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Saven Technologies Limited provides software development and services.
It offers a range of software services from end-to-end development of new software and web solutions, enterprise application services to re-engineering and enhancement of legacy applications, application integration and ongoing maintenance. On the standalone financial front, the net sales for Q2FY20 were Rs 2.83 crore, increasing by 7.88 per cent as compared to Rs 2.63 crore for Q2FY19. PBDT for Q2FY20 was Rs 0.91 crore, up by 5.30 per cent from Rs 0.87 crore for Q2FY19. In Q2FY20, it gained a net profit of Rs 0.63 crore, registering a growth of 4.87 per cent as compared to Rs 0.60 crore gained in Q2FY19. Looking at the annual trend, the net sales grew by 26.31 per cent to Rs 10.61 crore in FY19 from Rs 8.40 crore in FY18. In FY19, PBDT stood at Rs 3.65 crore, up by 52.72 per cent YoY. The company gained a net profit of Rs 2.45 crore which is growth by 59.09 per cent from Rs 1.54 crore gained in FY18. A SIP is recommended which is a regular and periodic purchase of shares or units of securities wherein the transaction takes place on a consistent basis i.e. weekly, monthly or quarterly basis. Since Saven Technologies is a small-cap company with few monthly disclosures, its profit margin is currently very thin. But looking at its positive quarterly results, we recommend our investor-readers to BUY quarterly SIP on the scrip.
Black Rose Industries is a textile manufacturing company engaged in the manufacturing of organic and inorganic chemical compounds and in the wholesale of industrial chemicals. On a consolidated quarterly front, its net sales were reported at Rs 96.08 crore in Q2FY20, up by 23.85 per cent from Rs 77.58 crore reported in Q2FY19. The company reported an operating profit of Rs 7.1 crore in Q2FY20, up by 55.02 per cent from Rs 4.58 crore reported in Q2FY19. Its net profit grew to Rs 6.21 crore in Q2FY20 from Rs 2.92 crore reported in the same quarter for the previous fiscal year. On an annual basis, the net sales grew by 3.70 per cent to Rs 308.71 crore in FY19 as compared to Rs 297.7 crore in FY18. The company reported an operating profit of Rs 19.35 crore in FY19, up by 19.57 per cent to Rs 16.18 crore in FY18. Similarly, net profit grew by 18.13 per cent to Rs 13.88 crore as compared to Rs 11.75 crore in the previous fiscal year. Despite the slow economic conditions, the company has delivered a good performance owing to its wide product portfolio which serves a diversified user base. The company plans to expand the capacity of its acrylamide plant, with the additional capacity likely to the commissioned in H2FY20. Thus, the stock has seen a rally in the recent past. However, the valuation looks priced at the current price point. Hence, we recommend a SELL.
Reliance Communications Limited is a telecommunications service provider which operates through two segments, namely, India and global operations. Its Indian operations comprise of wireless telecommunications services to retail customers through Global System for Mobile (GSM) communication technology-based networks and its global operations comprise of carrier, enterprise and consumer business units. The company owns internet protocol (IP)- enabled connectivity infrastructure, comprising over 2,80,000 kilometres of fibre optic cable systems in India, the United States, Europe, the Middle East and the Asia Pacific region.
On a consolidated quarterly front, the company reported net sales of Rs 302 crore in Q2FY20, down by 69.09 per cent from Rs 977 crore in Q2FY19. The company incurred an operating loss of Rs 1,372 crore in Q2FY20 as against an operating profit of Rs 2,272 crore posted in Q2FY19. The company incurred a net loss of Rs 1,374 crore in Q2FY20 as against a net profit of Rs 1,306 crore gained in the same quarter for the previous fiscal year. On an annual basis, net sales fell by 12.58 per cent to Rs 4,015 crore in FY19 as compared to Rs 4,593 crore in the previous fiscal year. Largely on account of various exceptional items, the company reported an operating profit of Rs 1,558 crore in FY19 as against an operating loss of Rs 3 crore in FY18. The company incurred a net loss of Rs 867 crore in FY19 as compared to a net loss of Rs 19 crore incurred in the previous fiscal year.
Reliance Communication is non-operational and has lost most of its customers. The assets of the company are being auctioned and recently Reliance Jio and UVARC were recognised as the highest bidders for the assets of Reliance Communication and Reliance Telecom. Although the stock has some potential for speculative gains based on these news developments, there are no fundamental drivers for the stock to stay invested. Hence, we recommend our investor readers who have positions in this stock to take advantage of the volatility due to news developments and SELL.
Bajaj Hindusthan Sugar is engaged in the manufacturing of sugar, alcohol and power generation. It operates over 10 sugar plants with an aggregate sugarcane crushing capacity of around 1,36,000 tons crushed per day (TCD), six distilleries having an aggregate capacity to produce industrial alcohol of 800 kiloliters per day and over 10 co-generation plants having a total power generation capacity of approximately 450 megawatts. Its sugar mills are located at Golagokarannath, Palia Kalan, Kinauni, Thanabhawan, Budhana, Bilai, Barkhera, Khambarkhera, Gangnauli, Maqsoodapur, Pratappur, Rudauli, Utraula and Kundarkhi.
