Reviews

Reviews

In this edition, we have reviewed Petronet LNG Ltd. and Gujarat Pipavav Port Ltd. We suggest our reader investors to HOLD Petronet LNG Ltd. and Gujarat Pipavav Port Ltd.

We had previously recommended Petronet LNG Ltd. in Volume No. 34, Issue No. 25, dated November 11 – November 24, 2019, under the ‘Choice Scrip’ segment. The stock was then trading at Rs288.25 and was recommended based on the company’s sturdy growth momentum across segments, better performance than peers and strong product profile.

Looking at the quarterly trends, on a consolidated basis, the net sales for Q1FY21 decreased by 43.3 per cent to Rs4,883.57 crore from Rs8,613.44 crore reported for Q1FY20. It reported an operating profit of Rs978.32 crore for Q1FY21, thus contracting by 13.29 per cent compared to the operating profit of Rs1,128.32 crore posted for Q1FY20.

The company gained net profit of Rs520.23 crore in Q1FY21, which is a contraction of 7.15 per cent compared to the net profit of Rs560.27 crore gained in Q1FY20. Net sales for FY20 decreased by 7.67 per cent to Rs35,452 crore from Rs38,395.43 crore reported for FY19.

Operating profit of Rs4,353.04 crore was recorded for FY20, thus expanding by 16.42 per cent against operating profit of Rs3,739.24 crore posted for FY19. It gained net profit of Rs2,688.60 crore in FY20, which is an expansion by 25 percent compared to the net profit of Rs2,150.93 crore gained in FY19. The company has posted better quarterly results than what was expected owing to nationwide lockdown and reduction in imports. Now as demand is back to the pre-pandemic level, the stock is expected to perform better in the future.

Hence we recommend HOLD.



We had previously recommended Gujarat Pipavav Port Ltd. in Volume No. 34, Issue No. 25, dated November 11 – November 24, 2019, under the ‘Low Price’ segment. The stock was then trading at Rs88.4 and was recommended based on good growth prospects and higher profitability. Gujarat Pipavav Port is engaged in the business of port development and operations at Pipavav Port. Looking at the quarterly trends, on a consolidated basis, the net sales for Q1FY21 decreased by 10.5 per cent to Rs158.98 crore from Rs177.62 crore reported for Q1FY20. It reported an operating profit of Rs106.58 crore for Q1FY21, thus contracting by 7.14 per cent compared to the operating profit of Rs114.77 crore posted for Q1FY20.

The company gained net profit of Rs46.42 crore in Q1FY21, which is a contraction by 11.84 per cent compared to the net profit of Rs52.65 crore gained in Q1FY20. Net sales for FY20 increased by 4.76 per cent to Rs735.37 crore from Rs701.98 crore reported for FY19.

Operating profit of Rs493.68 crore was recorded for FY20, thus expanding by 13.72 per cent against operating profit of Rs434.11 crore posted for FY19. It gained net profit of Rs288.60 crore in FY20, which is an expansion by 40.35 per cent compared to the net profit of Rs205.63 crore gained in FY19. The company is spending about Rs700 crore on the expansion plan, which includes improving facilities for handling bigger ships and raising the container capacity. With improved capacity and rising demand, we expect the company to perform better. Hence we recommend HOLD .
(Closing price as of November 13, 2020)

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