Reviews

Reviews

In this edition, we have reviewed Siemens Ltd. and V-Guard Industries. We suggest our reader-investors to HOLD in Siemens Ltd. and V-Guard Industries

We had previously recommended Siemens Ltd. in Volume No. 34, Issue No. 24 under the ‘Analysis’ segment. The recommended price for the stock was Rs1,634.70. We had recommended the stock on the basis of the predicted growing trend pertaining to demand in automation and technology. Siemens is known as a pioneer in infrastructure and energy solutions, automation and software for the industry and a leader in medical diagnosis. The financial performance of the company shows that on a consolidated quarterly basis the net sales and other operating income was reported to be at Rs2,925.20 crore in Q3FY21 as compared to Rs2,537.00 crore in Q3FY20, giving an increase of 15.3 per cent. The operating profit has posted an increase of 3.68 per cent from Rs410.60 crore in Q3FY20 to Rs425.70 crore in Q3FY21.

The net profit surged up by 11.17 per cent in the quarter, registering at Rs295.50 crore in Q3FY21 as compared to net profit of Rs265.80 crore in Q3FY20. Meanwhile, on an annual basis the net sales and operating income dipped by 23.98 per cent from Rs13,083.90 crore in FY19 to Rs9,946.50 crore in FY20. The operating profit declined by 31.49 per cent in FY20 as compared to FY19. The net profit on annual basis decreased by 30.09 per cent, recording at Rs768.60 crore in FY20 as compared to Rs1,099.40 crore in FY19. The focus of the company is locked on driving profitable growth with digitalization being a key area. Along with advanced automation requirement, increased demand is also expected as customers commence on their digital transformation journey, which would involve investments in cloud-based digital services, data analytics solutions, productivity improvements, process simulation, cyber security, etc. Hence, we recommend HOLD.

We had previously recommended V-Guard Industries Ltd. in Volume No. 34, Issue No. 24 under the ‘Cover Story’ segment. The recommended price for the stock was Rs240. We had recommended the stock on the basis of its strong financial performance.

V-Guard Industries is a major electrical appliances’ manufacturer in India, and the largest in the state of Kerala. Having a look at the financial performance of the company, on a consolidated quarterly basis the net sales and other operating income was recorded at Rs835.04 crore in Q3FY21 as compared to Rs631.89 crore in Q3FY20, giving an increase of 15.3 per cent. The operating profit gave an increase of 80.19 per cent from Rs67.20 crore in Q3FY20 to Rs121.08 crore in Q3FY21. The net profit surged up by 76.86 per cent in the quarter which registered at Rs78.25 crore in Q3FY21 as compared to net profit of Rs44.24 crore in Q3FY20.

On the annual front the net sales and operating income dipped by 3.51 per cent from Rs2,594.01 crore in FY19 to Rs2,502.94 crore in FY20. The operating profit improved by 15.86 per cent in FY20 as compared to FY19.

The net profit on an annual basis increased 12.03 per cent, recording at Rs188.25 crore in FY20 as compared to Rs168.05 crore in FY19. The company has a robust business model with a diversified product portfolio and well-entrenched distribution system which is backed by an experienced management team with strong understanding of business complexities.

Going forward, the company intends to focus on building upon its competitive positioning in the consumer electricals, electronics and consumer durables industry. Hence, we recommend HOLD.

(Closing price as of May 03, 2021)

 

Rate this article:
No rating
Comments are only visible to subscribers.

DALAL STREET INVESTMENT JOURNAL - DEMOCRATIZING WEALTH CREATION

Principal Officer: Mr. Shashikant Singh,
Email: principalofficer@dsij.in
Tel: (+91)-20-66663800

Compliance Officer: Mr. Rajesh Padode
Email: complianceofficer@dsij.in
Tel: (+91)-20-66663800

Grievance Officer: Mr. Rajesh Padode
Email: service@dsij.in
Tel: (+91)-20-66663800

Corresponding SEBI regional/local office address- SEBI Bhavan BKC, Plot No.C4-A, 'G' Block, Bandra-Kurla Complex, Bandra (East), Mumbai - 400051, Maharashtra.
Tel: +91-22-26449000 / 40459000 | Fax : +91-22-26449019-22 / 40459019-22 | E-mail : sebi@sebi.gov.in | Toll Free Investor Helpline: 1800 22 7575 | SEBI SCORES | SMARTODR