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Suven Life Sciences is a biopharmaceutical company engaged in the business of manufacture and sale of bulk drugs and intermediaries. On a consolidated quarterly front, net sales grew significantly to  Rs274.31 crore in Q2FY20 as compared to  Rs89.52 crore in Q2FY19. The operating profit jumped to  Rs99.65 crore in Q2FY20 from  Rs10.70 crore in Q2FY19. Net profit saw a significant jump to  Rs63.31 crore in Q2FY20 from  Rs3.86 crore in Q2FY19. On an annual basis, the company reported net sales of  Rs663.5 crore in FY19, increasing 6.12 per cent from  Rs625.25 crore in FY18. The operating profit of the company fell by 18.81 per cent to  Rs158.74 crore in FY19 from  Rs195.52 crore in FY18. Net profit decreased by 29.71 per cent to  Rs86.94 crore in FY19 as compared to  Rs123.68 crore in FY18. The CRAMs business is now to be listed separately as Suven Pharmaceuticals (SPL) and what now remains of Suven Life Sciences (SLSL) is the residual innovation business. Due to the 1:1 split, you will get 500 shares of SPL. Post demerger, Suven Pharmaceutical is expected to have better earnings and SLSL is likely to become a takeover target for a big pharmaceutical interested in IP of matured molecules. Since both SLSL and SPL have good long-term prospects, we recommend a HOLD.

PVR Limited is a film entertainment company engaged in motion picture exhibition in cinemas. It has three business segments, namely, movie exhibition, movie production and distribution, and others. On the consolidated financial front, the company has reported an increase of 8.61 per cent in net sales to  Rs915.74 crore for Q3FY20 as compared to net sales of  Rs843.11 crore for Q3FY19. For Q3FY20 the company reported a 37.41 per cent rise in the PBDT to  Rs193.33 crore from  Rs140.70 crore for Q3FY19. Macroeconomic headwinds and weak regional growth resulted into a 34.24 per cent decrease in the company’s net profit to  Rs36.41 crore for Q3FY20 from  Rs55.37 crore gained in Q3FY20. On an annual basis, net sales increased by 32.19 per cent to  Rs3,085.56 crore for FY19 from  Rs2,334.11 crore for FY18. The PBDT of the company increased by 40.87 per cent to  Rs491.46 crore for FY19 as compared to  Rs348.88 crore for FY18. In FY19, the net profit grew by 52.72 per cent to  Rs190.52 crore from  Rs124.75 crore recorded in FY18. PVR has a strong growth momentum driven by its extensive reach, premium offering and stable content performance. The company’s management is expecting slower recovery in growth from advertising revenue with the under-taking of new initiatives. As PVR continues to reduce its business volatility by adding screens, we recommend a BU Y

Vodafone Idea is a telecommunication services company that provides pan-India voice and data services across 2G, 3G and 4G platforms. It also provides communica-tion solutions to global and Indian corporations, public sector and government bodies, and start-ups. Its enterprise offerings include enterprise mobility, connectivity, Internet of Things (IoT) solutions, business communication, and cloud and insightful business analytics and enabling solutions.

On a consolidated quarterly front, net sales grew by 41.50 per cent to  Rs10,844 crore in Q2FY20 from  Rs7,663.5 crore in Q2FY19. The company incurred an operating loss of  Rs36,959.2 crore in Q2FY20 as compared to an operating loss of  Rs5,019.1 crore incurred in Q2FY19. A net loss of  Rs50,921.9 crore was incurred in Q2FY20 as compared to a net loss of  Rs4,973.8 crore incurred in Q2FY19. On an annual basis, net sales reported for FY19 was  Rs37,092.5 crore, increasing 31.17 per cent as compared to  Rs28,278.9 crore in FY19. The company incurred an operating loss of  Rs18,175.4 crore in FY19 as compared to an operating loss of  Rs6,499.2 crore incurred in FY18. A net loss of  Rs14,603.9 crore was incurred in FY19 as compared to net loss of  Rs4,168.2 crore incurred in FY18.

In November 2019, the Supreme Court of India passed an order in favour of the DoT on a long-pending industry-wide case of the definition of ‘adjusted gross revenue’. The government has estimated Vodafone Idea’s dues to be more than  Rs53,000 crore, including over  Rs28,000 crore in licensing fee, interest and penalties, making its dues to be the highest among the top telecom operators in India. The company expressed doubts about continuing as a going concern if it was made to pay the entire AGR due amount. The total debt in the company has more than doubled from  Rs55,054 crore in March 2017 to around  Rs1,25,939 crore in March 2019 which is a major concern as the company may not be able to sustain this levels when it has been reporting a shrinking subscriber base. Owing to the company’s current predicament, we recommend a SELL.

Capacite Infraprojects is a construction company focused on residential, commercial and institutional buildings. It provides end-to-end construction services for residential buildings, multi-level car parks, corporate office buildings, buildings for educational, hospitality and healthcare purposes. In addition, the company provides mechanical, electrical and plumbing and finishing work.

