Reviews

In this edition, we have reviewed Kriti Nutrients and Shriram Transport Finance Company. We suggest our reader-investors to HOLD Kriti Nutrients and Shriram Transport Finance Company 

We had recommended Kriti Nutrients in Volume 33, Issue No. 13, dated May 28–June 10, 2018, under the ‘Low Price Scrip’section. The stock of the company was then trading at Rs 37. We had recommended the stock looking at the revival in the financials, positive sector outlook and its pick-up in order book. Kriti Nutrients Limited is engaged in soya seed extraction and manufacturing and selling of cooking oil under its own brand Kriti. The company’s primary products include soya lecithin flakes and flour and soya crude oil/refined oil. It has a manufacturing set-up, which includes solvent extraction plants, vegetable oil refinery, lecithin plant, effluent treatment plant, fluidised bed boilers and an in-house tin and jar manufacturing facility. 

On the financial front, the net sales of the company have grown by 24.32 per cent to Rs 138.066 crore in Q1FY19 versus Rs 111.06 crore in the same quarter of the previous year. The PBIDT of the company stood at Rs 10.75 crore in Q1FY19 and witnessed a rise of 67 per cent YoY from Rs 6.404 crore. The profit after tax (PAT) too had a tremendous growth of more than 90 per cent YoY to Rs 6.038 crore in Q1FY19 versus Rs 3.164 crore. 

On the annual front, the net sales have more or less remained stable and increased to Rs 460 crore in FY18 as against Rs 456.54 crore in FY17. The PBIDT of the company in FY18 was Rs 32.95 crore, showing a growth of 96 per cent from Rs 16.76 crore in FY17. The company has witnessed over 100 per cent increase to Rs 15.79 crore in FY18 as against Rs 6.29 crore in the previous fiscal. 

Since our recommendation, the share price has fallen by 4 per cent approximately. The stock is likely to recover as is evident from the financials. Hence a HOLD is recommended. 

We had recommended Shriram Transport Finance Company in Volume 33, Issue No. 17, dated July 23–August 5, 2018, under the ‘Analysis’ segment. The stock was trading at Rs 1235.85 then and was recommended because it demonstrated healthy financials, robust growth in AUMs and stabilising asset quality. 

Shriram Transport Finance Company Limited (STFC) is an asset financing non-banking finance company. The company is engaged in providing finance for commercial vehicles. The company operates through financing segment. The company operates through a network of approximately 850 branches. It is engaged in pre-owned commercial vehicle (CV) financing business. It services include lendings and deposits. Shriram Automall India Limited is the company’s subsidiary. On the financial front, the company’s net sales have improved by 19.79 per cent to Rs 3732.45 crore in Q1FY19 as against Rs 3115 crore in Q1FY18. The PBIDT of the company has also grown by 21 per cent in Q1FY19 to Rs 572.9 crore, while in the same quarter of the previous year it was Rs 460.02 crore. 

The profit after tax (PAT) of the company has moved up by 24 per cent YoY to Rs 572.9 crore in Q1FY19 as against Rs 460 crore. On an annual basis, the company has recorded 12 per cent growth in net sales to Rs 12201.66 crore in FY18 versus Rs 10828.75 crore in FY17. The PBIDT of the company stood at Rs 7682 crore in FY18, up by 7.03 per cent from Rs 7177 crore. The profit after tax (PAT) grew by 24 per cent in FY18 and stood at Rs 1568.02 crore, while in the previous fiscal, it was Rs 1257.34 crore. 

Since our recommendation, the share price has dipped by about 18 per cent. We would recommend a HOLD as the coming quarters are likely to witness improved performance by the company