Query Board
Parag Milk Foods is engaged in the manufacture, distribution and export of dairy products in India. 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 also exports to the Middle East. On the standalone financial front, the company has posted topline of Rs. 659.95 crore in Q4FY19, showcasing a jump of 29 per cent YoY.
In Q4FY18, the sales stood at Rs. 508.75 crore. The PBIDT of the company came in at Rs. 44.4 crore in Q4FY19, posting a de-growth of around 11 per cent from Rs. 50.42 crore in the Q4FY18 period. The net profit stood at Rs. 28.57 crore in Q4FY19, thereby expanding by 23 per cent from Rs. 22.12 crore posted in the fourth quarter of fiscal 2018. On the annual front, in FY19, the net sales stood at Rs. 2,346.13 crore, up by 22 per cent from Rs. 1,918.12 crore in FY18. The PBIDT stood at Rs. 217 crore, showing a growth of 15 per cent in FY19 from Rs. 187.72 crore in FY18. The net profit expanded substantially by 45 per cent in FY19 and reached Rs. 114.05 crore, while in FY18 the net profit was Rs. 78.48 crore. On the valuation front, the company is currently trading at a P/E of 18.43x. The return on equity (ROE) stands at 13.82 per cent and the return on capital employed (ROCE) stands at Rs. 19.49 per cent. The dividend yield was 0.4 per cent.We would recommend a HOLD to our investor-readers on the back of strong financials of the company.
Trident Limited manufactures terry towel, yarn and wheat straw-based paper. The company’s segments include textiles, paper and chemicals, and others. The company operates around the world. Its textiles segment include yarn, towel, bed sheets and dyed yarn manufacturing (including utility service). The paper and chemicals segment includes paper and sulfuric acid (including utility service). On the financial front, the company posted 18.54 per cent rise in its net sales to Rs. 1405.42 crore in the fourth quarter of FY19 as compared to Rs. 1185.56 crore in the same quarter of the previous fiscal. The company posted a rise in its PBIDT by 22.41 per cent to Rs. 258.91 crore in the fourth quarter of FY19, as against Rs. 211.51 crore in the same quarter of the previous fiscal. The company also posted an increase of 80.06 per cent in its net profit to Rs. 92.57 crore in the fourth quarter of FY19 as compared to Rs. 51.41 crore in the same quarter of the fiscal. On the annual front, the company’s net sales increased by 14 per cent to Rs. 5,219 crore in FY19 as compared to Rs. 4,578 crore in the previous fiscal. The company’s PBIDT increased by 15.43 per cent to Rs. 983.43 crore in FY19 as compared to Rs. 851 crore in the previous year. The company’s net profit also increased by 39.52 per cent to Rs. 370.92 crore in FY19 as against Rs. 265.86 crore in FY18. Hence, we recommend a BUY.
Phillips Carbon Black is the manufacturer and supplier of carbon black in the country catering to the needs of elastomer, plastic, paints and ink manufacturing industries. They also manufacture special black for non-rubber applications. The company designs, manufacturers and markets carbon black. The major market for carbon black is the tyre industry. Carbon black is also required by non-tyre rubberbased application industry as well as the plastic industry. PCBL has capability and flexibility to produce any ASTM grade. Besides ASTM grades, PCBL also manufactures customised product as per customer’s specification. The company is also engaged in the business of power.
On the financial front on a standalone basis, the net sales grew 53.80 per cent to reach Rs. 945.89 crore in Q3FY19 as against Rs. 615.01 crore in the same quarter of the previous year.
The profit before interest depreciation and tax (PBIDT) witnessed a rise of 84.37 per cent to Rs. 178.75 in Q3FY19 as compared to Rs. 96.95 crore posted in the corresponding period of the previous year. The company posted a net profit of Rs. 108 crore in the latest quarter ending December, 2018, up by 91.87 per cent, as against Rs. 56.59 crore reported in Q3FY18.
On the annual front, the net sales in FY18 came in at Rs. 2,600.31 crore, a growth of 22 per cent as compared to Rs. 2,131.27 crore reported in FY17.
The PBIDT in FY18 stood at Rs. 386.05 crore, gaining 49.25 per cent from Rs. 258.66 crore in FY17. The company posted a net profit in FY18 of Rs. 229.78 crore as against Rs. 69.54 crore in FY17, an increase of 230 per cent.
The financials of the company are moving in the upward direction. We would recommend our investor-reader to add more at present levels only if you are willing to hold for at least 2 years, else HOLD.
NMDC Limited is an India-based company engaged in mining of iron ore. The company’s segments include iron ore and other minerals and services. It is also engaged in the production and sale of diamond, sponge iron and wind power. On the financial front, the net sales of NMDC increased by 47.81 per cent to Rs. 3,649.44 crore in the third quarter of FY2019, as against Rs. 2,469.03 crore in the same quarter of the previous fiscal. The PBIDT of the company rose by 78.07 per cent to Rs. 2,154.36 crore in the third quarter of FY2019, as against Rs. 1,209.86 crore in the third quarter of FY18. The profit after tax of the company grew by 77.84 per cent to Rs. 1,576.77 crore in the third quarter of FY2019 as compared to Rs. 886.64 crore in the same quarter of the previous fiscal.
