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Larsen & Toubro Limited is a technology, engineering, construction, manufacturing and financial services company. The company’s products/services include engineering and construction of building and factories, solutions for thermal power plants, etc. Larsen & Toubro also offers IT & Technology and Financial Services. On the consolidated financial front, the company has reported a decrease of 15.16 per cent in net sales to Rs35,328.45 crore for Q2FY20 as compared to net sales of Rs30,678.13 crore for Q2FY19. For Q2FY20 the company reported a 1.96 per cent rise in the operating profit to Rs3,302.75 crore from Rs3,368.76 crore for Q2FY19. The company’s net profit after tax from continuing operations as well as discontinued operations rose by 6.83 per cent to Rs2,770.43 crore in Q2FY20 from Rs2,593.41 crore in Q2FY19. On an annual basis, net sales increased by 17.64 per cent to Rs141,007.09 crore for FY19 from Rs119,862.10 crore for FY18. The PBT of the company increased by 25.27 per cent to Rs14,580.92 crore for FY19 as compared to Rs11,639.16 crore for FY18. In FY19, the net profit grew by 21.29 per cent to Rs10,237.58 crore from Rs8,440.29 crore recorded in FY18. Larsen & Toubro has been receiving various orders from many prestigious clients spread across India. Hence, we recommend a HOLD on the stock.
TATA Steel Limited is a steel producer engaged in the business of steel making, including raw material and finishing operations. The company’s business operations predominantly relate to manufacture of steel, tubes, bearings, refractories, pigments, port operations and town services. Its products include flat products, including hot rolled, cold rolled, metallic coated, direct rolled, tubes, etc. On the consolidated financial front, in Q2FY20, the company reported net sales of Rs33,953.75 crore, a decrease of around 15.77 per cent compared to net sales of Rs40,313.03 crore in Q2FY19. For Q2FY20, the company incurred an operating loss of Rs6.54 crore as against an operating profit of Rs5,411.10 crore gained in Q2FY19.The company gained a net profit of Rs3,302.31 crore for Q2FY20, a decrease by 5.97 per cent compared to the net profit of Rs3,116.20 crore for Q2FY19. On the annual front, the company’s net sales in FY19 were Rs157,668.99 crore, a 27.05 per cent increase from net sales of the previous fiscal. The PBT for FY19 decreased by 24.10 per cent to Rs15,905.72 crore as compared to Rs20,956.09 crore in FY18. In FY19, the company’s net profit decreased significantly by 48.78 per cent to Rs9,098.33 crore from Rs17,762.81 crore in FY18. We recommend readers-investors to HOLD the stock.
Navkar Corporation Limited is engaged in Container Freight Station (CFS) operations and other similar activities. It focuses on capitalizing the available opportunities in the logistics space in western India. The company’s main services includes cargo handling, cargo storage and maintenance and repairs of containers. Navkar Corporation has three CFSs namely Ajivali CFS I and Ajivali CFS II located at Ajivali, and Somathane CFS located at Somathane, which have an aggregate installed handling capacity of around 310,000 Twenty-foot Equivalent Units (TEUs) per annum. The company also provides cold storage facilities at its CFS and custom clearance services, and handling and temporary storage of import/export laden containers and empty containers. It provides all the ancillary support and other value-added services such as packing, labeling/ bar-coding, palletizing, fumigation, etc. at its warehouses. It also owns a private freight terminal at the Somathane CFS.
Looking at the quarterly trends, for the second quarter of FY20, the company reported net sales of Rs130.53 crore, an increase of 16.47 per cent as against net sales of Rs112.07 crore for the same quarter of FY19. The PBT also increased significantly for the second quarter of the current fiscal year to Rs18.20 crore as compared to Rs6.50 crore for the second quarter of the previous fiscal year. The company gained a net profit of Rs10.14 crore in the second quarter of FY20 as compared to a net profit of Rs3.24 crore posted in the second quarter of FY19.
On the annual front, net sales for FY19 were Rs482.58 crore, which is an increase by 12.70 per cent when compared to Rs428.17 crore for FY18. For FY19, the PBT decreased by 46.48 per cent to Rs68.70 crore from Rs128.38 crore for FY18 due to higher operating and depreciation expenses. The net profit for FY19 was reported at Rs52.81 crore, a decrease of 47.66 per cent when compared to net profit of Rs100.91 crore earned in the previous financial year. As Navkar Corporation will benefit from an improving freight traffic situation, we recommend a HOLD on the stock.
Tejas Networks Ltd. provides carrier grade communications equipment and solutions for the telecom industry. The company is also a supplier of optical networking equipment to telecom carriers across the world. Its equipment are used by various service providers to build broadband networks as an addition to support traditional voice networks. Tejas Networks offers solutions for third generation (3G) backhaul, enterprise connectivity including Ethernet Private Line (EPL), Ethernet Virtual Private Line (EVPL), E-Tree and Ethernet Virtual Private Tree (EVP-Tree) cable multi system operators, government broadband, etc.
