Query Board

JK TYRES 

I have 1250 shares of J K Tyres purchased at Rs 161. Please suggest what to do. 

- Arup Kumar Ray 

JK Tyre & Industries is engaged in the manufacture of tyres, tubes and flaps. It offers a range of tyres, including passenger car tyres, two and three-wheeler tyres, commercial tyres, farm tyres and off-the-road tyres. Its commercial tyres include truck/ bus bias tyres, truck/bus radial tyres, light commercial vehicle tyres and small commercial vehicle tyres. On the financial front, the net sales of the company has gone up by 31.20 per cent to Rs 1887.32 crore in Q1FY19 as against Rs 1483.52 crore in Q1FY18. The PBIDT of the company has seen a turnaround from just Rs 2.26 crore in Q1FY18 versus Rs 219 crore in the latest quarter Q1FY19. The profit after tax has also seen a turnaround at Rs 67.64 crore in Q1FY19 as against a negative PAT of Rs 65.86 crore recorded in the same quarter of the previous year. On an annual basis the net sales of the company stood at Rs 6453.35 crore in FY18 as against Rs 5979.12 crore in FY17, a growth of 7.9 per cent. The PBIDT of the company in FY18 stood at Rs 519.7 crore as against Rs 805.62 crore in FY17, a drop of 35 per cent. The PAT too has fallen to Rs 43.09 crore as against Rs 332.13 crore in the previous financial year. Although the company’s annual performance seems unpleasant, the company has shown a good financial performance YoY and is on the verge of improvement as well. Thus, we recommend our investor-readers to HOLD the stock. 

YES BANK 

Please let me know if it is the right time to buy into Yes Bank 

- Mahesh 

Yes Bank is engaged in providing banking services, including corporate and institutional banking, financial markets, investment banking, corporate finance, branch banking, business and transaction banking and wealth management On the financial front, the interest earned in Q1FY19 stood at Rs 6578.04 crore as against Rs 4653.8 crore earned in the same quarter of the previous fiscal, thereby posting a 41.45 per cent growth YoY. The total income of the bank has also gone up 42.97 per cent to Rs 8272.18 crore in Q1FY19 from Rs 5785.96 crore in Q1FY18. The profit after tax (PAT) has risen by over 30 per cent in Q1Fy19 to Rs 1260.36 crore as against Rs 965.52 crore in Q1FY18. On the annual front, the interest earned posted by the bank for the FY18 was Rs 20,267.42 crore, an increase of 23.39 per cent over Rs 16424.64 crore earned in FY17. The total income in FY18 was Rs 25,491.26 crore, a growth of 23 per cent from Rs 20,581 crore in FY17. The PAT for FY18 was Rs 4224.56 crore, up by 26 per cent versus Rs 3330.10 crore in FY17. On the valuation front, the company is currently trading at a PE multiple of 11.86. Its RoE stood at 17.67 per cent and RoCE stood at 7.42 per cent. Based on the financial data and the fact that the bank has sailed through the tough times as well as paid dividends consistently, we would recommend a HOLD . 

BRITANNIA INDUSTRIES 

I bought 50 shares of Britannia Industries at Rs 6736. Kindly suggest whether i should hold or sell this stock. 

- Raman Jaisankar 

Britannia Industries Limited is a food company engaged in the manufacture of biscuits, cakes and rusks. The company operates through the foods segment, which comprises of bakery and dairy products. The company’s product brands under the biscuits’ category include Good Day, Crackers, NutriChoice, Marie Gold, Tiger, Milk Bikis, Jim Jam + Treat, Bourbon, Little Hearts, amongst many others. Its products under breads include whole wheat breads, white sandwich breads and bread assortment. Its products under dairy category include cheese, fresh dairy and accompaniments. Its products under cakes category include bar cakes, veg cakes, chunk cake, nut and raisin cake and Mufills. Its product under rusk category includes Premium Bake

On the financial front the net sales of the company has moved up by 10.85 per cent to Rs 2386.89 crore in Q1FY19 as against Rs 2153.26 crore in Q1FY18. The PBIDT of the company grew 17.56 per cent to Rs 367.73 crore in Q1FY19 while in the same quarter of the previous year it was Rs 312.8 crore. The profit after tax (PAT) in Q1FY19 stood at Rs 246.24 crore reflecting a growth of 17.99 per cent as against Rs 208.69 crore in Q1FY18.

On an annual basis, the company has witnessed a 10 per cent growth in terms on net sales, which stood at Rs 9304.06 crore in FY18 as against Rs 8414.37 crore in FY17. The PBIDT of the company has also increased by 16 per cent to Rs 1566.41 crore in FY18 versus Rs 1348.69 in the previous financial year. The profit after tax (PAT) has risen by 12 per cent in FY18 to Rs 947.89 crore versus Rs 843.69 crore in FY17.

On the valuation front, the company is currently available at A PE of 63.66x. The return on equity (RoE) stood at 32.90 per cent and the return on capital employed stood at 47.47 per cent. The company has reflected a positive growth in financial terms and we reckon that it would continue to do so in the coming quarters. Therefore, we advise the investor-readers to HOLD the stock 

FLEX FOODS 

I am holding 10,000 shares of Flex Foods at an average price of Rs 85.15. What should I do? What is the future of this company? Please share some insights. 

