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Leel Electricals is a manufacturer of heat exchanger and evaporator coils serving the spectrum of heating, ventilation, airconditioning (AC) and refrigeration industry. 

The company also provides customised AC solutions for institutional clients, such as railways, defence and metro rails. The company had developed a new production range of plate heat exchangers for air-conditioning units KLM02 to KLM31 at Czech Republic. It has also entered into the retail segment by acquiring rights, titles and interest in the Lloyd Blue Logo, etc.

The company also developed a range of room airconditioners ranging from two/ three/five star ratings, and lower diameter coils and natural refrigerants like carbon-dioxide coils for the refrigeration industry. The company is also in the business activities of consumer durables, heat exchangers & components, OEMs and packaged airconditioning. The company diverted nearly Rs.340 crore to promoter entities, including the listed debt-laden entity Fedders Electric as capital expenditure and loans for buying land and factories of their own plants. Also, a complaint was filed with SEBI after attempting to engage the company’s management, seeking a forensic audit of LEEL Electricals. In the two months after this complaint, there have been several top level exits from the company.The company has not reported its financials for quarter ended December 2018. Thus, EXIT.

Orient Paper and Industries is a member of one of the premier business houses in India, the C K Birla Group. The C K Birla Group has promoted and established a large number of industrial undertakings manufacturing a diverse range of products such as automobiles, earthmoving equipment, engineering products, ball bearings, building materials, chemical plants, software development, etc. The company is also engaged in the business of paper, electrical consumer durables. On the financial front, the company reported net sales of Rs.189.68 crore for the quarter ended December 2018, up 12.44 per cent from Rs.168.7 crore in December 2017. 

The company reported net profit of Rs.20.85 crore in December 2018, up 98.56 per cent from 10.5 crore in December 2017. The paper industry has witnessed a turnaround in fortunes since FY17. The domestic paper demand has remained strong on the back of the closure of stressed domestic capacities, which led to supply constraints. The industry received a further tailwind as raw material prices and power prices trended southwards. Domestic paper production is expected to rise to 39.7 million tonnes (MT) from 16.7 million tonnes (MT) in 2016-17 in line with the rising demand, according to Indian Paper Manufacturer Association (IPMA). By virtue of the above factors, we recommend a HOLD.

Jain Irrigation Systems, Ltd. is an India-based company, which produces and markets integrated agricultural products. The company offers a range of products like micro irrigation systems and components, drip and sprinkler irrigation systems and components, PVC, polyethylene (HDPE, MDPE) and polypropylene piping systems, plastic sheets (PVC and PC sheets), dehydrated onions and vegetables, processed fruits, tissue culture, hybrid and grafted plants, greenhouses, poly and shade houses, bio-fertilizers, solar water heating systems and solar photovoltaic appliances (solar lighting systems). The company is also in the business segment of industrial products, non-conventional energy, hi-tech agri input products. 

On the financial front, the company posted net sales at Rs.2,037.69 crore in Q3FY19 from Rs.1,865.64 crore posted in Q3FY18, thus witnessing a 9.22 per cent growth. The profit before interest, depreciation and tax came in at Rs.222.17 crore in Q3FY19, posting an expansion of 12.12 per cent from Rs.198.16 crore reported in the same quarter of the previous year. The profit after tax (PAT) came in at Rs.91.11 crore in Q3FY19 as against Rs.66.75 crore in Q3FY18, posting a 36.49 per cent rise on a YoY basis. On the annual front, the company reported net sales for FY18 at Rs.7,946.76 crore, posting an increase of 17 per cent from Rs.6,769.78 crore posted in FY17. The PBIDT came in at Rs.1111.78 crore in FY18 as compared to Rs.1000.62 crore in FY17, representing a 11 per cent growth. The PAT was Rs.217.67 crore in FY18, signifying a growth of 25 per cent as compared to Rs.173.8 crore in FY17. 

On the valuation front, the stock is trading at price-to-earnings ratio of 10.99 times with EPS of Rs.5.45 on TTM basis. The return on equity stood at 5.12 per cent and the return on capital employed was 9.11 per cent. We would recommend a HOLD to our reader-investors as we believe the company would deliver better results in the upcoming quarter and the stock could gain some significant movement post results. Thus, HOLD.

Eicher Motors Ltd is engaged in the manufacture of commercial vehicles, motorcycles and engineering components. The product range of the company includes motors- manufactures several kinds of commercial vehicles, motorcycles- manufactures Bullet and Royal Enfield motorcycles, engineering components- manufactures complete range of automotive gears. 