On the consolidated financial front, the company has reported a decrease of 57.77 per cent in net sales to Rs87.42 crore for Q2FY20 as compared to net sales of Rs207.03 crore for Q2FY19. For Q2FY20 the company reported an operating loss of Rs7.47 crore and for Q2FY19 the company reported an operating profit of Rs36.39 crore. Also, in Q2FY20, the company incurred a net loss of Rs4.38 crore as against a net profit of Rs33.48 crore posted in the same quarter of the previous fiscal. On the annual front, net sales increased by 17.31 per cent to Rs900.32 crore for FY19 from Rs767.44 crore for FY18. The PBT of the company increased by 40.83 per cent to Rs150.02 crore for FY19 as compared to Rs106.52 crore for FY18. In FY19, the company gained a net profit of Rs147.24 crore which is an increase of 38.22 per cent compared to the net profit of Rs106.52 crore gained in FY18.
The stock had formed reversal doji candlestick pattern as on weekend of January 12, 2018 and thereafter marked the sequence of lower tops and lower bottoms. The major trend of the stock is bearish as it is trading below its weekly pivot and below its long-short term moving averages, that is, 20-week, 50-week, 100-week, and 200-week EMAs. The leading indicator 14-period weekly RSI is currently quoting at 31.08 and it is in super bearish zone. The volumes are very low and other oscillators still tilted southward points to some more downside for now. Hence, we recommend AVOID.
Avanti Feeds Limited is a manufacturer of prawn, fish feeds and is also a shrimp processor and exporter. Its products are mainly related to shrimp feed and processed shrimp. The company’s main business segments are shrimp feed and wind mills. It manufactures shrimp feed and markets it to farmers which is then used in aqua culture for growing shrimps. Later, the shrimps are purchased from the farmers and are further processed to be exported to various countries. Avanti Feeds has also installed over four mills of over 3.2 megawatts capacity which are located in Chitradurga, Karnataka. The power which is generated from the wind mills is then sold to Bangalore Electricity Supply Company Limited (BESCOM) under a power purchase agreement. The company has over three prawn and a fish feed manufacturing units located in Kovvur, Vemuluru in Andhra Pradesh and Pardi in Gujarat. It produces feed catering to the Indian prawn and fish farmers.
On the consolidated financial front, for the second quarter of the current fiscal year, the company’s net sales were Rs1,064.30 crore, an increase of 41.05 per cent compared to net sales of Rs 754.54 crore reported in the second quarter of the previous fiscal year. For the second quarter of FY20, the PBT grew by 87.99 per cent and stood at Rs140.54 crore as against Rs74.76 crore in the corresponding quarter of FY19. The company’s net profit rose substantially to Rs127.26 crore for the second quarter of the current financial year from Rs55.10 crore gained in the same quarter of the last financial year.
On the annual front, net sales for FY19 increased by 2.80 per cent to Rs3,487.77 crore from Rs3,392.90 crore in FY18. For FY19, the operating profit decreased sustanitially by 39.24 per cent and was Rs428.05 crore as against Rs704.50 crore in FY18. The company’s net profit for FY19 decreased by 34.27 per cent to Rs306.61 crore from Rs466.47 crore gained in FY18. Based on analysis, due to high concentration of risk and an unpredictable revenue trend, we would recommend our readerinvestors to AVOID the stock.
Kotak Mahindra Bank Limited mainly provides services in treasury, BMU and corporate centre, which includes dealing in debt, equity, money market, forex market, derivatives and investments and primary dealership of government securities and Balance Sheet Management unit (BMU). The retail banking services include lending and credit cards while corporate banking services comprise of wholesale borrowings and lending. The bank also provides other services such as vehicle financing for retail vehicle finance and wholesale trade finance, financing against securities and other loans, broking services, financial advisory and transactional services, etc.
On the financial front, the net interest earned by the bank in the second quarter of FY20 came in at Rs8418.75 crore as against Rs7289.46 crore in the corresponding quarter of the previous fiscal, clocking a growth of 15.49 per cent. The total income in Q2FY20 was Rs12542.99 crore, an increase by 15.83 per cent from Rs10829.08 crore in Q2FY19. The profit after tax rose by 37.76 per cent to reach Rs2407.25 crore in Q2FY20 as against Rs1747.37 crore in Q2FY19. For Q2FY20 the GNPA percentage was 2.17 per cent as compared to 1.91 per cent in Q2FY19. The CRAR ratio in Q2FY20 was 18.15 per cent and in Q2FY19 it was 17.04 per cent.
On the annual front, the net interest earned by the bank in FY19 came in at Rs29934.76 crore, an increase of 19.11 per cent from Rs25131.08 crore in FY18. The total income earned by the bank in FY19 was Rs45903.36 crore, an increase of 18.54 per cent from Rs38723.67 crore earned in the previous fiscal. The profit after tax has on an annual basis in FY19 rose by 16.18 per cent to reach Rs7204.13 crore as against Rs6200.97 in FY18. The company reported GNPA ratio of 1.94 per cent for FY19 and 1.95 per cent for FY18. In FY19, the CRAR ratio was 17.45 per cent, whereas in FY18, it was 18.22 per cent. Looking at a positive future outlook, we would recommend a HOLD to our investor-readers.