Query Board
Bharat Petroleum Corporation Limited is engaged in offering motor spirit (MS), high-speed diesel (HSD) and liquefied petroleum gas (LPG). Its business includes refining of crude oil and marketing of petroleum products. The downstream petroleum segment includes refining and marketing of petroleum products.It is engaged in the production of liquid and gaseous fuels, illuminating oils, lubricating oils or greases or other products from crude petroleum or bituminous minerals. On a consolidated quarterly front, its net sales decreased by 3.80 per cent to Rs85,926.70 crore in Q3FY20 as compared to Rs89,324.86 crore in Q3FY19. PBDT for Q3FY20 stood at Rs3,041.28 crore, clocking a growth of 89.76 per cent as compared to Rs1,602.68 for Q3FY19. Net profit saw a significant jump to Rs1,616.49 crore in Q3FY20 from Rs477.61 crore in Q3FY19. On an annual basis, the company reported net sales of Rs3,40,879.15 crore in FY19, increasing 21.99 per cent from Rs2,79,437.99 crore in FY18. PBDT reduced by 2.43 per cent to Rs15,385.82 crore in FY19 from Rs15,769.64 crore in FY18. Net profit decreased by 10.73 per cent to Rs7,590.53 crore in FY19 as compared to Rs8,503.03 crore in FY18. The government’s stake sale in the company, which is expected to happen in FY21, is likely to usher in growth momentum. Thus, based on our analysis, we recommend our investor-readers to HOLD
Indian Railway Catering and Tourism Corporation (IRCTC) is engaged in offering internet ticketing, catering and tourism. The company offers catering and hospitality services at stations, on trains and other locations. On a quarterly consolidated front, the company reported net sales of Rs715.98 crore in Q3FY20, increasing by 64.59 per cent from Rs435.01 crore in the same period for the previous fiscal year. Operating profit came in at Rs270.42 crore in Q3FY20, increasing significantly by 140.57 per cent from Rs112.41 crore in Q3FY19. Similarly, in Q3FY20, net profit surged by 179.66 per cent to Rs205.8 crore from Rs73.59 crore in Q3FY19. On an annual front, the company reported net sales of Rs1,868.23 crore in FY19. For the current fiscal year, operating profit was reported at Rs475.92 crore and net profit was reported at Rs305.92 crore. The Railway Board has announced plans to hike prices of meals on-board Rajdhani, Shatabdi and Duronto trains, effective March 29, 2020. This would result in a slight increase in their fares which could benefit IRCTC’s revenue. The company is enjoying virtual monopoly with its business model offering major tourism-related services on all aspects under one roof. Taking into consideration the company’s strong earnings’ profile, diversified business segments, debt-free status, and most importantly, a high entry barrier to the business, we recommend BUY.
The Tata Power Company Limited is an integrated power company with principal businesses in the generation, transmission, distribution-cum-retail, power trading, power services, coal mines and logistics, strategic engineering for defence applications, solar photovoltaic (PV) manufacturing, and engineering, procurement and construction (EPC) services. Its power segment includes generation, transmission, and distribution and trading of electricity; the coal segment includes mining and trading and other segments. On the consolidated quarterly front, the net sales for Q3FY20 dropped by 11.42 per cent to Rs7,071.03 crore from Rs7,982.61 crore in Q3FY19 due to lower fuel revenues. But PBDT improved by 4.29 per cent as a result of improvement in the performance of Coastal Gujarat Power Limited (CGPL), which is a wholly-owned subsidiary of Tata Power that implemented the 4,000 MW Mundra Ultra Mega Power Project. The PBDT for Q3FY20 stood at Rs840.96 crore as compared to Rs806.39 crore for Q3FY19. The company gained a net profit of Rs79.45 crore in Q3FY20 which is a significant rise from Rs1.16 crore gained in the same quarter of the previous fiscal year. On the annual front, net sales increased by 10.13 per cent to Rs29,558.64 crore in FY19 from Rs26,840.27 crore in FY18. PBDT was reported to be Rs4,328.45 crore in FY19 which is a growth of 19.02 per cent as compared to Rs3,636.82 crore in the previous fiscal year. Subsequently, the net profit gained by Tata Power rose by 13.34 per cent to Rs1,279.23 crore as compared to Rs1,128.68 crore gained in FY18.
A drop in coal prices during the quarter has brought about an improvement in the performance of the Mundra plant. Tata Power continued to focus on deleveraging and repaid Rs2,250 crore debt YTD. The company has received approval from NCLT for sale of its defence business and expects to close the transaction by Q1FY21, thus further continuing deleveraging. With an increase in tariffs, the company will be able to produce more profits. Based on our analysis, we recommend HOLD .
Oil India Limited is engaged in providing crude oil and natural gas. Its business segments include crude oil, natural gas, LPG, pipeline transportation and more. It owns and operates approximately 10 drilling rigs and over 10 work-over rigs besides charter hiring drilling rigs based on operational requirement. It owns approximately 10 crude oil pumping stations and over 20 repeater stations spread across the eastern states of Assam, West Bengal and Bihar. Oil India is said to produce nearly five million metric standard cubic metres per day (MMSCUMD) of natural gas and has a pipeline network for collection and supply of gas as fuel and feedstock to various industries such as refineries, fertiliser, and petrochemical and power generation plants.
