Query Board
This section gives decisive investment rationales to our subscribers on the stock queries they have raised to our research team.
Eris Lifesciences (P) Ltd. is the fastest growing super speciality-focused pharmaceutical company and is engaged in manufacturing, marketing and selling of branded generics across the country. It mainly focuses on cardiology, diabetology, ENT, orthopaedics and offers world-class products. The quarterly returns show net sales of Rs353.34 crore in Q2FY22 as compared to Rs325.27 crore in Q2FY21. The operating profit shows growth of 15.74 per cent. The net profit for Q2FY22 stands at Rs118.39, up by 9 per cent as compared to Q2FY21 which was Rs107.72 crore. As regards the annual performance for FY21, net sales were posted at Rs1,192.64 crore as compared to Rs1,058.18 crore in FY20. The operating profit is at Rs439.28 crore for FY21 and Rs383.77 crore for FY20. The net profit for FY21 was also up by 19.77 per cent at Rs355.13 crore as compared to Rs296.51 crore in FY20. The Eris Lifesciences’ foray into insulin and its analogues through a supply tie-up with M J Biopharm to bolster its anti-diabetics portfolio. The company has higher scope of penetration of technically superior drugs in anti-diabetes therapy. Eris Lifesciences also announced its entry into India’s insulin segment through a joint venture with M J Biopharm with the former holding 70 per cent stake. The JV will primarily engage in marketing and distribution. Hence, we recommend HOLD.
Angel One is a technology-led financial services’ company providing broking and advisory services, margin funding, loans against shares (through one of its subsidiaries, AFPL) and financial products’ distribution to its clients under the brand ‘Angel Broking’. The company’s quarterly consolidated financials recorded net sales of Rs527.34 crore in Q2FY22, more than Rs309.86 crore in Q2FY21. The operating profit stood at Rs201.85 crore in Q2FY22 as compared to Rs118.63 reported in Q2FY21. The net profit also grew from Rs74.48 crore in Q2FY21 to Rs134.20 crore in Q2FY22. On an annual basis, in FY21 the net sales have jumped 72.12 per cent to Rs1,263.68 crore as compared to Rs724.62 crore reported in FY20. The operating profit for FY21 zoomed 148.46 per cent to Rs468.46 crore as compared to operating profit of Rs118.54 crore posted for FY20. Net profit for FY21 was recorded at Rs296.06 crore, giving a substantial increase from Rs82.35 crore recorded in FY20. Angel One’s PAT surged 260 per cent this year. The Indian stock broking industry is likely to be stable in the near term on account of revival in corporate earnings. The sector will also benefit due to increasing involvement of retail investors in equities through direct and indirect routes such as channels like mutual funds and insurance companies. Hence, we recommend HOLD.
The company offers refrigerants to OEMs, service technicians and equipment owners under the ‘Mafron’ brand name for use in various applications such as window and split room air-conditioners, chillers, packaged air-conditioners, commercial and industrial refrigeration units, intermediate for APIs, fluoropolymer resins, domestic and industrial refrigerators and mobile air-conditioning. The company’s quarterly consolidated financials net sales were reported at Rs338.96 crore in Q2FY22 as compared to Rs318.92 crore in Q2FY21. The operating profit declined to Rs94.65 crore in Q2FY22 as related to Rs100.38 crore in Q2FY21.
The net profit similarly declined in Q2FY22 to Rs63.22 crore as compared to Rs64.42 crore in Q2FY21. As regards its annual performance, the net sales in Q2FY22 stood at Rs1,179.39 crore, more than 11 per cent as compared to Q2FY21 which was Rs1,061.55 crore. The operating profit stood at Rs388.33 crore as compared to Rs296.81 crore in FY20. The net profit declined by 38.45 per cent in FY20 to Rs247.05 crore as compared to Rs401.37 crore in FY21.
The chemicals and petrochemicals sector is seeing recovery from impact of Covid-19, driven by an increasing production. Government of India is putting efforts to improve key end-use sectors, through schemes under AtmaNirbhar Bharat Abhiyaan, such as pharmaceuticals, telecommunication & networking equipments, automobiles, electronics, mobiles, medical devices, textiles etc. which will enhance the demand for chemicals and petrochemicals.
The company has entered into a five-year contract with a large MNC for manufacturing and supply of a key FluoroAgrochemical intermediate and the management is also reiterating huge opportunities in both the Agro and Pharma space. Hence, we recommend HOLD.
Mahindra Logistics is a portfolio company of Mahindra Partners, the private equity division of Mahindra Group. The company is an integrated third-party logistics (3PL) service provider, specialising in supply chain management and people transport solutions. Founded more than a decade ago, the company serves many corporate customers across various industries like automobile, engineering, consumer goods and e-commerce. The quarterly performance of the company shows net sales of Rs1,019.11 crore in Q2FY22 as opposed to Rs832.51 crore in Q2FY21. The operating profit stood at Rs51.99 crore in Q2FY22, higher than 14 per cent reported in Q2FY21 at Rs45.57 crore. The net profit was negative at Rs9.29 crore as compared to Rs14.85 crore in Q2FY21. The annual figures for performance shows net sales of Rs3,263.72 crore in FY21 as compared to Rs3,471.14 in FY20.
