Shares of Honeywell Automation jumped 9% on the morning of May 18 as investors cheered the company’s stellar fourth-quarter earnings.
Shares of the industrial products company traded at Rs 40,004 at 9:38 am, up 6.66%. Year to date, the stock has traded 882 shares compared with its five-day average of 185 shares, an increase of 375.73%.
Honeywell Automation’s consolidated revenue rose 27% year-on-year to Rs 849.68 crore while EBITDA rose 59% to Rs 138.8 crore. The operating margin rose to 16.34% in the March quarter from 13.07% a year earlier. Net profit rose 54% year-on-year to Rs 112.03 crore.
The company’s fourth-quarter revenue beat estimates by 2%, according to Nuvama Institutional Equities. The company said that a strong recovery in margins of about 300 basis points to 16.3% was a surprise, as gross margins surged sequentially.
Nomura said the dividend payout for FY23 was Rs 95 per share, implying a payout ratio of 19%. The Japanese brokerage firm maintained its “buy” call on the company’s shares with an unchanged target price of Rs 50,642.
Nuvama Institutional Equities said the growth and profitability challenges appeared to be intractable, requiring a clearer understanding of emerging segments and parent company mandates. It retained its “reduce” rating on the stock but raised its price target to Rs 31,800 from Rs 31,500.