- Aniket Agshikar 

Flex Foods Limited, a part of the Uflex group, is engaged primarily in the business of cultivation and processing of mushrooms, herbs, fruits and vegetables in freeze-dried, air-dried and individually quick-frozen form. The company sells its products mainly to the European and the United States markets. Its principal products are freeze-dried mushroom, herbs, vegetables and fruit; frozen fruits, vegetables, mushroom and herbs, and processed food namely mushroom fresh and processed (including canned). Its products include thyme, basil, parsley, dill, mint and oregano. The company deals in its own captive mushroom growing facility with fully-equipped mushroom spawn and compost preparation facilities. It has operations in the United States, Europe, Asia and others. The company has an export oriented unit (EOU) for vacuum freeze-dried vegetables, mainly mushroom and culinary herbs with a total processing capacity of 2,000 metric tonnes per annum.

On the financial front, the company’s net sales in the first quarter of FY19 stood at Rs 22.16 crore, marginally up by 2.69 per cent versus Rs 21.58 crore in the same quarter of the previous year. The PBIDT of the company has surged by 24.31 per cent and stood at Rs 5.37 crore versus Rs 4.32 crore in Q1FY18. The profit after tax has jumped 66 per cent in Q1FY19 to Rs 2.89 crore as against Rs 1.47 in Q1FY18.

On the annual front, the net sales of the company has gone up 7 per cent in FY18 to Rs 91.07 crore as against Rs 85.15 crore in FY17. The PBIDT on the other hand has gone slightly down by 5 per cent and stood at Rs 19.33 crore in FY18 versus Rs 20.91 crore in FY17. The profit after tax (PAT) has also gone down by 13 per cent and stood at Rs 6.81 crore in FY18 as against Rs 7.85 in FY17.

On the valuation front, the company is currently available at a PE of 11.26x. The return on equity (RoE) stood at 8.80 per cent and the return on capital employed (RoCE) stood at 12.86 per cent. Keeping in mind the abovementioned factors, we recommend our reader-investors to HOLD the stock. 

DHFL 

Is it right time to invest in DHFL now and hold for the long term ? Kindly advise. 

- Solanki Dewan 

Housing Finance Corporation Limited is a housing finance company. The company focuses on providing financing to the lower and middle-income segments in India. It offers housing loan as well as non-housing loans. It offers loans for construction or purchase of residential property and loans against property. The company has presence in approximately 349 locations. It offers a range of home loan products, such as home loan, home extension loan, home improvement loan, plot loan, mortgage loan, small and medium enterprises (SME) loan, project loan and nonresidential property loan.

On the financial front, the company’s net sales has gone up by 26.19 per cent to Rs 3149.67 crore in first quarter of FY19 versus Rs 2495.94 crore in same quarter of FY18. The PBIDT of the company rose by 24 per cent and stood at Rs 2833.5 crore in Q1FY19, while in the same quarter of the previous year, it was Rs 2276.33 crore.

In annual terms, the company posted net sales of Rs 10450.16 crore in FY18, up by 18 per cent as against Rs 8851.76 crore in FY17. The PBIDT of the company in FY18 grew up by 15 per cent and stood at Rs 9500.43 crore versus Rs 8254.63 crore in FY17. The PAT has however gone down by over 50 per cent and stood at Rs 1172.13 crore versus Rs 2896.45 crore in FY17.

On the valuation front, the company is currently available at a PE of 6.26x. The return on equity (RoE) stood at 13.97 per cent and the return on capital employed (RoCE) stood at 9.78 per cent. The company has been showing consistent profit growth of 21.45 per cent in the period of last five years. The company has been maintaining a healthy dividend payout of 17.02 per cent.

Based on the above observations, the company is likely to perform better in the coming quarters. Therefore, we urge our investor-readers to HOLD the stock. 

BAID LEASING COMPANY 

I have 50 shares of Baid Leasing Company Ltd bought at Rs 298.85.This stock is making lower cap from two working session and now its LTP is Rs 251. Please guide me what I should do? 

- Abhay 

Baid Leasing and Finance Co. Ltd. is an India-based non-banking finance company. The company is engaged in the business of vehicle financing and loan against mortgage of property. The company is also engaged in hire purchase, leasing, lending, securities investments and trading, and negotiable instruments. The company finances medium commercial vehicles (MCVs), light commercial vehicles (LCVs), multi-utility vehicle (MUVs), cars and three-wheelers. Apart from financing new vehicles, the company also refinances loans available for used and pre-owned vehicles of various kinds and brands. The company also offers small and medium enterprises (SME) loans. The company caters to micro entrepreneurs for augmentation of their business activities. 

On the financial front, the company’s net sales have increased by over 60 per cent to Rs 14.43 crore in Q1FY19 as against Rs 8.79 crore in the same quarter of the previous year. The PBIDT of the company has also increased by 56 per cent to Rs 8.86 crore in Q1FY19 versus Rs 5.67 crore in the same quarter of FY18. The profit after tax (PAT) has also surged by 27.85 per cent and stood at Rs 2.107 crore in Q1FY19 as against Rs 1.64 crore in Q1FY18. 

On the annual front, the company’s net sales have gone up 43 per cent in FY18 to Rs 40.85 crore as against Rs 28.50 crore in FY17. The PBDT has moved on similar lines with the net sales, as it has gone up by over 40 per cent to Rs 8.52 crore in FY18 while in FY17 it was Rs 5.92 crore. The net profit of the company has gone up to Rs 5.67 crore in FY18 as against Rs 3.97 crore in FY17, a growth of 42 per cent.

On the valuation part, the company is currently available at a PE of 36.26x. The return on equity (RoE) stood at 14.87 per cent and the return on capital employed (RoCE) was 15.18 per cent. Based on the strong financials, we would like our investorreaders to HOLD the stock and reap the benefits.