Query Board
This section gives decisive investment rationales to our subscribers on the stock queries they have raised to our research team.
Jain Irrigation Systems Limited is an agri-business company which is engaged in the manufacturing of plastic products and also of fruit or vegetable juices and their concentrates, squashes and powder. Looking at the quarterly trends on a consolidated basis, for Q1FY21 the company reported net sales of Rs 1,387.62 crore, a decrease of 26.63 per cent as against net sales of Rs 1,891.32 crore for Q1FY20. For Q1FY21, the company gained an operating profit of Rs 52.81 crore, contracting by 79.66 per cent compared to the operating profit of Rs 259.63 crore gained in Q1FY20. Jain Irrigation Systems incurred net loss of Rs 158.29 crore in Q1FY21as against net profit of Rs 21.74 crore gained in Q1FY20. On the annual front, in FY20, the company reported net sales of Rs 6,215.81 crore, a decrease of 27.53 per cent over net sales of Rs 8,576.94 crore reported in FY19. For FY20, operating profit decreased by 97.33 per cent to Rs 31.96 crore from Rs 1,197.01 crore reported in FY19. In FY20, the company incurred net loss of Rs 721.19 crore as against net profit of Rs 250.48 crore posted in FY19. The company attributed significant drop in profits due to the ongoing pandemic and liquidity tightening. Also, the company has been bothered with missing interest payments and delay in debt servicing. Hence, AVOID.
India Cements Limited is a cement company. Some of the company’s popular brands include Sankar Super Power, Coromandel King and Raasi Gold. Looking at the quarterly trends on a consolidated basis, for Q1FY21 the company reported net sales of Rs 763.46 crore, a decrease of 48.98 per cent as against net sales of Rs 1,496.37 crore for Q1FY20. For Q1FY21, the company gained operating profit of Rs 164.64 crore – a contraction by 34.24 per cent compared to operating profit of Rs 250.36 crore gained in Q1FY20. India Cements gained net profit of Rs 19.74 crore in Q1FY21, which is a contraction by 71.38 per cent compared to the net profit of Rs 68.98 crore gained in Q1FY20.
On the annual front, in FY20 the company reported net sales of Rs 5,186.45 crore, a decrease of 10.12 per cent over the net sales of Rs 5,770.37 crore reported in FY19. For FY20, operating profit decreased by 4.28 per cent to Rs 636.48 crore from Rs 664.92 crore reported in FY19. India Cements gained net profit of Rs 53.46 crore in FY20, which is an expansion by 111.64 per cent compared to the net profit of Rs 25.26 crore gained in FY19. As business activities are now returning to normal, demand in the cement sector is also expected to increase. Hence, we recommend HOLD.
Camlin Fine Sciences (CFS) is a leading integrated manufacturer of the most preferred traditional antioxidants (shelf life solutions) available. CFS focuses on four key businesses– shelf life solutions, aroma ingredients, health and wellness and performance chemicals. Apart from offering high-quality traditional antioxidants for the food, pet food and animal nutrition industry, they have a product basket which can cater to a wide range of industries. Over the last three decades they have earned customer loyalty with their market knowledge and expertise, product offerings and customer service.
Looking at the quarterly trends on a consolidated basis, for Q1FY21 the company reported net sales of Rs 305.74 crore, an increase of 17.54 per cent, as against net sales of Rs 260.12 crore for Q1FY20. For Q1FY21, the company gained an operating profit of Rs 51.75 crore, expanding by 34.12 per cent compared to the operating profit of Rs 38.58 crore gained in Q1FY20. Camlin Fine Sciences gained a net profit of Rs 20.56 crore in Q1FY21, an expansion by 25.1 per cent compared to the net profit of Rs 16.43 crore gained in Q1FY20. On the annual front, in FY20 the company reported net sales of Rs 1,049.15 crore, an increase of 17.6 per cent over net sales of Rs 892.17 crore reported in FY19. For FY20, operating profit increased by 62.68 per cent to Rs 134.13 crore from Rs 82.45 crore reported in FY19.
Camlin Fine Science gained net profit of Rs 29.83 crore in FY20, which is a significant rise compared to the net profit of Rs 3.07 crore gained in FY19. The company’s Q1FY21 consolidated performance was above expectations on the revenue and PAT front. Its key business segments reported strong revenue growth. Further, the company’s performance is headed in the right direction. The key loss-making subsidiaries in Brazil and China are reaching a breakeven. Its US subsidiary is likely to reach above the breakeven, driven by recent large client wins. Hence, we recommend BUY.
Shiva Cement Limited (SCL) is a cement manufacturing company. The company is engaged in the dealing of cement and allied products. It offers various products, such as Portland Slag Cement (PSC), Portland Puzzolana Cement (PPC), clinker and limestone chips. Its PSC and PPC are used for general construction purpose. The company’s clinker is marketed to nearby standalone cement grinding units. It also produces characteristic size of limestone chips 3-6 millimeter (mm) as an input for Sponge Iron plants for de-sulfurization of steel.
