Query Board
GMR INFRASTRUCTURE LIMITED
I bought GMR Infrastructure at Rs 17.60. Should I hold or sell ?
- Jayprakash
GMR Infrastructure Limited (GIL) is engaged in generating power, mining and exploration activities, development of highways, infrastructure development such as development and maintenance of airports.
On the financial front, the net sales of the company grew by approximately 48 per cent and came in at Rs 165.34 crore in Q2FY19 as against Rs 111.67 crore in the Q2FY18. The profit before interest, depreciation and tax (PBIDT) stood at Rs 83.8 crore, posting a 2.38 per cent fall from Rs 85.84 crore in Q2FY18. The net loss of the company has narrowed down to Rs 106.62 crore in Q2FY19, from Rs 276.41 crore accrued in the same quarter of the previous year. On an annual basis, the net sales of the company has remained stable and stood at Rs 1106.01 crore, posting a 6 per cent drop in FY18 as against Rs 1179.77 crore in FY17. The PBIDT of the company has also plunged by over 50 per cent and came in at Rs 347.30 crore in FY18, while in the previous fiscal, it was Rs 731.01 crore. The company’s net loss has narrowed and stood at Rs 1930 crore in FY18 as against Rs 3684 crore in FY17.Looking at the financial performance of the company, we recommend reduction in exposure by 50 per cent and holding the rest. Therefore, we advise a HOLD to our reader-investors.
PRAXIS HOME RETAIL LIMITED
Can I buy Praxis Home Retail for the long time horizon?
- Alokmay Jana
Praxis Home Retail is focused on offering assortment of products in furniture, homeware, customized solutions in kitchen and wardrobes and home improvement. The company operates through two segments: brick and mortar home retail segment and online home retail segment. It offers under one roof a range of furniture, home furnishing goods, design and build, other home related products and services, including complete home design, modular kitchen, flooring, tiles, plumbing, and wallpaper among others. HomeTown has a pan-India presence with 37 stores across 21 cities in 11 states. On the financial front, on a standalone basis, the company posted a 90 per cent growth in its net sales at Rs 183.18 crore in Q2FY19 as against Rs 95.91 crore in the same quarter of the previous year. The profit before interest, depreciation and tax (PBIDT) came in at Rs 1.71 crore in Q2FY19, posting a 137 per cent growth from Rs 0.72 crore in Q2FY18. The profit after tax (PAT) posted by the company in Q2FY19 was Rs 1.06 crore, a jump by 179 per cent from Rs 0.38 crore in the corresponding quarter of the previous year. Meanwhile, on the annual front, the company’s net sales for FY18 came in at Rs 380.54 crore as against Rs 6.65 crore in FY17. Looking at the financial performance of the company, we recommend our reader-investors to EXIT the stock as there is nothing substantial to look up to.
INFOSYS LIMITED
I have 40 shares of Infosys bought at Rs 703. Should I hold them or not?
- Udit Maheshwari
Infosys Limited is engaged in consulting, technology, engineering and services. The company, along with its subsidiaries, provides business information technology services comprising application development and maintenance, independent validation, infrastructure management, engineering services comprising product engineering and life cycle solutions and business process management. Its end-toend business solutions include consulting and systems integration comprising consulting, enterprise solutions, systems integration and advanced technologies; business information technology (IT) services consisting application development and maintenance, independent validation services, infrastructure management, engineering services comprising product engineering and life cycle solutions and business process management; products, business platforms and solutions, including Finacle, its banking product, which offers solutions to address core banking, mobile banking and e-banking needs of retail.
On the financial front, on a consolidated basis, the company posted 17.32 per cent growth in net sales, which stood at Rs 20609 crore in Q2FY19 compared to Rs 19128 crore in Q2FY18. The profit before interest, depreciation and tax (PBIDT) jumped 13.93 per cent in Q2FY19 and stood at Rs 5357 crore as against Rs 4703 crore in the same quarter of the previous year. The profit after tax (PAT) grew 10.31 per cent on a YoY basis and came in at Rs 4110 crore in Q2FY19 versus Rs 3726 crore in Q2FY18.
On the annual front, the net sales grew marginally by 3 per cent and came in at Rs 70522 crore in FY18 as against Rs 68484 crore in FY17. The profit before Iinterest, depreciation and tax (PBIDT) of the company grew by 2 per cent to Rs 22204 crore in FY18 as against Rs 21684 crore in FY17. The profit after tax (PAT) accrued in FY18 was Rs 16100 crore, posting a 12 per cent growth from Rs 14383 crore in FY17. Looking at the growth trajectory and the positive financial performance of the company, we recommend a HOLD to our reader-investors.
CEAT LIMITED
I hold 140 shares of CEAT Ltd. since June 2018 purchased at Rs 1398. Could you please advice if I should hold the stock or exit?
- Milind Sakpal
CEAT Limited is engaged in the manufacture and sale of automotive tyres, tubes and flaps. The company manufactures radials for a range of vehicles. It offers products for light commercial vehicles (LCVs), motorcycles, scooters, cars, farm vehicles and trailers, etc. It has a capacity to produce approximately 95,000 tyres per day.