On a consolidated quarterly front, its net sales fell by 7.87 per cent to Rs 1,427.41 crore in Q2FY20 from Rs 1,549.37 crore in Q2FY19. The company incurred a net loss of Rs 89.82 crore in Q2FY20 as against a net profit of Rs 6.08 crore in the same quarter for the previous fiscal year. On an annual basis, net sales grew by 14.53 per cent to Rs 6,806.39 crore in FY19 from Rs 5,942.71 crore in FY18. The company incurred an operating loss of Rs 133.94 crore in FY19 as compared to an operating loss of Rs 504.53 crore incurred in FY18. The company incurred a net loss of Rs 136.57 crore in FY19 as compared to a net loss of Rs 499.64 crore in the previous fiscal year.
The large production of sugar in the country over the years has led to an excessive supply of sugar and has driven down prices of sugar in the markets. This price risk is regulated by the Government of India that has set a minimum selling price (MSP) for the commodity. Hence, the scope for growth in this industry is limited and dependent on government policy and subsidy support. Bajaj Hindustan Sugar has been making losses on a consolidated basis for the past seven years and also has a low promoter holding of 15 per cent. Moreover, the entire share of promoter holding is pledged which is discouraging in terms of corporate governance. On the basis of these issues, we recommend our reader-investors to AVOID this stock.
Nucleus Software Exports Limited is a provider of lending and transaction banking products to the financial services industry. The company’s products segment consists of license fee, revenue from customisation and implementation of products and post-production maintenance support. The projects and its services segment includes the software services rendered by the company consisting of development of software to meet specific customer requirements comprising application development and maintenance, testing, and consulting and infrastructure management services with a banking domain focus.
On the consolidated financial front, the net sales for Q2FY20 was Rs 128.22 crore which is an increase of 5.54 per cent as compared to net sales of Rs 121.49 crore for Q2FY19. The PBDT for Q2FY20 was reported to be Rs 31.95 crore which is an increase of 20.11 per cent as against Rs 26.60 crore reported for Q2FY19. There was an increase in the net profit by 10.19 per cent for the second quarter of FY20 to Rs 21.09 crore when compared to Rs 19.14 crore for the same quarter of the previous fiscal year.
Looking at the annual trend, the net sales were reported to be Rs 484.03 crore for FY19, thus increasing by 17.54 per cent when compared to Rs 411.81 crore for FY18. In FY19, PBDT also increased by 22.23 per cent to Rs 106.22 crore as against Rs 86.90 crore for FY18. For FY19, the company’s net profits registered a growth by 19.17 per cent to Rs 74.54 crore in FY19 as compared to Rs 62.55 crore in FY18.
A systematic investment plan (SIP) is regular and periodic purchase of shares or units of securities of a fund or other investment so as to invest small sums of money over a longer period of time wherein the transaction takes place on consistent basis i.e. weekly, monthly or quarterly basis. The company can be seen reporting growing annual sales and profits; however, the PAT margin through the years has been inconsistent. Since the stock price is volatile, we recommend BUY on a quarterly SIP basis.
Nestle India Limited is a food and beverage company and has a strong presence in the FMCG industry in India. It is a subsidiary of Nestle S.A. of Switzerland. The company operates through eight manufacturing facilities and four branch offices spread across the country. The company’s product portfolio takes up about 85 per cent of the FMCG market share in India.
The company follows a January to December calendar year for its business activities. In Q3CY19, revenue from operations increased by 9.49 per cent YoY to Rs 3,199.31 crore from Rs 2,921.99 crore in Q3CY18. PBDT stood at Rs 777.91 crore for Q3CY19 and Rs 764.77 for Q3CY18. As a result of better marketing strategies and digital advertisement expenses, the net profit expanded by 33.47 per cent YoY to Rs 595.41 crore in Q3CY19 from Rs 446.11 crore in Q3CY18.
On the annual front, for CY18, net sales grew by 10.67 per cent to Rs 11,216.23 crore from Rs 10,135.11 crore in CY17. Thus, in CY18, the revenue from operations expanded by 10.79 per cent and was Rs 11,292.27 crore as against Rs 10,192.18 crore in the previous year. After adjusting the expenses, PBT for CY18 stood at 2,428.95 crore, an increase of 32.05 per cent from Rs 1,839.3 crore in CY17. The margins were positive even after being affected due to higher input costs. Compared to the net profit of Rs 1,225.19 crore in CY17, Nestle India’s net profit in CY18 was Rs 1,606.93 crore, an increase of 31.16 per cent.
The company’s domestic sales have witnessed a positive growth momentum during the recent quarters. The company’s growth can be attributed to capacity expansion of its production facilities as well as re-launch of the popular cocoa-malt beverage ‘Milo’. It has been reporting improved performance overall but with weaker exports and volatility in commodity prices, the margins could witness pressure due to limited upside potential. Hence, we recommend our investor-readers to BOOK PROFIT.