Query Board

This section gives decisive investment rationales to our subscribers on the stock queries they have raised to our research team.

Jiya Eco-Products Limited (JEPL)​



Jiya Eco-Products Limited (JEPL) is engaged in the manufacturing of biofuels like bio briquettes and bio pellets energy from agricultural waste and forest waste such as cotton stalk, groundnut shells, cumin waste, forest leaves, household waste, juliflora, etc., which is an alternative source of other commonly used feed such as coal, charcoal, firewood, diesel, petrol and LPG, among others. Taking into account the quarterly trend, on a consolidated basis the net sales for Q2FY21 came in atRs -17.58 crore compared toRs54.88 crore reported in Q2FY20. The company reported an operating profit ofRs0.96 crore for Q2FY21. This was a decline by 88.72 per cent compared to the operating profit ofRs8.50 crore reported in Q2FY20. The company gained net profit ofRs0.23 crore in Q2FY21, contracting by 95.74 per cent fromRs5.42 crore gained in Q2FY20. On the annual front, the net sales were reported to beRs83.55 crore for FY20, thus registering de-growth of 60.82 per cent when compared toRs213.26 crore for FY19. In FY19, operating profit was reported to beRs7.65 crore, decreasing by 76.74 per cent compared toRs32.88 crore reported for Q2FY20. Jiya Eco-Products incurred net loss ofRs0.60 crore in FY20 as against net profit ofRs17.94 crore gained in FY19. Considering the company’s poor financial performance as well growth outlook, we recommend EXIT.

​Kanchi Karpooram Ltd. (KKL)



Kanchi Karpooram Ltd. (KKL) produces terpene and paper chemicals. The company serves a range of products from turpentine-based chemicals, such as camphor, dipentine, isobornyl acetate, and sodium acetate trihydrate. KKL has an opportunity to serve the largest paint and tyre manufacturers along with craft paper manufacturers of India. Taking a look at the company’s financials on a standalone quarterly basis, its net sales de-grew by 16.26 per cent toRs54.34 crore in Q2FY21 fromRs64.90 crore in Q2FY20. Operating profit ofRs26.31 crore was recorded in Q2FY21, up by 92.18 per cent as compared toRs13.69 crore reported in Q2FY20. The net profit gave an increase of more than 100 per cent atRs19.46 crore in Q2FY21 compared toRs9.30 crore in Q2FY20. On the annual front, the company reported net sales ofRs202.89 crore in FY20, an increase of 7.97 per cent as compared to net sales ofRs187.91 crore in FY19. The operating profit came in atRs37.31 crore in FY20 as compared toRs44.04 crore in FY19, a decline of 15.29 per cent on an annual basis. The profit after tax wasRs25.95 crore in FY20 as compared toRs28.28 crore in FY19, decreasing by 8.24 per cent. Global demand for terpene resins is expected to witness steady growth over the years, which will benefit the company. Regaining its financial performance for Q2FY21 will also supports its growth trend. Hence, we recommend BUY.

Oriental Aromatics Ltd.



Oriental Aromatics Ltd., which was formerly known as Camphor and Allied Products Ltd., is engaged in the production of fine chemicals. Perfumery chemicals and camphor and isoborneol are the principal products and services of the company. Working in the domestic as well as export segment, the company serves various industries, including flavours and fragrances, pharmaceuticals, soaps and cosmetics, rubber and tyre, and paints and varnishes. On a consolidated quarterly basis, its net sales de-grew by 9.95 per cent toRs183.84 crore in Q2FY21 as compared toRs204.16 crore in the second quarter of FY20. An increase was seen in operating profit ofRs49.06 crore in Q2FY21, up by 69.73 per cent as compared toRs28.84 crore reported in Q2FY20.

The net profit increased by 24.42 per cent atRs33.25 crore in the second quarter of FY21 compared toRs26.72 crore in the corresponding quarter of the previous fiscal year. On the annual front, the company reported net sales ofRs759.89 crore in FY20, increasing by 0.69 per cent as compared to net sales ofRs754.69 crore in FY19. The operating profit came in atRs133.84 crore in FY 20 as compared toRs116.27 crore in FY 19 , up by 15.11 per cent. Profit after tax was reported atRs86.19 crore in FY20 as compared toRs57.14 crore in FY19, rising by 50.83 per cent. Oriental Aromatics is one of the privileged few integrated manufacturers of fragrances and flavors as well as aroma chemicals globally. The company also aspires to become a global player in the specialty aroma chemicals and use these synergies to become one of the most prominent fragrance and flavor companies.

According to the company’s management, the growth outlook for camphor is very strong. The global pharmaceutical grade synthetic camphor market is expected to grow rapidly in the coming years. But overall, the key driver will be the aroma chemical vertical which will continue to remain the company’s focus. Also, OAL has a strong clientele and enjoys a large market share in its respective sectors with high growth potential. This will support OAL’s demand growth going forward. Hence, we recommend BUY. 

Larsen and Toubro Infotech Ltd.

