Reviews

Kiran Dhawale

We had recommended Vascon Engineers in volume 33 issue no. 12, dated May 14 – 27, 2018, under the ‘Low Priced Scrip’. The stock was trading at Rs 32.55 when the scrip was recommended backed by the revival in its financials and the positive sector outlook. 

Vascon Engineers Limited is an engineering, procurement and construction (EPC) company engaged in real estate development, hospitality, and manufacturing and building management system (BMS). The company’s segments include EPC, real estate development, hotel and manufacturing and BMS. The EPC segment includes the construction of residential, commercial, industrial and other constructions. The real estate development segment includes the development of residential, hotel premises and industrial park

On the financial front, the company has posted 84 per cent growth in its net sales at Rs 105.86 crore for Q4FY18 versus Rs 57 for the same quarter of the previous fiscal. Its PBDT stands at Rs 8 crore for Q4FY18, posting approximately 300 per cent growth for the quarter against Rs 2.65 crore accrued in the same quarter of the previous year. In terms of net profit, the company has witnessed increase of over 200 per cent YoY at Rs 5.94 crore in Q1FY19 as against Rs 1.90 crore in the same quarter of the previous year. On the annual front, the company’s net sales increased by 55 per cent and stand at Rs 335.35 crore in FY18 as against Rs 216 crore in FY17. The PBDT has grown by 38 per cent to Rs 18.93 crore in FY18 versus Rs 13.10 crore in previous fiscal. 

Since our recommendation, the stock price has fallen around 13 per cent, but is expected to move upwards due to the financial performance of the company. Hence, we recommend a HOLD. 

We had recommended NR Agarwal in ‘Special Report’ segment in volume 33 no. 11, dated April 30 – May 13, 2018. The stock was then trading at Rs 520.25. Our recommendation was based on the headroom for growth in paper due to low per capita consumption of paper in India as well as due to the increasing demand from the burgeoning FMCG and packaged food industry. 

N R Agarwal Industries Limited is engaged in the manufacture of paper, paper boards as well as newsprint. The company is also involved in duplex boards, and writing and also printing business. It is engaged in the development and manufacturing of finished paper products by recycling of waste paper and marketing in domestic and international markets. 

On the financial front, the company has posted a 15 per cent growth in its net sales for Q1FY19 at Rs 332 crore versus Rs 288 crore recorded in Q1FY18. Its PBDT has jumped up by 66 per cent to Rs 45.51 crore in Q1FY19 as against Rs 27.71 crore in the same quarter of the previous fiscal. The net profit on a YoY basis has grown by 38 per cent at Rs 29.04 crore versus Rs 21.42 crore in Q1FY18. 

On an annual basis, the net sales stood at Rs 1,226.17 crore in FY18 posting a growth of 17 per cent as against Rs 1040.54 crore in FY17. The PBDT of the company has increased by 26 per cent in FY18 to Rs 123.33 crore versus Rs 97 crore in FY17. 

The net profit of the company recorded in FY18 was Rs 90 crore, up by 28.57 per cent as against Rs 70.23 crore in FY18. 

After our recommendation, the stock has fallen by approximately 11 per cent, but the financial performance of the company shows a growing pattern. Hence, a HOLD is recommended for our reader-investors.

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