Top 5 Stocks With Notable Insider Buying

Ever wondered why some investors keep a close eye on companies with rising promoter holdings?

Tracking these companies can be a game-changer for your investment strategy.

When promoters - those with the most intimate knowledge of the company - increase their stake, it signals a strong belief in the company's future growth and profitability.

Higher promoter holdings often mean better alignment between management and shareholder interests, leading to improved decision-making and corporate governance.

This alignment also reduces the risk of hostile takeovers, ensuring stability in the company's strategic direction.

For investors, this alignment can lead to more robust and potentially more rewarding investment opportunities.

Reflecting this trend, several prominent Indian companies, witnessed significant increases in promoter holdings.

These changes were driven by strategic acquisitions and reduced foreign institutional investor (FII) stakes.

Let us have a look at them one by one.

#1 Jai Balaji Industries

First in our list is Jai Balaji Industries.

Jai Balaji Industries Limited, engaged in the manufacturing of iron and steel products, is priced at Rs 880 with a market capitalisation of Rs 151.7 billion (bn).

In Q1FY25, FII holding decreased by 0.03% and promoter holding increased by 2.04%. Fourteen promoters made changes in their shareholding patterns.

Jai Balaji Industries Financial Snapshot (2020-24)

	FY20	FY21	FY22	FY23	FY24
Revenue Growth (%)	-5%	-4%	68%	31%	5%
Gross Profit Margin (%)	23%	26%	29%	30%	35%
Operating Profit Margin (%)	1%	3%	4%	5%	14%
Net Profit Margin (%)	NM	NM	1%	1%	14%
Return on Capital Employed (%)	NM	1%	9%	18%	61%
Return on Equity (%)	NA	NA	NA	10%	59%

Data Source: Screener.in

Coming to its financials, in Q1 FY25, the revenue increased by 16% YoY to Rs 17.1 bn.

The increase in sales for the quarter was driven by production increases in TMT bars, ferro alloys, and DI pipes by 18%, 39%, and 4% YoY, reaching 60,000 tons, 34,000 tons, and 64,000 tons, respectively.

Sales of TMT bars, ferro alloys, and pipes also showed growth, with increases of 16%, 19%, and 4% YoY. While the net profit for the quarter was up by 23% YoY to Rs 2 bn, with PAT margins at 12%.

Jai Balaji Industries has a total capex plan of Rs 10 bn; Rs 6 bn has already been incurred, with Rs 3.9 bn expected over the next 12 months.

The FY25 capex guidance is set at Rs 3-3.5 bn, with Rs 1.080 million (m) spent in Q1 FY25.

Going forward, Jai Balaji Industries expects strong demand from the Jal Jeevan Mission and other government initiatives, with no signs of demand slowdown despite elections or monsoon issues. The management anticipates stable pricing for DI pipes and ferro alloys on a YoY basis.

The management is confident about maintaining margins, supported by a robust order book and ongoing government projects.

For further information about the company, you can check out its financial factsheet and quarterly results.

#2 Ambuja Cements

Second in the list is Ambuja Cements.

Ambuja Cements Ltd, a leading cement company in India and a member of the Adani Group, has a current market price of Rs 645 and a market capitalisation of Rs 1.6 trillion(tn).

In Q1FY25, FII holding decreased by 1.5% while promoter holding increased by 3.59%. Holderind Investments Ltd decreased its stake by 6.16%, while Harmonia Trade and Investment Limited increased its stake by 9.75%.

Among the FIIs, GQG Partners Emerging Markets Equity Fund reduced its stake.

Ambuja Cements Financial Snapshot (2020-24)

	Dec-19	Dec-20	Dec-21	Mar-23	Mar-24
Revenue Growth (%)	4%	-10%	18%	34%	-15%
Gross Profit Margin (%)	86%	87%	90%	87%	85%
Operating Profit Margin (%)	17%	20%	21%	13%	19%
Net Profit Margin (%)	10%	13%	13%	8%	14%
Return on Capital Employed (%)	14%	14%	17%	13%	14%
Return on Equity (%)	12%	14%	15%	11%	12%

Data Source: Screener.in

In Q1 FY25, Ambuja Cement saw a decline in the sales of 4.6% YoY to Rs 83 bn.

The net profit was Rs 7.9 bn in Q1FY25 marking a 30% decline YoY. This drop in net profit was attributed to rising expenses and lower revenues.

Looking ahead, Ambuja Cements anticipates cement demand to grow 7-9% in FY25, reaching around 451 million tonnes per annum (MTPA).

This will besupported by overall economic growth and rising demand from the housing and infrastructure sectors.

The company aims to increase its market share from the current 14% to 20% by FY28.

It attributes this growth momentum to the government's infrastructure push in the FY25 budget outlay, expecting these measures to boost cement demand.

For further information about the company, you can check out its financial factsheet and quarterly results.

#3 Route Mobile

Third in the list is Route Mobile.

Route Mobile Ltd, which operates on cloud communication platforms, saw a significant 25.11% rise in its promoters' stake, mainly from Proximus Opal, despite reductions in foreign institutional investors (FIIs).

This movement highlights a transition in strategy and increased assurance among business stakeholders about the substantial prospects for expansion within the company.

Route Mobile is currently priced at Rs 1503, with a market capitalisation of Rs 94.3 bn.