The range of gears includes spiral bevels (crown wheel and pinions), straight bevels and transmission gears. On the consolidated financial front, in Q3FY19, the net sales were reported at Rs.2,328.25 crore, up by 3.45 per cent from Rs.2,250.65 crore in the same quarter of the previous year. The PBIDT however fell by 3.91 per cent to Rs.673.53 crore in Q3FY19 as in the same quarter of the previous year it was reported at Rs.707.21 crore. The profit after tax (PAT) came in at Rs.491 crore, up by 7.17 per cent in Q3FY19 from Rs.458 crore posted in Q3FY18. On the annual front, the company posted net sales of Rs.8,964.96 crore, up by 27 per cent in FY18 from Rs.7,033.36 crore in FY17. The PBIDT was Rs.3,087.73 crore, showing an increase of 29 per cent in FY18 as against Rs.2,401.28 crore posted in FY17. The PAT in FY18 was Rs.1,923.16 crore as compared to Rs.1,523.61 crore the previous year, thus showing a growth of 26 per cent. 

On the valuation front, the stock is trading at price-to-earnings ratio of 27.39 times with EPS of Rs.776.84 on TTM basis. The return on equity stood at 31.35 per cent and the return on capital employed was at 45.33 per cent. Eicher Motors’ twowheeler division,Royal Enfield has planned capital expenditure of Rs.700 crore for FY 2019-20. The planned capex will include completion of the construction work of the Technology Centre, Phase-2 of the Vallam Vadagal plant in Tamil Nadu and the development of new platforms and products. Also, for 2019-20, Royal Enfield plans production of 950,000 motorcycles. After studying the company and the industry, we would recommend a SELL due to the slowdown in the automotive industry.

Jiya Eco Products Ltd. is engaged in manufacturing and distributing of bio-fuel and biomass pellets, which are used as alternative source of energy and to replace fairly good substitutes of traditional fossil fuels such as coal, firewood and lignite. The company is a manufacturer of bio-fuel products such as bio briquettes and bio-pellets, which are alternatives source of energy. It is the only listed company which is engaged in such kind of business. It produces bio-fuel out of agricultural and forest waste, which is a substitute of fossil fuel like coal, lignite, firewood, diesel, LDO, gas, PNG, etc. which are used in industries or for retail purposes. 

The company has recently improved its plant in Navagam and added two new lines of pellets resulting in four lines of briquettes and six lines of pellets. On the expansion front, the company has planned greenfield expansion at Gandhidham to cater to retail customers with rated capacity of ~2,60,000 MTPA. It is likely to commence production by February 2019. The plant was delayed due to non-availability of the power supply. Moreover, it is planning a pellet plant in Ankaleshwar, which is likely to commence by Q1FY20E. To further diversify the portfolio, the company has entered into serving ceramic manufacturers with pellet fired boilers, which would result in reduction of manufacturing cost by 30-50 per cent. The company’s newly launched product ‘processed agri waste’ has gained traction and has already sold 48,000 MT in Q3FY19. It has contributed ~48 per cent to the total revenue in the recent quarter. 

The company’s revenue grew significantly by 123 per cent CAGR and its net profit registered 161 per cent CAGR over the last five years. Its Q3FY19 consolidated revenue jumped by 66 per cent YoY and volumes were up by 96 per cent. The operating profit jumped by 93 per cent YoY led by decline in raw material cost by around 11 per cent. Its profit jumped significantly by 114 per cent YoY on overall improved performance. We recommend a HOLD looking at the abovementioned factors.

CCL Products (India) Limited is engaged in manufacturing of instant coffee. The company operates through the coffee and coffee related products segment. It is engaged in the manufacture of soluble instant spray dried coffee powder, spray dried agglomerated/granulated coffee, freeze-dried coffee and freeze concentrated liquid coffee. The company’s products include spray dried coffee granules, freeze-dried coffee granules and freeze the concentrated liquid. It supplies flavoured coffee, decaffeinated coffee, organic coffee, rainforest coffee, fair trade coffee, dual and triple certified coffee, and chicory-coffee mix. The company’s brands include Continental Special, Continental Premium and Continental Supreme. It offers coffee in various sizes of jars, cans and sachets or pouches, among others. The company’s soluble instant coffee manufacturing plant has a combined capacity of 35,000 metric tonnes per annum. It also has a freeze dried instant coffee manufacturing plant. On the financial front, the net sales for the company stood at Rs.234.08 crore in December 2018, down 14.57 per cent from Rs.273.99 crore in December 2017. The net profit for the company stood at Rs.32.61 crore in December 2018, down 19.33 per cent as against Rs.40.42 crore in December 2017. On the annual front, the net sales in FY18 came in at Rs.1,136.67 crore, up by 16 per cent from Rs.976.49 crore posted in FY17. The PBIDT was Rs.243.74 crore in FY18 as compared to Rs.233.34 crore posted in FY17,representing a 4 per cent increase. The PAT came in at Rs.148.13 crore in FY18, an increase of 10 per cent from Rs.134.56 crore in FY17. 

On the valuation front, the stock is trading at price-to-earnings ratio of 21.57 times with EPS of Rs.12.52 on TTM basis. The return on equity stood at 21.65 per cent and the return on capital employed was at 23.02 per cent. CCL’s expertise lies in making consistent coffee blends which have resulted in long-standing relationships with clients and stickiness in business. CCL’s sales growth of 17% is likely to be led by its recently set up 5,000 MT freeze-dried unit in Andhra Pradesh. By virtue of the above factors, we recommend a HOLD.

 

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