Continuing their gaining streak, domestic market barometers were in the green on Tuesday’s early trades, supported by healthy Q4 earnings and FIIs turning positive. At 12:55 PM, the Sensex was quoting 315.45 points or 0.52% higher at ₹ 61427.89 points, while the Nifty 50 was quoting 96.90 points or 0.54% higher at 18161.90 points.
Amid positive sentiments, the shares of three blue chip companies reached their fresh multi-year highs:
Bajaj Auto Ltd
The automobile company’s shares gained 1.67% on Tuesday’s early trades to reach a 10-year high of ₹ 4,505.90 apiece. The company reported a 7% jump in overall sales for the month of April. Though exports for the month of April 2023 fell 43% to 1.18 lakh units, domestic sales more than doubled year-on-year to 2.13 lakh units. Moreover, the company declared a dividend of ₹ 140 per share.
Bajaj Auto is the flagship company of the Bajaj group and it manufactures two-wheelers and three-wheeler vehicles. It has acquired a 48% stake in the KTM brand that manufactures sports and super sports two-wheelers.
With a market capitalization of ₹ 1,25,405 crores, Bajaj Auto is a large-cap blue chip stock. It has an ideal return on equity of 20.47% and a dividend yield of 3.16%. Its shares were trading at a price-to-earnings ratio (P/E) of 20.84, which is higher than the industry P/E of 13.65, indicating that it might be overvalued as compared to its peers.
Larsen & Toubro Ltd (L&T)
The civil construction major’s shares gained 2.20% on Tuesday to reach a 10-year high of ₹ 2,416.35 apiece on expectations that it will report strong order inflows with health execution in the March quarter (Q4FY23). Its board of directors are scheduled to meet on May 10, 2023, to consider and approve its audited financial statements for the year ended March 31, 2023, and to approve dividend, if any.
L&T is the country’s largest engineering & construction (E&C) company, with an interest in EPC projects, hi-tech manufacturing and services. It primarily operates in infrastructure, heavy engineering, defence engineering, power, hydrocarbon, and services business segments.
With a market capitalization of ₹ 3,32,312 crores, Larsen & Toubro is a large-cap blue chip company. It has a return on equity of 10.95% and a debt-to-equity ratio of 1.58. Its shares were trading at a price-to-earnings ratio (P/E) of 32.91, which is higher than the industry P/E of 1.58, indicating that it might be overvalued as compared to its peers.
Nestle India Limited
Shares of Nestle India Ltd gained 1.55% on Tuesday’s early trades to reach a 5-year high of ₹ 22,099.00 apiece on the National Stock Exchange. The company’s share price has been rising since it reported its Q1 results (January to March 2023). The FMCG major reported a 24.69% year-on-year rise in its profit at ₹ 736.64 crores for the March quarter as compared to ₹ 590.77 crores in the corresponding quarter last year. Its revenue from operations grew by 20.98% to ₹ 4830.53 crores in the latest quarter, compared to ₹ 3992.60 crores in the same quarter last year.
Nestle India is a subsidiary of Nestle, which is a Switzerland-based MNC. It operates in the food segment and has an established market position in most product categories it has a presence in. Some of its famous brands include Maggi and Kit-Kat.
With a market capitalization of ₹ 2,09,814 crores, Nestle is a large-cap blue chip company. It has a very high return on equity of 108.52% and a debt-to-equity ratio of 0.11. Its shares were trading at a price-to-earnings ratio (P/E) of 82.85, which is higher than the industry P/E of 23.70, indicating that it might be overvalued as compared to its peers.
Written by Simran Bafna
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