Query Board
This section gives decisive investment rationales to our subscribers on the stock queries they have raised to our research team.
APOLLO HOSPITALS ENTERPRISE LTD.
Established in 1983, Apollo Healthcare has a robust presence across the healthcare ecosystem. Coming to its quarterly consolidated financials, the net sales and other operating income for the Q3FY21 stood at Rs2,759.84 crore which declined by 5.22 per cent as compared to net sales and operating income of Rs2,911.74 crore for Q3FY20. The company reported operating profit for Q3FY21 at Rs395.79 crore, which declined by 9.98 per cent as compared to operating profit of Rs439.68 crore reported for the corresponding quarter of the previous fiscal year. The company recorded net profit of Rs118.62 crore in Q3FY21, rising 32.4 per cent as against net profit of Rs89.59 crore in Q3FY20. On an annual basis, the net sales and other operating income were reported to be Rs11,246.80 crore for FY20, which rose by 16.94 per cent when compared to Rs9617.44 crore for FY19. FY20 reported an increase of 47.41 per cent in operating profit at Rs1,614.26 crore as against Rs1,095.10 crore for FY19. The company reported net profit of Rs434.91 crore in FY20 as compared to net profit of Rs199.18 crore in FY20, rising up substantially. The vaccination drives further gives indications of possible upside valuations. Given the plans of new stores and product mixes, the company is predicted to double its pharmacy business. Hence, we recommend HOLD.
EMAMI LTD.
Headquartered in Kolkata, Emami Limited caters to a number of niche categories in the personal care and healthcare segments. Analyzing the quarterly consolidated financials, net sales and other operating income for Q4FY21 was reported at Rs730.76 crore, which rose by 37.19 per cent as compared to net sales and operating income of Rs532.68 crore for Q4FY20. The company reported an operating profit for Q4FY21 at 209.30 crore, which increased attractively by 85.19 per cent as compared to an operating profit of Rs113.02 crore reported for the corresponding quarter of the previous fiscal year. The company recorded net profit of Rs89.07 crore in Q4FY21 as against net loss of Rs25.32 crore in Q4FY20. On an annual basis, the net sales and other operating income were reported to be Rs2,880.53 crore for FY21, which rose by 8.5 per cent when compared to Rs2,654.88 crore for FY20. FY21 reported an increase of 27.52 per cent in operating profit at Rs953.32 crore as against Rs747.61 crore for FY20. The company reported net profit of Rs458.89 crore in FY21 as compared to net profit of Rs308.32 crore in FY21, recording an increase of 48.84 per cent. New launches, whether exclusively for online channels or general trade, in categories like ‘Chawyanprash’ or ‘Boroplus’ (soaps) are doing well and witnessing a rise in demand in mom-and-pop stores. Hence, we recommend BUY.
THE RAMCO CEMENTS LIMITED
Headquartered in Chennai, The Ramco Cements Limited (TRCL) is the flagship company of the Ramco Group, a popular business group of South India. The company claims to be the fifth-largest cement producer in the country. The key product of the company is Portland cement which is manufactured in eight state-of-the art production facilities that includes integrated cement plants and grinding units with a current total production capacity of 16.45 MTPA, of which the capacity of satellite grinding units is 4 MTPA. Ramco Cements is known to be the most popular cement brand in the southern region. The company also produces ready mix concrete and dry mortar products and operates one of the largest wind farms in the country. On a quarterly consolidated basis, the net sales and other operating income for Q4FY21 was registered at Rs1,633.73 crore, an increase of 17.2 per cent as compared to net sales and operating income of Rs1,394 crore for Q4FY20. The operating profit for Q4FY21 was reported to be Rs456.77 crore, which increased by 57.34 per cent as against Rs290.31 crore reported for the corresponding quarter of the previous fiscal year. The net profit jumped from Rs145.67 crore in Q4FY20 to Rs212.7 crore for the fourth quarter of FY21. On an annual trend, the net sales and other operating income were reported to be Rs5,291 crore for FY21, a dip of 1.82 per cent compared to Rs5,389.30 crore for FY20.In FY21, operating profit increased by 34.44 per cent to reach Rs1,587.68 crore as against Rs1,180.92 crore for FY20. The company reported net profit of Rs763.58 crore in FY21 as against net profit of Rs604.39 crore in FY19, increasing by 26.34 per cent. The demand outlook for the cement sector is positive owing to the government’s strong focus on infrastructure and housing in the latest Union Budget. The company reports that most of the capital expansion is planned to be completed by May 2021, which indicates significant deleveraging in the future followed by strong free cash flows. Hence, we recommend BUY.
BANDHAN BANK LTD
Headquartered in Dalhousie, West Bengal, Bandhan Bank Ltd. is an Indian banking and financial services’ company. The bank is present in 34 out of 36 states and Union Territories of India. Presently Bandhan Bank has 5,371 banking outlets pan-India serving more than 2.30 crore customers. The bank has 487 accessible ATMs with voice guidance and Braille keyboard. As on December 31, 2020, the bank had Rs77,972.2 crore worth of deposits. On the quarterly front, the bank reported net interest income of Rs3,000.65 crore for Q4FY21, which is an increase by 5.42 per cent compared to the net interest income of Rs2,846.28 crore reported for Q4FY20.