On a consolidated quarterly front, the company reported net sales of  Rs405.57 crore in Q2FY20, decreasing by 8.46 per cent to  Rs443.07 crore in Q2FY19. The company reported an operating profit of  Rs31.06 crore in Q2FY20, falling by 14.97 per cent as compared to an operating profit of  Rs36.53 crore for the same quarter in the previous fiscal year. On the other hand, the company reported a 69.26 per cent increase in net profit to  Rs39.98 crore in Q2FY20 as compared to  Rs23.62 crore of net profit in Q2FY19. Looking at the annual trends, the net sales saw growth of 34.04 per cent to  Rs1,797.6 crore in FY19 as compared to  Rs1,341.08 crore in FY18. The company reported an operating profit of  Rs148.98 crore in FY19, up by 23.46 per cent as compared to an operating profit of  Rs120.67 crore in the previous fiscal year. Net profit saw growth of 22.27 per cent in FY19 to  Rs97.28 crore from  Rs79.56 crore in FY18.

Under government schemes like the Pradhan Mantri Awas Yojana (PMAY), the GOI aims to provide affordable housing to the urban poor with the mission to provide housing for all by the year 2022. In the recent budget too, the government has extended an additional  Rs1.5 lakh tax benefit on affordable housing loans. These government initiatives for the sector along with the revision to Income Tax slabs should provide relief to homebuyers and is likely to spur growth in residential construction. The company has shown improvement in operational efficiencies across projects which have helped to reduce the cost of direct subcontractors and allied process.

Thus, we recommend a HOLD

State Bank of India is an Indian multinational, public sector banking and financial services company. Headquartered in Mumbai, Maharashtra, it is one of India’s largest bank having 23 per cent market share in assets and one-fourth market share of the total loan and deposit market. The company provides a range of products and services catering to the needs of individuals, commercial enterprises, large corporates, public bodies and institutional customers Some of its service segments include investment portfolio and trading in foreign exchange contracts and derivative contracts, corporate accounts group, stressed assets management group, retail banking, personal banking, etc. Other non-banking activities include subsidiaries and joint ventures like SBI Life Insurance and SBI General Insurance. It has approximately 22,500 branches and 58,000 ATMs. 

On the financial front, the total interest income of the bank rose by 8.70 per cent YoY to  Rs67,692 crore for the third quarter of FY20 as against  Rs62,277 crore for the same quarter of the previous fiscal. Evaluating the asset quality, the GNPA ratio was 6.94 per cent in Q3 of FY20, down by 177 bps when compared to 8.71 per cent in Q3 of FY19. The net operating profit for Q3FY20 rose by 44.34 per cent YoY to  Rs18,223 crore as against  Rs12,625 crore in Q3 of the previous fiscal. The gross advances also remained strong with 6.79 per cent YoY growth at  Rs23,01,669 crore in Q3FY20 as against  Rs21,55,316 crore in the same quarter of the previous fiscal. The capital adequacy ratio for Q3FY20 was 13.73 per cent and 12.77 per cent for Q3FY19. Considering the financials on the annual front, the total interest income rose by 18.03 per cent to  Rs88,349 crore in FY19 from  Rs74,854 crore in FY18. The net operating profit decreased by 6.85 per cent to  Rs55,436 crore in FY19 as compared to  Rs59,511 crore in FY18. 

The bank has consistently delivered a sustainable performance. SBI has posted higher recoveries and upgrades during Q3FY20 with an improvement in asset quality as well. Hence, we would recommend a HOLD to our investor-readers on the basis of strong financials of the company.

Venky’s (India) Limited is engages in the production of day-old layer and broiler chicks for the Indian poultry markets. It offers a range of products such as day-old commercial chicks, grown-up commercial broiler, refined oil and de-oiled cake for poultry feed. The poultry and poultry products segment consists of production and sale of day-old broiler and layer chicks, specific pathogen-free eggs, processed chicken products and poultry feed whereas its animal health products segment produces and sells medicines and other health products for birds manufactured at a facility located in Pune. The oilseed segment produces and sells edible refined soya oil and soya de-oiled cake. 

On the standalone financial front, in the third quarter of the current fiscal year, the company reported net sales of  Rs814.66 crore which is an increase of around 26.20 per cent compared to the net sales of  Rs645.54 crore in the corresponding quarter of the previous fiscal year. PBDT decreased by 96.34 per cent to  Rs0.59 crore in the third quarter of FY20 as against  Rs16.11 crore in the third quarter of FY19. The company gained a net profit of  Rs13.59 crore for the recently ended quarter of the current fiscal year, thus, significantly increasing from  Rs5.48 crore gained in the same quarter of the last fiscal year.

On the annual front, the company’s net sales in FY19 were  Rs3,043.14 crore which is a 13.29 per cent increase from the net sales of the previous fiscal year. PBDT for FY19 decreased by 16.22 per cent to  Rs305.87 crore compared to  Rs365.09 crore of FY18. In FY19 the company’s net profit decreased as well by 12.80 per cent YoY to  Rs174.14 crore from  Rs199.71 crore in FY18. The company has been posting an increase in sales volumes and has also managed to reduce debt over the years. The company’s total debt was  Rs544.80 crore for FY17, further reducing to  Rs350.42 crore in FY18 and to  Rs267.61 crore by FY19. 

We recommend the reader-investors to HOLD the stock



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