Looking at the quarterly trends on a consolidated basis, for Q3FY20 the company reported net sales of Rs2,957.19 crore, a decrease of 16.13 per cent as against net sales of Rs3,525.76 crore for the same quarter of the previous fiscal. PBDT also decreased by 42.46 per cent for Q3FY20 and was Rs1,071.93 crore as compared to Rs1,863.01 crore for Q3FY19. For the third quarter of FY19 the net profit also decreased by 67.84 per cent to Rs336.68 crore when compared to Rs1,046.90 crore in the third quarter of the previous fiscal. In terms of annual results, net sales saw an increase of 28.82 per cent to Rs13,780.45 crore in FY19 from Rs10,697.75 crore in FY18. The company reported PBDT of Rs5,067.06 crore in FY19, which is an increase of 15.58 per cent compared to Rs4,383.91 crore in FY18. On the other hand, the company gained net profit of Rs2,086.94 crore in FY19, which is a growth of 7.97 per cent compared to Rs1,932.81 crore gained in FY18.
Due to a decline in government dues and working capital, the company has been able to reduce its debt. Moreover, Oil India expects an improvement in the company’s performance by resuming operations at its plant in Paradip and Panipat. Hence,our advice is to HOLD.
Engineers India Limited (EIL) is an engineering, procurement and construction (EPC) and engineering consultancy company in the hydrocarbons and petrochemicals industry. It focuses on various sectors, including fertiliser and Liquefied Natural Gas (LNG), nonferrous metallurgy, infrastructure, strategic crude oil storage, nuclear and solar energy, and exploration and production. In addition, the company offers various technologies for petroleum refining, oil and gas processing and aromatics. On a consolidated quarterly front, its net sales grew impressively by 53.67 per cent in Q3FY20 to Rs899.16 crore from Rs585.12 crore in Q3FY19. This increase in sales was largely on account of higher revenue from the turnkey segment.
The company reported an operating profit of Rs150.39 crore in Q3FY20, up by 3.30 per cent from Rs145.59 crore in the corresponding period for the previous fiscal year. The company reported a net profit of Rs111.81 crore in Q3FY20, up by 19.49 per cent from Rs93.57 crore in Q3FY19. On an annual basis, net sales reported for FY19 was Rs2,475.79 crore, growing up 35.71 per cent from Rs1,824.31 crore in FY18. Operating profit for the current fiscal year was reported at Rs574.22 crore, down by 0.84 per cent from Rs579.09 crore in the previous fiscal year. Similarly, net profit fell by 3.59 per cent in FY19 to Rs369.55 crore from Rs383.31 crore in FY18.
There have been a number of initiatives and policy reforms undertaken by the Government of India such as Make in India, bio-fuels, Digital India and a renewed focus on infrastructure – especially ports and airports – and affordable housing, which have propelled large inflow of FDIs into the country. As a result, the energy demand is set to grow at an all-time high owing to rapid urbanisation and industrialisation, which will bode well for a company like EIL. Furthermore, the company has a strong order pipeline along with a balance-sheet that continues to remain healthy with zero debt, putting it in a good position to take advantage of future increase in demand for energy. Owingto this, we recommend a HOLD.
Gujarat Alkalies and Chemicals Limited is a chemical manufacturing company offering products which include caustic soda, chlorine, hydrochloric acid, hydrogen, chloromethanes, potassium hydroxide, potassium carbonate, sodium cyanide, sodium ferro cyanide, hydrogen peroxide and sodium chlorate, among others. The company exports products, such as potassium hydroxide flakes and liquid chlorine to Europe and West Asia, among others.
On a quarterly consolidated front, the company reported net sales of Rs655.58 crore in the quarter ended December 2019, down by 19.68 per cent from Rs816.26 crore reported in the quarter ended December 2018. Operating profit in Q3FY20 was recorded at Rs69.54 crore, down by 72.69 per cent from Rs254.64 crore reported in Q3FY19. The company reported a net profit of Rs59.58 crore in Q3FY20, down by 63.45 per cent from Rs163 crore reported in Q3FY19. On the annual front, net sales grew by 25.76 per cent in FY19 to Rs3,161.37 crore from Rs2,513.89 crore in FY18. The company reported an operating profit of Rs1,016.25 crore in FY19, increasing to 35.61 per cent from Rs749.41 crore in FY18. Similarly, net profit came in at Rs690.18 crore in FY19 as compared to Rs534.49 crore in the previous fiscal year.
Over the years, supply chain disruptions in China due to operational hazards, environmental compliance issues and higher cost of operations have resulted in growing preference for India as an alternative reliable supplier of chemicals. It is estimated that a 5-10 per cent business shift to India will more than double the opportunity size for many chemical companies. The current supply chain disruption in China due to the corona virus crisis presents Indian chemical industries with another such opportunity. Moreover, the company commenced 15,000 tonnes per annum (TPA) stable bleaching powder (SBP) plant at Dahej in February 2020, which is likely to lead to a boost in annual revenue.
Thus, we recommend a HOLD