3 top-performing Nifty stocks delivered over 100% return in 1 year; what's ahead?

3 top-performing Nifty stocks delivered over 100% return in 1 year; what’s ahead?

Multibagger stocks: NTPC Ltd, Bajaj Auto Ltd and Tata Motors Ltd are three top-performing Nifty stocks that doubled investor money in the last one year.  While NTPC delivered 113 per cent in the one-year period, automakers Bajaj Auto and Tata Motors delivered 112 per cent returns each for the same period, data showed.

Among them, Bajaj Auto Ltd will be first to announce March quarter results on April 18, Thursday. Tata Motors will declare its quarterly results on My 10 while the PSU NTPC will be announcing its quarterly results date shortly.

In the case of Bajaj Auto, analysts are expecting the two-wheeler major to report 30 per cent jump in Q4 profit on 25 per cent YoY rise in sales. Tata Motors, on the other hand, is seen reporting a 30 per cent rise in the bottom line on a 10-12 per cent growth in sales.

“The sharp rise in the Nifty Auto Index (18 per cent) in the last three months, outperforming the Nifty-50 index, has pushed forward PE valuations above the 10-year mean level.  The outperformers were Bajaj Auto, Tata Motors and Maruti Suzuki. The gradual uptick in  commodity costs, fuel prices along with the valuations leads to the discomfort, forcing us to  be selective in stocks while retaining our Overweight (OW) rating on automobile OEMs,” said  InCred Equities in a note.

This brokerage has a target of Rs 8,090 for Bajaj Auto and Rs 639 for Tata Motors. In its Q4 preview note, Nuvama Institutional Equities upgraded Bajaj Auto to ‘Buy’ on robust outlook while it downgraded Tata Motors to ‘Reduce’, on weak outlook.

Nuvama cut its target price cut to Rs 940 on Tata Motors on lower earnings assumption and application of lower valuation multiple for CV business to 10 times EV/EBITDA from 11 times earlier. It increased Bajaj Auto target price to Rs 10,340 from Rs 6,850 earlier, as a result of higher earnings assumption and application of higher valuation multiple.

“Bajaj Auto is witnessing market share gains in domestic segment, strong volume performance in exports and surge in EV volumes. We anticipate healthy demand/margin outlook and also expect valuation multiples to remain elevated due to expected IPOs of Ola/Ather, which is leading to re-rating of valuations for EV businesses,” Nuvama said.

Meanwhile, in the case of NTPC, the power generation company is expected to report net sales of Rs 43,600 crore in 4QFY24, up 1  per cent YoY. Ebitda is estimated at Rs 12,600 crore and PAT flattish at Rs 4,925 crore. JM Financial said the company’s revenue may grow slightly thanks to increased production capacity. Ebitda, on the other hand, is seen improving as the PSU continued impressive trend in coal production. JM Financial has a ‘Buy; rating on NTPC price target of Rs 368.

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