In Q1FY25, there was a 10.08% decrease in FII holding and a 25.11% increase in promoter holding. Proximus Opal, as a promoter, now holds an 83.11% stake in the company.

Among the FIIs, Theleme Master Fund, Government Pension Fund Global, Theleme India Master Fund Limited, and Pinebridge Global Funds have off-loaded their stakes last quarter.

Route Mobile Financial Snapshot (2020-24)

	FY20	FY21	FY22	FY23	FY24
Revenue Growth (%)	13%	47%	42%	78%	13%
Gross Profit Margin (%)	20%	20%	21%	22%	21%
Operating Profit Margin (%)	11%	12%	11%	12%	13%
Net Profit Margin (%)	6%	9%	8%	9%	10%
Return on Capital Employed (%)	29%	33%	17%	22%	21%
Return on Equity (%)	22%	20%	10%	18%	18%

Data Source: Screener.in

Route Mobile demonstrated industry-leading revenue growth of 14% YoY and 8.5% sequentially. The company processed over 37 bn billable transactions in Q1, the highest quarterly volume to date.

Profit after tax improved by 1.5% YoY to Rs 931 m. However, the PAT margin declined from 9.5% in Q1 FY24 to 8.4% in Q1 FY25 due to an increase in the effective tax rate.

The company is working on expanding into markets such as Indonesia, Cambodia, the Philippines, Malaysia, Africa, and Mexico, with aspirations to achieve US$ 1 bn in revenue in the next two to three years.

Additionally, Route Mobile is working on large partnerships, including one with Microsoft, to drive revenue growth. The company has a positive outlook on new products like RCS and WhatsApp for further revenue growth.

Going ahead, Route Mobile expects revenue growth to be in the 18% to 22% range for FY25.

For further information about the company, you can check out its financial factsheet and quarterly results.

#4 Poly Medicure

Fourth in the list is Poly Medicure.

Poly Medicure Limited, an Indian manufacturer and exporter of medical devices, is trading at Rs 1,855 with a market capitalisation of Rs 178 bn.

During Q1FY25, there was a 2.46% decrease in FII holding and a 12.88% increase in promoter holding. Ezekiel Global Business Solutions LLP, as a promoter, bought shares, while Lighthouse India III Equity Investors Limited sold its stake.

Poly Medicure Financial Snapshot (2020-24)

	FY20	FY21	FY22	FY23	FY24
Revenue Growth (%)	13%	14%	17%	21%	23%
Gross Profit Margin (%)	75%	73%	69%	71%	65%
Operating Profit Margin (%)	24%	28%	23%	24%	26%
Net Profit Margin (%)	14%	17%	16%	16%	19%
Return on Capital Employed (%)	22%	14%	14%	14%	18%
Return on Equity (%)	25%	22%	17%	18%	23%

Data Source: Screener.in

Poly Medicure reported a revenue increase from Rs 3.2 bn to Rs 3.8 bn, marking a 20% growth.

The PAT improved from Rs 627 m to Rs 740 m, an 18% YoY increase. The company is on track to achieve its guidance of 22% to 24% revenue growth.

The board has approved raising up to Rs 10 bn through the QIP process for capex and technology enhancement. Poly Medicure is planning to set up new facilities in Jaipur, Haridwar, and the outskirts of Faridabad.

The company is focused on expanding product lines and exploring new therapeutic segments, with aspirations to achieve an operating margin exceeding 30% in the future.

For further information about the company, you can check out its financial factsheet and quarterly results.

# 5 Adani Green Energy

Fifth in the list is Adani Green Energy.

Adani Green Energy Limited, a renewable power generation company, has a current market price of Rs 1,772 and a market capitalisation of 2.8 tn.

In Q1FY25, FII holding decreased by 1.24% while promoter holding increased by 1.14%. Ardour Investment Holding Ltd and Adani Tradeline Private Limited bought the stake as promoters.

Adani Green Energy Financial Snapshot (2020-24)

	FY20	FY21	FY22	FY23	FY24
Revenue Growth (%)	24%	23%	64%	51%	19%
Gross Profit Margin (%)	99%	97%	100%	100%	100%
Operating Profit Margin (%)	57%	72%	68%	64%	79%
Net Profit Margin (%)	-3%	6%	10%	13%	14%
Return on Capital Employed (%)	8%	10%	8%	8%	10%
Return on Equity (%)	-3%	8%	19%	13%	17%

Data Source: Screener.in

Adani Green Energy reported a 24% YoY increase in revenue from power supply, reaching Rs 25.3 bn.

The company is targeting to commission an additional 6 gigawatts of capacity in FY25 and aims to have 15% of its total installed capacity in merchant and commercial & industrial (C&I) projects.

Adani Green Energy is focusing on a mix of wind, solar, and pumped storage projects to maximise revenue and is also exploring opportunities in carbon markets and renewable energy certificates.

The company expects to optimise revenue through its diversified approach involving solar, wind, and pumped storage projects.

For further information about the company, you can check out its financial factsheet and quarterly results.

Conclusion

The notable rise in promoter holdings across various companies indicates a strong belief in their future growth.

Despite a decline in FII stakes, these changes reflect strategic shifts and increased confidence among promoters in their companies' prospects.

However, it's important to note that increased promoter holdings alone do not guarantee future performance, as market conditions and company-specific risks could still impact results.

Investors should evaluate these opportunities judiciously, considering all relevant factors before making investment decisions.

Happy Investing!

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...