Reviews

Review on 2 stock recommended in past.

In this edition, we have reviewed Kanoria Chemicals and Industries and Parag Milk Foods. We suggest our readerinvestors to HOLD in Kanoria Chemicals and Industries and Parag Milk Foods. 

We had recommended Kanoria Chemicals and Industries Ltd. in volume 33, issue no. 21, dated Sept 17-30, 2018, under the Low Priced Scrip. The stock was trading at Rs.69 then and was recommended owing to capacity addition to meet the rising demand, textile division reaching full capacity and the revival in financial performance. 

Kanoria Chemicals & Industries is a leading manufacturer of chemical intermediates in India. The company is engaged in the manufacturing of alco chemicals, chloro chemicals, industrial gases and water treatment chemicals. The company is also in the business of solar power. 

On the financial front, the company posted net sales of Rs.115.25 crore for Q3FY19, up by 30.46 per cent from Rs.88.34 crore in Q3FY18. The PBIDT was Rs.3.94 crore, depicting a fall of 16 per cent in Q3FY19 from Rs.4.72 crore posted in Q3FY18. The company witnessed a net loss of Rs.1.74 crore in Q3FY19 as against a net profit of Rs.0.6 crore in the same quarter of the previous year. 

On the annual front, the net sales came in at Rs.346.81 in FY18, up by 5.94 per cent from Rs.327.37 crore in FY17. The PBIDT in FY18 fell by 53 per cent to Rs.13.18 crore from Rs.28.55 crore in FY17. Its PAT in FY18 was Rs.5.60 crore, down by a whopping 70 per cent from Rs.18.72 crore posted in FY17. Post our recommendation, the stock has fallen by 13 per cent. The company has acquired 10,551.560 additional equity shares in its Ethiopian subsidiary - Kanorla Africa Textiles pic (KATP) by converting loan of USD4 million provided to KATP. Consequent to this, the company’s shareholdlng in KATP has increased from 78.68 per cent to 84.45 per cent. We recommend a HOLD.

We had recommended Parag Milk Foods in volume 33, issue no. 23, dated Dec 24,2018-6 Jan, 2019, under the Cover Story. The stock was trading at Rs.443.05 then and was recommended owing to positive quarterly financial performance, bullish outlook on future prospects and the company’s competitive edge. 

Parag Milk Foods is engaged in the manufacture, distribution, and export of dairy products in India. Its products include double toned and skimmed milk, whole milk powder, ghee, processed cheese, butter, butter oils, curd, etc. The company markets its products directly to hotels, restaurants, institutions, and caterers, as well as through a network of retailers to consumers in India; and exports to the Middle East. 

On the consolidated financial front, the company’s net sales were at Rs.600 crore, up by 15 per cent in Q3FY19, as against Rs.519.28 crore in Q3FY18. Its PBIDT was Rs.62.03 crore in Q3FY19 as against Rs.58.68 crore, portraying a growth of 5 per cent YoY. The PAT was Rs.30.73 crore in Q3FY19, up by 20 per cent from Rs.25.48 crore in the same period of the previous year. On the annual front, the net sales were at Rs.1,918.12 crore in FY18 as against Rs.1,701.09 crore in FY18, a growth of 12.76 per cent in net sales. The PBIDT in FY18 jumped 140 per cent to Rs.185.89 crore as against Rs.77.55 crore posted in FY17. The PAT in FY18 was Rs.78.48 crore as against net loss of Rs.1.76 crore in FY17. The company has posted positive quarterly financials showing growth and also the share price since our recommendation has fallen by 3 per cent. We thus recommend a HOLD looking at the financials as the company is likely to perform better on the bourses in the near future.