Query Board
This section gives decisive investment rationales to our subscribers on the stock queries they have raised to our research team.
GUJARAT THEMIS BIOSYN LTD.
Incorporated as a joint sector company with GIIC Ltd. and Chemosyn (P) Ltd., Gujarat Themis Biosyn Ltd. is a mining and metals company based out of Gujarat. As regards the standalone quarterly performance of the company, its net sales and other operating income for Q1FY22 stood at Rs32.44 crore, recording a robust rise of 107.11 per cent as compared to net sales and operating income of Rs15.66 crore for Q1FY21. The company posted an operating profit for Q1FY22 at Rs17.86 crore which grew significantly as compared to an operating profit of Rs15.66 crore registered for Q1FY21. The company achieved net profit of Rs12.92 crore in Q1FY22 as compared to net profit of Rs5.32 crore achieved in Q1FY21, zooming upwards attractively. In terms of annual performance, the net sales and other operating income were reported to be Rs90.56 crore for FY21, which rose by 6.39 per cent when compared to Rs85.12 crore for FY20. FY21 reported an increase of 29.97 per cent in operating profit at Rs43.59 crore as compared to Rs33.54 crore for FY20. The net profit stood at Rs30.18 crore in FY21 in comparison with net profit of Rs23.68 crore reported in FY20, growing by 27.47 per cent. Taking into consideration the good management efficiency and trading of stock below the industry average PE ratio, we recommend HOLD
POLYPLEX CORPORATION LTD.
Polyplex is an Indian multinational company which manufactures biaxially oriented polyester film for packaging, electrical and other industrial applications. The company’s quarterly consolidated financials reveal that net sales and other operating income for Q1FY22 were at Rs1,439.94 crore, recording a rise of 24.18 per cent as compared to net sales and operating income of Rs1,159.59 crore for Q1FY21. The company recorded an operating profit for Q1FY22 at Rs281.41 crore which was lower as compared to operating profit of Rs417.94 crore registered for Q1FY21. Net profit for Q1FY22 was Rs185.71 crore as against net profit of Rs330.12 crore in Q1FY21. In terms of annual performance, the net sales and other operating income were reported to be Rs4,918.27 crore for FY21, which improved by 9.61 per cent when compared to Rs4,487.10 crore for FY20. FY21 reported an increase of 51.51 per cent in operating profit at Rs1,275.90 crore as compared to Rs842.12 crore for FY20. The net profit stood at Rs861.97 crore in FY21 in comparison with net profit of Rs493.82 crore reported in FY20. Along with growing demand and ongoing capex, the company's focus on specialty and high value added products gives optimistic indications regarding earnings. Hence, we recommend BUY.
GLOBUS SPIRITS LTD.
Globus Spirits is amongst the leading players in the alcohol industry in North India. Globus Spirits has established its identity in the Indian Made Foreign Liquor (IMFL) segment with steady growth and production of high-quality liquor. The company has an established brand portfolio and caters to well-known national brands in the IMFL segment. Since its inception in 1992, it has been in the business of manufacturing, sales and marketing of IMFL, industrial alcohol and country liquor.
The company’s quarterly consolidated financials recorded net sales and other operating income for Q1FY22 at Rs550.62 crore, recording a rise of 88.58 per cent as compared to net sales and operating income of Rs291.28 crore for Q1FY21. The company recorded an operating profit for Q1FY22 at Rs99.19 crore, which jumped beyond 100 per cent as compared to Rs40.18 crore registered for Q1FY21. The net profit of Q1FY22 stood at Rs55.67 crore, attractively higher than Rs18.69 crore recorded in Q1FY21. In terms of annual performance, the net sales and other operating income were reported to be Rs1,672.13 crore for FY21, which ascended by 31.93 per cent when compared to Rs1,267.43 crore for FY20.
FY21 reported an increase of 103.35 per cent in operating profit at Rs261.26 crore as compared to Rs128.48 crore for FY20. The net profit stood at Rs140.82 crore in FY21 in comparison with net profit of Rs49.7 crore reported in FY20, growing robustly by 183.33 per cent. Cost-efficiency measures coupled with strategic growth initiatives have augured well for the company to generate healthy cash flows even during a dynamic year. The cash generated from business has been utilised towards strengthening of the balance-sheet, both for funding capex as well as reduction of debt. The government’s thrust towards ethanol blending is expected to drive demand in the bulk alcohol segment, creating a new line of organic growth for the company. Hence, we recommend ACCUMULATE.
ZEE ENTERTAINMENT ENTERPRISES LTD
Zee Entertainment Enterprises is a global content company with a strong presence across broadcasting, digital, movies, music and live entertainment. Spread over 190 countries, connecting and entertaining over 1.3 billion people globally, ZEE has been powering the media and entertainment space across the world for nearly three decades. The company aims to continue to provide extraordinary entertainment content across genres, languages and geographies; delighting consumers across screens, platforms and devices. As regards the consolidated quarterly performance of the company, its net sales and other operating income for Q1FY22 stood at Rs1,774.98 crore, recording a rise of 35.29 per cent as compared to net sales and operating income of Rs1,312.03 crore for Q1FY21.
