Zomato, Patanjali Foods, DCX Systems, and JK Paper hit 52-week high

At around 11.35 am on Tuesday, over 200 stocks advanced towards a 52-week high. The NIFTY traded at 24,180 level, marking modest gains of 0.09%, while BANK NIFTY traded at 52,320 level lower by 0.48%. The India VIX fell to the 13.60 level.

On Tuesday, July 2, 2024, four stocks soared to new 52-week high:

The stock's rally appears to be fueled by the news that Zomato has rehired two senior executives who had previously left the company. According to reports, Rahul Ganjoo, former CEO of food delivery, and Pradyot Ghate, former Vice President, are making a return to Zomato. The company is planning to diversify its business verticals through acquisitions, and both returning executives are expected to contribute new ideas to its 'Going out' business which encompasses dining, lifestyle, and entertainment segments.

Rahul Ganjoo resigned from Zomato in January 2023 after five years and six months, while Pradyoyt Ghate left in July 2023 after nine years and ten months, as per their LinkedIn profiles.

Zomato’s revenue breakdown for its various products is as follows: 48.3% of delivery, 26.7% from Hyperpure, 21.6% from quick service business and 2.6% from dine-out advertising, and 0.8% from other sources. In FY24, the company reported an operating profit of ₹42 crore. Over the past 12 months, the stock has delivered over 176% returns.

The positive movement in the stock was driven by the company's announcement that its board had approved acquisition of the the entire non-food business undertaking from its parent company, Patanjali Ayurved, through a slump sale arrangement on a going concern basis, subject to the approval of shareholders and lenders.

The transaction would be valued at ₹1,100 crore, with payment to be made in tranches. This deal is expected to expand the product portfolio of the company.

In FY24, the company has seen muted sales growth, with consolidated revenue stayed flat on YoY basis. Consolidated net profit declined by 13% on a YoY basis. However, the company did see a positive development in its interest cost, which decreased by 22% on a YoY basis in FY24.

The buying interest in stock was seen on the back of announcement made by the company. The company announced receipt of a purchase order worth ₹1,250 crore from L&T Ltd to manufacture and supply electronic modules within 3 years.

DCX Systems Ltd provides optimal solutions to the defense & aerospace sector. The company is an international leader and vertically integrated military, aerospace, design & Manufacturing company that specializes in providing integration and interconnect solutions.

In FY24, the company reported consolidated revenue and net profit of ₹1,423 crore and ₹68 crore, respectively. In the last 12 months, the stock has surged about 68%.

The stock on NSE today saw strong volume traded, with 146.33 lakhs shares changes hand, valuing ₹864 crore by 11 am. The stock currently trades at an adjusted P/E of 8, and over the last month, it has surged about 56%.

In FY24, the company reported consolidated revenue of ₹6,659 crore and net profit of ₹1,113 crore. The revenue has grown by 3.5% on a YoY basis but the direct cost has grown by 14% YoY basis in FY24 showing a slow growth rate and increasing input costs.

The recent GST council meeting brought significant relief to the paper industry by slashing the GST rate on paper from 18% to 12%. However sluggish demand, intense competition from Chinese manufacturers, and increasing input costs remain key concerns in the industry.