Larsen and Toubro Infotech Ltd. is engaged in computer programming, consultancy and related activities. Its segments include industrial and service clusters. A range of services are offered by the company such as analytics and information management (AIM), consulting, Internet of Things (IoT), applications management, enterprise integration, Industrial Internet of Things (IIoT), system integration, assurance services, geographical information system (GIS) and infrastructure management. On a consolidated quarterly basis, its net sales grew by 16.64 per cent toRs2,998.40 crore in Q2FY21 as compared toRs2,570.70 crore in Q2FY20. The operating profit recorded in Q2FY21 wasRs722.20 crore, up by 29.13 per cent as compared toRs559.30 crore reported in the same quarter in the previous financial year.

Q2FY21 saw an increase in net profit of 26.75 per cent atRs456.80 crore as compared toRs360.40 crore in Q2FY20. On the annual front, the company reported net sales ofRs10,878.60 crore in FY20, an increase of 15.17 per cent as compared to net sales ofRs9,445.80 crore in FY19. The operating profit came in atRs2,358.50 crore in FY20 as compared toRs2,185.60 crore in FY19, increasing by 7.91 per cent. The company reported net profit ofRs1,520.50 crore in FY20, an increase by 0.33 per cent compared to the net profit ofRs1,515.50 crore posted in FY19.

Larsen and Tuobro infotech has been consistently delivering leading growth in revenues on a quarter on quarter and year on year basis.It aims to invest in its client’s breakaway success. During the calendar year 2020, the company continued to focus on expansion with acquisitions of Augment Data Sciences, Syncordis, Ruletronics, etc. The company was able to sustain through the pandemic and benefit from the trending IT sector’s growing demand. Ratings agencies have also accorded a high rating to the company on the basis of it having stable cash and liquid investments. Seeing the strong and growing financials along with prediction of the long-term sustainability of the company in the IT sector we recommend BUY.

​Reliance Industries Ltd. (RIL)

Reliance Industries Ltd. (RIL) operates in the refining, petrochemicals, oil and gas, organised retail, digital services and financial services’ segments. The refining segment includes production and marketing operations related to petroleum products. The petrochemicals segment includes production and marketing operations of petrochemical products. The oil and gas segment includes exploration, development and production of crude oil and natural gas.

The organised retail segment includes organised retail business in India. The digital services segment includes provision of a range of digital services in India and investment in the telecom infrastructure business. The financial services segment comprises management and deployment of identified resources of the company to various activities, including non-banking financial services and insurance broking.

On the consolidated quarterly front, the company’s net sales declined by 24.25 per cent toRs1,16,195 crore in Q2FY21 fromRs1,53,384 crore reported in Q2FY20. The operating profit decreased by 9.98 per cent toRs23,194 crore in Q2FY21 as compared toRs25,766 crore in Q2FY20. RIL reported net profit ofRs10,497 crore for Q2FY21, a decline of 7.09 per cent compared to the net profit ofRs11,298 crore reported in Q2FY20.On the annual front, the net sales rose by 4.99 per cent toRs6,11,645 crore in FY20 fromRs5,83,094 crore posted in FY19. Operating profit expanded by 10.39 per cent toRs1,02,173 crore in FY20 compared toRs92,553 crore in FY19. The company gained net profit ofRs39,773 crore in FY20 as compared to the net profit ofRs39,734 crore gained in FY19.

The calendar year 2020 has been fruitful for RIL, witnessing huge amount of investments into its Jio business. The RILFuture Group deal is an additional support for the company’s growth. Considering the company’s strong long-term growth potential, we recommend HOLD.

Tata Motors Ltd.

Tata Motors Ltd. is an automobile company engaged in the manufacture of motor vehicles and operates in 160 countries around the world. The company is engaged mainly in the business of automobile products consisting of all types of commercial and passenger vehicles, including financing of the vehicles sold by the company. Its segments include automotive operations and all other operations. In the automotive segment, the company manufactures and sells passenger cars, utility vehicles, light commercial vehicles, and medium and heavy commercial vehicles. Its other operational segments include information technology (IT) services and machine tools and factory automation services.

On a consolidated quarterly front, net sales fell by 18.41 per cent toRs52,839.02 crore in Q2FY21 fromRs64,763.39 crore in Q2FY20. The company reported operating profit ofRs6,731.52 crore in Q2FY21, decreasing by 12.77 per cent fromRs7,717.07 crore in Q2FY20. The company reported net loss ofRs343.28 crore in Q2FY21 as against net profit ofRs175.76 crore incurred in Q2FY20. On the annual front, the company reported net sales ofRs2,58,594.36 crore in FY20, contracting by 13.57 per cent fromRs2,99,190.59 crore in FY19. On the other hand, operating profit saw a decline of 24.14 per cent toRs20,960.22 crore in FY20 fromRs27,629.64 crore in FY19. Net loss ofRs10,975.23 crore was incurred in FY20 while it incurred net loss ofRs28,933.70 crore in FY19. Post the easing of lockdown restrictions, the demand in the automobile sector has seen a positive recovery. As a result, manufacturing and distribution activities have increased. The UK-EU trade deal has also brought about some respite regarding concerns about JLR which accounts for a majority of Tata Motors’ revenue. JLR’s launch of key electric vehicle variants will add to the revenue of Tata Motors. As for the company’s exports, global automobile demand is also seen recovering. The OEM is expected to benefit from this improving demand outlook, cost-cutting initiatives and better FCF generation. Hence, we recommend  ACCUMULATE.

(Closing price as of Jan 09, 2021)