The total income for Q4FY21 rose by 13.19 per cent to Rs3,787.91 crore from Rs3,346.47 crore posted in Q4FY20. Profit after tax was reported at Rs103.03 crore for Q4FY21, which is 80 per cent decline compared to the profit after tax of Rs517.28 crore posted for Q4FY20. For Q4FY21 the GNPA percentage was 6.81 per cent compared to 1.48 per cent in Q4FY20. The CRAR ratio in Q4FY21 was 23.47 per cent and in Q4FY20 it was 27.43 per cent. Net interest earned by the bank in FY21 came in at Rs12,524.21 crore, an increase of 15.05 per cent from Rs10,885.49 crore in FY20. The total income earned by the bank in FY21 was Rs14,633.27 crore, an increase of 17.68 per cent from Rs12,434.69 crore earned in the previous fiscal.
The profit after tax in FY21 decreased by 27 per cent to reach Rs2,205.45 crore as against Rs3,023.73 in FY20. The company reported GNPA ratio of 6.81 per cent for FY21 and 1.48 per cent for FY20. In FY21, the CRAR ratio was 23.47 per cent whereas in FY20 it was 27.43 per cent. The bank’s deposits grew by 36.6 per cent YoY in Q4FY21 whereas retail deposit to total deposit ratio was at 78.8 per cent in Q4FY21. The bank added 0.52 million customers during the quarter with its total customer base reaching 23 million. It accelerated technical write-off of Rs1,930 crore during the quarter to strengthen its balance-sheet. Hence, bearing positive growth outlook for coming quarters, we recommend HOLD.
CROMPTON GREAVES CONSUMER ELECTRICALS
CG Power and Industrial Solutions Limited, previously known as Crompton Greaves Limited, is an Indian multinational company engaged in design, manufacturing, and marketing of products related to power generation, transmission, and distribution. The company is an independent company under professional management and has two business segments – lighting and electrical consumer durables. It markets its products under the ‘Crompton’ brand name in India and select export markets. The company has 10,000 + SKUs to choose from.
Analyzing the quarterly consolidated financials, the net sales and other operating income for Q4FY21 was reported at Rs1,522.05 crore, which rose by 48.3 per cent as compared to net sales and operating income of Rs1,026.34 crore for Q4FY20. The company reported an operating profit for Q4FY21 at Rs248.58 crore which increased by an attractive 62.29 per cent as compared to an operating profit of Rs153.17 crore reported for the corresponding quarter of the previous fiscal year. The company recorded net profit of Rs249.08 crore in Q4FY21, rising significantly as against net profit of Rs102.10 crore in Q4FY20.
On an annual basis, the net sales and other operating income were reported to be Rs4,803.51 crore for FY21, which rose by 6.27 per cent when compared to Rs4,520.26 crore for FY20. FY21 reported an increase of 20.98 per cent in operating profit at Rs796.23 crore as against Rs658.15 crore for FY20. The company reported net profit of Rs616.65 crore in FY21 as compared to net profit of Rs496.39 crore in FY21, recording an increase of 24.23 per cent.
The company has gained 1 per cent market share in the fan segment during FY21 and has managed to retain the first position in the segment with overall market share of 27 per cent. Launching of premium products, the cost-saving measures practiced and hike in prices will support in expansion of margins. Hence, we recommend ACCUMULATE.
BOROSIL RENEWABLES LTD.
Borosil Renewables Limited qualifies to be the first and only solar glass manufacturer in India. The company was successful in capturing the opportunity in this segment quite early and commissioned the solar glass manufacturing facility at Bharuch in Gujarat in January 2010. Over the last five years, the solar PV installations and module production across the world have shown exponential growth.
Going through the quarterly standalone financials, the net sales and other operating income for the Q4FY21 was reported at Rs193.98 crore, which rose significantly as compared to net sales and operating income of Rs94.26 crore for Q4FY20. The company reported operating profit for Q4FY21 at Rs106.60 crore, which increased massively as compared to operating profit of Rs21.19 crore reported for the corresponding quarter of the previous fiscal year. The company recorded net profit of Rs66.88 crore in Q4FY21, rising significantly as against net profit of Rs4.05 crore in Q4FY20.
On an annual basis, the net sales and other operating income were reported to be Rs502.27 crore for FY21, which rose by 85.23 per cent when compared to Rs271.16 crore for FY20. FY21 saw a significant jump in operating profit at Rs202.73 crore as against Rs40.04 crore for FY20. The company reported net profit of Rs89.64 crore in FY21 as compared to net profit of Rs0.45 crore in FY21.
The exports business has registered a growth of CAGR of 33 per cent in the last three financial years. The European market is a major customer base for the company where it has successfully started supplies of its newly developed products viz. 2.0 mm and 2.5 mm fully tempered glass. With additional production capacity now available, it has plans to substantially increase exports by tapping more customers in Europe as also increasing its presence in the Americas. Hence, we recommend HOLD.
(Closing price as of June 14, 2021)