On the financial front, on a consolidated basis, the company posted a 15.21 per cent growth in terms of net sales on a YoY basis and in Q2FY19, it stood at Rs 1754.61 crore as against Rs 1523.03 crore in the corresponding quarter of the previous year. However the profit before interest, depreciation and tax (PBIDT) of the company went down by 8 per cent in the latest quarter ended September 2018, which stood at Rs 159.24 crore as against Rs174.68 crore posted by the company in Q2FY18.
The profit after tax (PAT) also witnessed a decline of 13 per cent and stood at Rs 57.25 in Q2FY19 as against Rs 66.52 crore in Q2FY18.
On the annual front, the company’s net sales for FY18 stood at Rs 6230.77 crore, a jump of 8 per cent from Rs 5766.51 crore in FY17. In terms of Pprofit before interest, depreciation and tax (PBIDT), the company witnessed a marginal 5 per cent fall and stood at Rs 650 crore in FY18 while in FY17 it came in at Rs 683.25 crore. The PAT however went down by 36 per cent in FY18 and came in at Rs 210 crore from Rs 330.86 crore in FY19. On the valuation front, the company posted a return on equity (ROE) of 10.30 per cent and return on capital employed (ROCE) at 14.77 per cent.The company’s financial performance does not seem to be too strong, but with crude prices slipping from high, it is a positive for CEAT.
We would advise you to exit 20 per cent at the level of Rs 1320 and then hold the rest to exit from time to time as you book profits. Thus we recommend a HOLD.
EDELWEISS FINANCIAL SERVICES
I have 80 shares of Edelweiss Financial Services bought at an average price of Rs 326.95. What should I do? What is the future of this company? Please share some insights.
- Siddendra
Edelweiss Financial Services Ltd is a diversified financial services company in India, providing investment banking, institutional equities, private client broking, asset management and investment advisory services, wealth management, insurance broking and wholesale financing services to corporate, institutional and high net worth individual clients. The company’s business line can be broadly classified as investment banking. The company offers its services to clients who are leading domestic and international institutional investors, including pension funds, hedge funds, mutual funds, insurance companies and banks; asset management - Edelweiss Capital offers a range of investment products and advisory services in the area of risk-return spectrum to individual and institutional investors.
On the financial front on a consolidated basis, the net sales of the company jumped 32.15 per cent YoY and stood at Rs 2616 crore in Q2FY19 as against Rs 1979.72 crore in the same quarter of the previous year. The profit before interest, depreciation and tax (PBIDT) of the company has also risen by 30 per cent and stood at Rs 1645.71 crore in Q2FY19 as against Rs 1275.19 crore in the same quarter of the previous year. In terms of profit after tax (PAT) the company witnessed a jump of 53 per cent as it posted PAT of Rs 276.87 crore in Q2FY19 while in Q2FY18 it was Rs 180.88 crore.
On the annual front, the company posted net sales of Rs 10,586 crore in FY18, posting a 22 per cent decline from Rs 3879.80 crore in FY17. The PBIDT of the company grew 30 per cent to Rs 5059.43 crore in FY18 as against Rs 3859.34 crore in the previous fiscal. The PAT stood at Rs 858.38 crore in FY18, while in FY17 it was 548.48 crore, posting a jump of 57 per cent.
If you are an aggressive investor, then you can average your holding. It should give return in a year-and-half. If you are risk-averse, then exit. Therefore, we would recommend a HOLD.
KINGFA SCIENCE & TECHNOLOGY (I)
Would it be the right time to invest in Kingfa Science & Tech for the long term? Please guide.
- Vishnu Rathore
Kingfa Science & Technology (India) Limited, formerly Hdro S & S Industries Limited, is engaged in the manufacture of modified thermoplastics business. The company operates through reinforced polypropylene segment. The company manufactures and supplies reinforced polypropylene compounds, thermoplastics elastomers and fibre reinforced composites. Its polypropylene is modified by the addition of reinforcements, such as talc, chalk, mica and glass fibre for use as a metal substitute in engineering applications. It manufactures a range of thermoplastic elastomers under the Hyprene brand name.
On the financial front, on a standalone basis, the company posted net sales of Rs 187.04 crore for Q2FY19 as against Rs 139.87 crore, posting a 33 per cent growth. The profit before interest, depreciation and tax (PBIDT) for Q2FY19 fell by 77 per cent to Rs 2.12 crore as against Rs 9.30 crore in the corresponding quarter of the previous year. The profit after tax (PAT) fell by 90 per cent in Q2FY19 as it stood at Rs 0.50 crore versus Rs 5.09 crore in Q2FY18.
On the annual front, the company posted net sales at Rs 601.64 crore in FY18 as against Rs 427.13 crore in FY17, posting a 41 per cent growth. The PBIDT of the company jumped more than 100 per cent and stood at Rs 46.85 crore in FY18 while in FY17 it was Rs 22.92 crore. The profit after tax grew by 100 per cent in FY18 and stood at Rs 24.64 crore as against Rs 12.40 crore in FY17.
On the valuation front, the company is available at a PE multiple of 54.68x on its TTM earnings. The company’s return on equity (RoE) stood at 11.29 per cent and the return on capital employed (RoCE) was 13.27 per cent.
The company’s financial performance on a quarterly basis is deteriorating. We would urge our investor-readers to EXIT the stock keeping in mind the poor performance of the company