On the annual front, the net sales of the company increased by 31.54 per cent to Rs. 11,614.91 crore in FY2018 as compared to Rs. 8,829.64 crore in the FY2017. The PBIDT of the company grew by 61.27 per cent to Rs. 5,806.14 crore in FY2018 as against Rs. 3,601.81 crore in the FY2017. The net profit of the company expanded by 47 per cent to Rs. 3,806.32 crore in FY18 as compared with Rs. 2,589.64 crore in FY17. The Government of Karnataka, while renewing the lease of NMDC’s Donimalai iron ore mine, has imposed a new condition asking for a premium of 80% on the average sale value. NMDC has requested the government to reconsider its decision. As there has been no response from the state government, NMDC has suspended its operations from November 4, 2018 and moved the High Court of Karnataka praying for a suitable direction in the matter. We await further clarity in this matter, as it would be one of the key factors going forward. Recently, NMDC is planning to own 100% stake in the Australian arm Legacy Iron by acquiring the remaining 24% shares and delisting it from the Australian Stock Exchange (ASX). This is, however, a positive development and gives the investors a good ray of hope. Unfortunately, there are other negative points related to the company’s growth. We, therefore, recommend the reader investors to SELL the stock.
Reliance Communications Ltd (RCom) is mainly engaged in the businesses of wireless, broadband, rural communication, Reliance World, IDC, carrier business and infrastructure business. The wireless business -Reliance Mobile- is one of India’s largest mobile service brand. Reliance Mobile World - The Reliance Mobile World suite of Reliance Mobile is a unique Java-based application which enables complex internet applications to be introduced in mobile phones. Broadband- The company has successfully rolled out of real broadband services across the nation. Reliance Communications aims to usher in rural telephony. IDC- Reliance is India’s largest Internet Data Center (IDC) service provider, hosting business critical applications of Indian and foreign blue chip companies, financial institutions and other important organisations.
On the consolidated financial front, in Q3FY19, the net sales were reported at Rs. 1,070 crore, showing a fall of 6.47 per cent from Rs. 1144 crore in the same quarter of the previous year. The PBIDT also fell by 33.64 per cent to Rs. 146 crore in Q3FY19 as in the same quarter of the previous year it was reported at Rs. 220 crore. The company posted a net loss of Rs. 104 crore as against a net profit of Rs. 24 crore Q3FY19. On the annual front, the company posted net sales of Rs. 2,231 crore, showcasing a decline of 26.92 per cent in FY18 from Rs. 3,537 crore in FY17. The PBIDT was Rs. 264 crore, showing a decrease of 23.92 per cent in FY18 as against Rs. 347 crore posted in FY17. The PAT in FY18 was Rs. 63 crore as compared to Rs. 225 crore the previous year, thus showing a drastic fall of 72 per cent.
RCom promoters’ stake has dropped to 22 per cent in January- March 2019 quarter, with family and group firms jointly losing more than half of the equities. In the October-December 2018 quarter, the promoters and promoter group of debt-ridden RCom had 53.08 per cent stake in the company. In the third quarter of 2018-19, Ambani family members jointly held 145.48 crore equity shares, which came down to 59.79 crore in the last quarter of the same fiscal. We recommend a SELL.
Venky’s (India) Ltd was established mainly to produce day-old layer and broiler chickens. Diversifying from mainstream poultry products, the company has added manufacturing facilities for nutritional health products for humans, and pet food and health care products. The product range of the company includes Vencobb broiler and broiler breeder, BV-300 layer and layer breeder, animal health products, poultry vaccines, SPF eggs, incubation systems, etc. The company is also in the business of oilseeds, animal health products, poultry & poultry products.
On the standalone financial front, the company posted net sales at Rs. 828.74 crore in Q4FY19, up from Rs. 741.58 crore posted in Q4FY18, thus witnessing a 11.75 per cent growth. The profit before interest, depreciation and tax came in at Rs. 57.95 crore in Q4FY19, posting a contraction of 42.16 per cent from Rs. 100.19 crore reported in the same quarter of the previous year. The profit after tax (PAT) came in at Rs. 29.94 crore in Q4FY19 as against Rs. 51.2 crore in Q4FY18, posting a 41.52 per cent fall on a YoY basis.
On the annual front, the company reported net sales for FY19 at Rs. 3,043.14 crore, posting an increase of 13.29 per cent from Rs. 2,686.21 crore posted in FY18. The PBIDT came in at Rs. 308.41 crore in FY19 as compared to Rs. 386.15 crore in FY18, representing a 20.13 per cent decline. The PAT was Rs. 174.14 crore in FY19, signifying a de-growth of 12.80 per cent as compared to Rs. 199.71 crore in FY18.
On the valuation front, the stock is trading at price-to-earnings ratio of 13.22 times with EPS of Rs. 123.61 on TTM basis. The return on equity stood at 19.67 per cent and the return on capital employed was 33.43 per cent.
We would recommend a hold for partial recovery 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.
(Closing price as of May 21, 2019)