Looking at the quarterly trends on a standalone basis, for the first quarter of FY21 the company reported net sales of Rs 8.24 crore, a decrease of 22.65 per cent as against net sales of Rs 10.65 crore for the corresponding quarter of the previous fiscal year. For Q1FY21, the company gained an operating profit of Rs 0.14 crore, expanding by 20.34 per cent compared to the operating profit of Rs 0.12 crore gained in the same quarter of FY20.
Shiva Cement incurred a net loss of Rs 4.13 crore in the first quarter of the current financial year which is equivalent to the net loss incurred in same quarter of the previous financial year. Looking at the annual front, in FY20 the company reported net sales of Rs 32.39 crore, an increase of 10.25 per cent over net sales of Rs 29.38 crore reported in FY19.
For FY20, the company incurred operating loss of Rs 8.23 crore as compared to the operating loss of Rs 6.57 crore reported in FY19. In FY20, the company incurred net loss of Rs 22.82 crore as against net loss of Rs 21.26 crore posted in FY19. The longterm growth prospects of the company look good. Post easing of lockdown, as conditions return to normalcy, the demand for thecompany’s products is expected to pick up.
Hence, we recommend HOLD.
South Indian Bank Limited is engaged in providing services related to retail and corporate banking and para-banking activities like debit card, third-party product distribution along with treasury and foreign exchange business. The treasury service segment includes interest earnings on investments portfolio, gains or losses on investment operations and earnings from foreign exchange business. Its corporate or wholesale banking segment mainly includes providing loans to the corporate segment whereas the retail banking segment includes providing loans to non-corporate customers.
On the quarterly front, the net interest earned by the bank in the first quarter of FY21 came in at Rs 1,886.88 crore as against Rs 1,894.85 crore in the corresponding quarter of the previous fiscal, clocking a de-growth of mere 0.42 per cent. The total income in Q1FY21 was Rs 2,171.86 crore, an increase of 4.57 per cent from Rs 2,076.76 crore in Q1FY20. The profit after tax rose by 11.45 per cent to reach Rs 81.65 crore in Q1FY21 as against Rs 73.26 crore in Q1FY20. For Q1FY21 the GNPA percentage was 4.93 per cent as compared to 4.96 per cent in Q1FY20. The CRAR ratio in Q1FY21 was 13.49 per cent and in Q1FY20 it was 12.17 per cent. On the annual front, the net interest earned by the bank in FY20 came in at Rs 7,763.80 crore, an increase of 12.90 per cent from Rs 6,876.52 crore in FY19.
The total income earned by the bank in FY20 was Rs 8,809.55 crore, an increase of 15.87 per cent from Rs 7,602.73 crore earned in the previous fiscal. The profit after tax in FY20 decreased by 57.74 per cent to reach Rs 104.59 crore as against Rs 247.53 in FY19. The company reported GNPA ratio of 4.98 per cent for FY20 and 4.92 per cent for FY19. In FY20, the CRAR ratio was 13.41 per cent whereas in FY19 it was 12.61 per cent. The bank intends to further expand its retail business and also strengthen its SME base. Going forward, growing deposits and improving digital and technological initiatives along with a sound asset base will be beneficial. Hence, we recommend HOLD.
Rail Vikas Nigam Limited (RVNL) is a special purpose vehicle (SPV) engaged in undertaking development projects. It is basically an organisation associated with Indian Railways whose task is to build engineering works required by the railway network. The company is focused on mobilising financial resources and implementing projects pertaining to reinforcement of the golden quadrilateral. It is engaged in creating and improving rail communication links to ports by construction of bridges and development of multi-modal transport corridors. A few of its rail infrastructure projects include Gooty-Renigunta patch doubling, Gandhidham-Palanpur gauge conversion, Vallaparpadm-Idapally new lines, Ranigunta-Guntakal railway electrification, etc.
From the financial point of view, on a consolidated basis, net sales of the company for Q1FY21 was Rs 2,910.83 crore as compared to the net sales of Q1FY20 of Rs 2,845.64 crore. So, there is a 2.29 per cent increase in total revenue of Q1FY21 as compared to that of Q1FY20. For Q1FY21 the PBDT stood at Rs 189.72 crore, which is a decrease of 5.46 per cent as compared to Rs 200.67 crore for Q1FY20. For Q1FY21 the company gained net profit of Rs 143.16 crore, a 4.59 per cent decrease in the net profit compared to Rs 150.06 crore for the same quarter of the previous fiscal year.
On the annual front, for FY20 the company recorded net sales of Rs 14,530.58 crore which is a 44.31 per cent increase when compared to the net sales of Rs 10,068.68 crore for FY19. The PBDT for FY20 stood at Rs 991.18 crore, expanding by 32.76 per cent from Rs 746.60 crore reported in FY19. For FY20, the net profit was recorded at Rs 769.90 crore which is a positive increase of 30.69 per cent compared to the net profit of Rs 589.12 crore for FY19. With the opening of the economy and resumption in projects, it is expected to drive growth. Hence, we recommend HOLD.
(Closing price as of September 22, 2020)