Review

In this edition, we have reviewed Trident and HUDCO. We suggest our reader-investors to HOLD in Trident and BOOK PROFIT in HUDCO. 

We had previously recommended Trident Ltd. in volume 33, Issue No. 25, dated November 12 - 25, 2018 under the ‘Low Priced Scrip’ segment. It was recommended based on robust financial performance and positive outlook of the sector. Trident is engaged in the business of manufacturing yarn, bath linen, wheat straw-based paper, chemicals and captive power. 

Looking at the quarterly trends on a consolidated basis, for Q2FY20, the company posted net sales of Rs1,340.72 crore which is a decline by 4.28 per cent compared to net sales of Rs1,400.7 crore for Q2FY19. For Q2FY20, the company gained an operating profit of Rs265.08 crore as against an operating profit of Rs274.62 crore in Q2FY19, exhibiting a decline of 3.47 per cent. The net profit of the company climbed by 26.31 per cent to Rs140.95 crore in Q2FY20 as against Rs111.59 crore in Q2FY19. 

Looking at the annual financial trend, for FY19, the net sales of the company increased by 14.81 per cent to Rs5,248.60 crore from Rs4,571.75 crore for FY18. The PBT increased by 40.62 per cent and stood at Rs549.94 crore for FY19 as compared to Rs391.08 crore for FY18. The net profit increased by 39.94 per cent to Rs371.55 crore in FY19 from Rs265.51 crore in FY18. 

The company has been granted the patent for ‘Apparatus and Method for treating an industrial Effluent containing Sodium Sulphate’ by the Indian Patent Office. The grant of this patent will provide a recognition to Trident in making its surrounding eco-friendly by conserving water and reusing the same for its textile dyeing process. 

Trident is undertaking split of equity shares having nominal value of Rs10 each into nominal value of Re. 1 each. We recommend HOLD 

We had previously recommended Housing and Urban Development Corporation (HUDCO) in volume 34 issue no. 20, dated September 2 – 15, 2019 under the ‘Low Priced Scrip’ segment. It was recommended based on growth prospects, reducing NPAs and positive future outlook. HUDCO is a techno-financing public sector enterprise in the field of housing and infrastructure development in India. It is wholly owned by the Union Government and is under the administrative control of the Ministry of Housing and Urban Poverty Alleviation 

On the consolidated financial front, for Q2FY20, the company posted net sales of Rs2,044.73 crore, which is an increase by 67 per cent compared to net sales of Rs1,224.38 crore for Q2FY19. The PBDT increased by 79.71 per cent to Rs761.21 crore in Q2FY20 as against Rs423.58 crore in Q2FY19. The company’s net profit rose substantially to Rs725.84 crore in Q2FY20 compared to net profit of Rs282.14 core gained in Q2FY19. 

Thus it can be realised that HUDCO reported a remarkably high growth financials parameters during the second quarter. 

Looking at the annual financial trend, for FY19, the net sales of the company increased by 33 per cent YoY to Rs5,547.64 crore. PBDT increased by 32.14 per cent and stood at Rs1,868.51 crore for FY19 and Rs1,414.09 crore for FY18. The net profit climbed by 16.83 per cent to Rs1,180.15 crore in FY19 from Rs1,010.18 crore in FY18. Post our recommendation, the stock price has increased by around 21.11 per cent as on November 14, 2019. Thus, we suggest our investor-readers to BOOK PROFIT.