The operating profit also decreased from Rs172.25 crore in FY20 to Rs151.69 crore in FY21. The net profit for the year was Rs29.18 crore for FY21 as compared to Rs55.45 crore in FY20, a decline of 47.38 per cent. The automotive sector has been seen difficulties due to semiconductor unavailability, which is impacting production and the requirement for logistics motion. The rising fuel prices on account of global oil price rise is a concern on the margin. The stock has given a negative 2.97 per cent return on YoY basis. Over the long term MLL is a wait and watch stock depending on pick-up in industry growth and the growing need for integrated solutions.
Thought the outlook for the industry is positive in 2022, the government is focussing on developing infrastructure now and as the economy was just opens up, logistics would find this a good runway to take-off. But the rapid rising number of covid cases and new variant been found in France and Cyprus is a concern. Also, the many states further fear of a lockdown may affect the logistics industry. Hence, we recommend EXIT.
The company manufactures a complete range of decorative paints including emulsions, enamels, wood coatings, distempers, primers, putties and cement paints. It is the first company to manufacture and introduce certain differentiated products in the decorative paint market in India, which includes its metallic emulsions, tile coat emulsions, bright ceiling coat emulsions, floor coat emulsions, dirt-proof and waterproof exterior laminate, and exterior and interior acrylic laminate. The financial performance of the company depicts that on a standalone basis the net sales surged in Q2FY22 to Rs196.11 crore as compared to Rs154.84 crore in Q2FY21. In Q2FY22 the operating profit was Rs26.43 crore as compared to Rs29.73 in Q2FY21. The net profit stood at 13.55 crore, less than Q2FY21 which was Rs18.81 crore.
Analysing on an annual basis, the net sales were reported as Rs723.33 crore for FY21 as compared to Rs624.79 crore in FY20. The operating profit is at Rs126.11 crore in FY21 as opposed to Rs92.63 crore in FY20. The net profit also increased from Rs47.81 crore to Rs70.85 crore in FY21. The stock also lost almost 2 per cent in one year. The consolidated PAT for the September 2021 quarter was down 27.96 per cent at Rs13.55 crore largely on the back of a sharp spike in raw material costs leading to huge pressure on operating profits. The company has underperformed compared to its peer companies like Asian Paints or Berger Paints.
Indigo Paints witnessed strong selling pressure and hit its 52-week lows, signalling bearish sentiment on the counter. The Indian paint and coatings industry has seen demand nose-dive in the past few months in an unprecedented manner. Even though the manufacturing for most of the paint production units has started at a slow pace, the increasing number of cases and decreasing demand has caused concern among the leading paint and coating brands. Hence, we recommend AVOID.
I CICI Bank Limited, together with its subsidiaries, joint ventures and associates, is a diversified financial services’ group providing a wide range of banking and financial services including commercial banking, retail banking, project and corporate finance, working capital finance, insurance, venture capital and private equity, investment banking, broking and treasury products and services. On the quarterly front, the net interest earned by the bank in the second quarter of Q2FY22 came in at Rs21,233.64 crore as against Rs19,622.46 crore in the corresponding quarter of the previous fiscal, an increase of 8.21 per cent. The total income in Q2FY22 was Rs26,030.82 crore, an increase of 10.06 per cent from Rs23,650.77 crore in Q2FY21.
The profit after tax rose by 29.62 per cent to reach Rs5,510.95 crore in Q2FY22 from Rs4,251.33 crore in Q2FY21. For Q2FY22 the GNPA percentage was 4.82 per cent as compared to 5.15 per cent in Q2FY21. The CRAR ratio in Q2FY22 was 18.33 per cent and in Q2FY21 it was 18.47 per cent. Net interest earned by the bank in FY21 came in at Rs79,118.27 crore, an increase of 5.77 per cent from Rs74,798.32 crore in FY20. The total income earned by the bank in FY21 was Rs98,086.80 crore, an increase of 7.49 per cent from Rs91,246.94 crore earned in the previous fiscal. The PAT in FY21 increased handsomely to reach Rs16,192.68 crore as against Rs7,930.81 in FY20.
The company reported GNPA ratio of 4.96 per cent for FY21 and 5.53 per cent for FY20. In FY21, the CRAR ratio was 19.12 per cent whereas in FY20 it was 16.11 per cent. The stock price rose by 43 per cent on YoY basis. Digitalisation and increasing agreements are leading to strong opportunity and growing infusion in the SME business. The bank provides a comprehensive platform for small businesses too via its InstaBIZ app. ICICI Bank’s performance in the current cycle has been far ahead of its peers in terms of growth, asset quality and margin delivery. Hence, we recommend BUY.