The company posted an operating profit for Q1FY22 at Rs367.83 crore which grew significantly as compared to an operating profit of Rs133.98 crore registered for Q1FY21. It achieved a net profit of Rs208.77 crore in Q1FY22 as compared to net profit of Rs29.24 crore achieved in Q1FY21, clocking attractive gains. In terms of annual performance, the net sales and other operating income were reported to be Rs7,729.92 crore for FY21, which squeezed by 4.92 per cent when compared to Rs8,129.86 crore for FY20. FY21 reported an improvement of 2.76 per cent in operating profit at Rs1,704.31 crore as compared to Rs1,658.54 crore for FY20.
The net profit stood at Rs793.14 crore in FY21 in comparison with net profit of Rs526.99 crore reported in FY20, recording gains of 50.5 per cent. With lockdowns imposed in most states, TV viewership jumped during the first quarter of FY22, though lower than Q1 of FY21. Bengali, Telugu, Kannada and Hindi movies have continued to post a strong performance whereas the performance of Zee TV, Zee Marathi and Zee Tamil was soft during the quarter. The business is gaining momentum backed by an expansive content catalogue. The company released 11 original shows and movies during Q1FY22. Hence, we recommend HOLD
ENGINEERS INDIA LTD.
Engineers India Ltd. (EIL), a Navratna PSU, is one of the leading design and engineering organisations in South Asia. EIL provides engineering consultancy and EPC services principally focused on the oil and gas and petrochemical industries. The company has also diversified into sectors like infrastructure, water and waste management, solar and nuclear power and fertilisers to leverage its strong technical competencies and track record.
The company’s quarterly consolidated financials recorded net sales and other operating income for Q1FY22 at Rs746.08 crore, recording a rise of 57.23 per cent as compared to net sales and operating income of Rs474.50 crore for Q1FY21. The company recorded an operating profit for Q1FY22 at Rs129.62 crore in comparison with operating profit of Rs74.04 crore registered for Q1FY21. The net profit of Q1FY22 stood at Rs129.62 crore as compared to net profit of Rs74.04 crore in Q1FY21, 75.06 per cent higher. In terms of annual performance, the net sales and other operating income were reported to be Rs3,144.17 crore for FY21, which descended by 2.85 per cent when compared to Rs3,236.54 crore for FY20. FY21 reported a decrease of 24 per cent in operating profit at Rs538.63 crore as compared to Rs708.76 crore for FY20.
The net profit stood at Rs 261.46 crore in FY21 in comparison with net profit of Rs433.86 crore reported in FY20, slipping 39.74 per cent. Engineers India reported strong performance in Q1FY22, led by execution ramp-up in the turnkey segment. EBITDA margin came in at 14.2 per cent led by higher execution and better absorption of fixed overheads. Order inflows stood at Rs2.8 billion on the back of orders from the hydrocarbon sector. As most of the oil companies are reviving their capex plans, the ordering momentum is likely to continue to remain strong. EIL’s healthy order book, steady balance-sheet, strong project pipeline and strong growth visibility is expected to augur well for the company. Hence, we recommend HOLD.
EXIDE INDUSTRIES LTD.
Exide Industries Limited is an Indian multinational storage battery manufacturer and life insurance company, headquartered in Kolkata. It is the largest manufacturer of automotive and industrial lead acid batteries in India and the fourth-largest in the world. It has plants in India and Sri Lanka and dealership network in 46 countries spanning across five continents. The company claims that 99 per cent of the lead processed through these facilities is recycled.
The company’s quarterly consolidated financials recorded net sales and other operating income for Q1FY22 at Rs3,542.63 crore, recording a strong rise of 40.24 per cent as compared to net sales and operating income of Rs2,526.11 crore for Q1FY21. The company recorded an operating profit for Q1FY22 at Rs223.95 crore, 55.27 per cent higher than Rs144.23 crore registered for Q1FY21. Net profit of Q1FY22 was recorded at Rs31.54 crore as against net loss of Rs13.48 crore in Q1FY21. In terms of annual performance, the net sales and other operating income were reported to be Rs15,296.89 crore for FY21, which improved by 5.71 per cent when compared to Rs14,471.01 crore for FY20. FY21 reported an increase of 9.48 per cent in operating profit at Rs1,650.87 crore as compared to Rs1,507.94 crore for FY20.
The net profit stood at Rs803.74 crore in FY21 in comparison with net profit of Rs762.67 crore reported in FY20, growing by 5.39 per cent. While the economy is on the path of gradual recovery, newer cost-effective brands of EIL at competitive prices will continue to drive growth in the replacement market. Robust revival in automobile sales due to cyclical change is expected to continue benefitting the company owing to its market leadership. The company is well-poised to take advantage of the replacement market from the unorganised sectors. With batteries being a product that needs to be continuously replaced, Exide Industries is in a prime position to drive home its advantage. Hence, we recommend BUY.
(Closing price as of Oct 27, 2021)