3 Blue Chips with HIGHEST Profit Margins in FY23!

  • Stock Market Analysis

Profit margin simply means what is the ratio of the net earnings of a company compared to the total revenue generated. This metric makes the comparison among different peers easier. For eg. a company with INR 10,000 crores in revenue and a profit of INR 5,000 crores is better than a company with INR 8,000 crores profit over revenue of INR 24,000 crores because the former has a margin of 50% compared to a 33% of the latter.

If you are looking to construct a portfolio of blue-chip companies with the highest profit margins in FY23 (as of the declared results till 26 May 2023), here’s a list of the top 3 from the Nifty 100 index.

Bajaj Holdings and Investment Limited

Bajaj Holdings and Investment Ltd (NS: BJAT ) is a holding and investment company, having a market capitalization of INR 77,040 crores. The company garnered revenue of INR 5,194.36 crores in FY23 and was able to secure a profit of INR 4,850.52 crores, translating into a mammoth net profit margin of 93.3%. That’s humongous!

It almost seems impossible. However, if some of you might be wondering whether it is a one-time performance or a consistent one, in the previous 2 fiscal years, the company secured margins of 92.59% in FY22 and 93.38% in FY21. It also pays a consistent dividend and currently trading at a yield of 1.73%.

HDFC Asset Management Company Limited

HDFC Asset Management Company Ltd (NS: HDFA ) is a midcap AMC with a market capitalization of INR 37,651 crores. It is not a blue chip anymore, all thanks to a massive 51% fall from the ATH of INR 3,844 but as it is still in the Nifty 100 index, I have included it on the list. However, on the financial front, the company is making strides.

In FY23, it registered a profit of INR 1,423.37 crores over revenue of INR 2,482.62 crores, giving it a hefty margin of 57.33%. Since FY20, profit margins have remained over 55%. SEBI’s recent consultation paper to put a cap on the TER (total expense ratio) of mutual funds has also been a factor in the poor performance of the stock.

Power Grid Corporation of India Limited

Power Grid Corporation of India Ltd (NS: PGRD ) comes at the third spot in the Nifty 100 list of highest profit margin companies in FY23. It is a transmission company engaged in the power transmission business, having a market capitalization of INR 1,65,980 crores. In FY23, it posted record revenue of INR 46,854.21 crores over which a net income of INR 15,417.12 was recorded.

This was a result of a high profit margin of INR 32.9%, compared to 36.3% and 29% in FY22 and FY21, respectively. It is also a good dividend stock currently trading at an inflation-beating yield of 6.2%.

Read More: Explained: How a Finfluencer Ended Up Paying 6.5 Cr to SEBI!

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  • Rajendra Soni @Rajendra Soni
    view on bajaj holding at current level
    Like 0

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