub-contractor optimization (~100bps lever) and trainee productivity (~50bps lever). On the growth side, indicators remain strong including (1) positive trends in large customer mining and strength in Northam Jio; (2) ) Strong net headcount addition well ahead of peers; (3) Growth pace in digital (61% of revenue) backed by Cobalt Cloud and flat trajectory (versus historically declining) in core services; (4) Commentary on deal pipeline ( Growing in last 3-6 months) and Mega Deals; Growing of Net-New as % of Big Deal TCV despite Soft Large Deal Bookings equity; (5) Improvement in forward margin trajectory with most increments and pass-through impact. Maintain BUY on INFO, valuing the company at INR 1,800, based on 26x FY24E EPS.”

Motilal Oswal has said, “INFO posted strong earnings in 1QFY23. Demand and order book remain strong. The increase in its FY23 growth guidance and higher numbers provide further visibility on demand. We expect INFO to reduce margins at the bottom of its guidance band due to strong growth and reduced reliance on subcontractors. We expect INFO to be the main beneficiary of the uptick in information technology spending. Based on our revised estimates, the stock is currently trading at 22x FY24E EPS. We value the stock at 26x FY24E EPS, which means a TP of INR1,760.”

Research analysts at broking firm ICICI Securities have said, “Infy’s share price has risen ~3.1x (from ~~~) in the last five years. From 490 in July 2017~ 1,500 levels in July 2022). We maintain BUY rating on the stock. We value Infosys 1,760 ie 26x P/E at FY24E EPS.”

Differentiated digital and cloud capabilities to drive growth, Growth remained broad-based and momentum remained strong, Digital transformation continues to accelerate across verticals and regions, Infosys leads industry-leading revenue growth (13.9% in FY22-24E) CAGR) and double-digit return, said research analysts at broking firm ICICI Securities said ratios, strong cash generation and healthy payouts are key triggers for Infosys’ future price performance.

Disclaimer: The views and recommendations given above are those of individual analysts or broking companies and not of Mint.

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