Query Board

Query Board

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

LINDE INDIA LIMITED

Linde India Limited (formerly BOC India Limited) has adapted global expertise to cater to the needs of the Indian industry. It owns and operates India’s largest air separation plant and runs more than 20 production facilities and filling stations across the country. The company follows the current year for the purpose of reporting its financial performance. In terms of the quarterly consolidated financials, net sales and other operating income for Q1CY21 was recorded at Rs441.42 crore, exhibiting a growth of 17.01 per cent from Rs377.26 crore in Q1CY20. Operating profit increased by 31.68 per cent from Rs103.47 crore in Q1CY20 to Rs136.24 crore in Q1CY21. The company’s net profit grew strongly and reached Rs302.61 crore in Q1CY21 as compared to net profit of Rs39.03 crore in Q1CY20. In terms of the annual consolidated financials, net sales declined by 16.5 per cent from Rs1,761.79 crore in CY19 to Rs1,471.12 crore in CY20. Operating profit shrunk by 6.47 per cent to Rs407.49 crore in CY20 versus Rs435.65 crore in CY19. The company recorded net profit of Rs149.40 crore in CY20 as compared to net profit of Rs727.18 crore in CY19, descending by 79.46 per cent. The PE multiple is expensive and the declining sales for the last couple of years are not confirming the hyped-up price. Hence, we recommend AVOID.

RBL BANK LTD



RBL Bank is one of India’s fastest growing private sector banks offering specialised services under business verticals of banking and financial operations. On the quarterly front, the net interest earned by the bank in the last quarter of FY21 came in at Rs2,014.55 crore as compared to Rs2,281.17 crore in the corresponding quarter of the previous fiscal, a shrink of 11.68 per cent. The total income in Q4FY21 was Rs2,704.9 crore, a decrease of 2.79 per cent from Rs2,782.77 crore in Q4FY20. The profit after tax squeezed 34.05 by per cent to reach Rs75.74 crore in Q4FY21 from Rs114.85 crore in Q1FY20. For Q4FY21 the GNPA percentage was 4.34 per cent as compared to 3.62 per cent in Q4FY20. Net interest earned by the bank in FY21 came in at Rs8,561.40 crore, a 2.47 per cent decrease from Rs8,778.65 crore in FY20. The total income earned by the bank in FY21 was Rs10,609.87 crore as compared to Rs10,609.69 crore earned in the previous fiscal, giving negligible change. The profit after tax in FY21 increased by 5.85 per cent to reach Rs529.47 crore whereas it stood at Rs500.18 crore in FY20. The company reported GNPA ratio of 4.34 per cent for FY21 and 3.62 per cent for FY20. Increasing stress can be witnessed in retail, MSME and MFI book, which warrants caution. Hence, we recommend AVOID. 

TATA CONSUMER PRODUCTS LTD

Tata Consumer Products Ltd. is an integrated food and beverage company. It stands amongst the top 10 food and beverage companies in India with a vision to become a multi-category FMCG major. The company was formed when the consumer products business of Tata Chemicals Ltd. blended with Tata Global Beverages Ltd. in February 2020. The beverages product portfolio spans tea, coffee, water and ready-to-drink beverages. The foods product portfolio comprises salt, pulses, spices, ready-to-cook mixes, breakfast cereals, snacks and mini-meals.

The company intends to be the consumer’s first choice in sustainable foods and beverages. In terms of the quarterly consolidated financials, net sales and other operating income for Q4FY21 was recorded at Rs3,037.22 crore, exhibiting a robust growth of 26.29 per cent from Rs2,405.03 in Q4FY20. Operating profit increased by a colossal 3.9 per cent from Rs330.29 crore in Q4FY20 to Rs343.16 crore in Q4FY21. The company reported a net profit at Rs133.34 crore in Q4FY21 as against a net loss of Rs50.21 crore in Q4FY21. In terms of the annual consolidated financials, net sales improved by 20.39 per cent from Rs9,637.42 crore in FY20 to Rs11,602.03 crore in FY21. Operating profit rose by 18.62 per cent to Rs1,665.11 crore in FY21 versus Rs1,403.74 crore in FY20.

The company posted net profit of Rs993.79 crore in FY21 as compared to net profit of Rs535.19 crore in FY20, gaining 85.69 per cent. It saw an accelerated top line for the India business whereas the international business chose to remain calm on the back of pantry loading in the base quarter. In line with the company’s strategic priority of exploring new opportunities, it has acquired 100 per cent stake in ready to drink (RTD) business of Nourish Co. It has also expanded the foods portfolio through acquisition of Kottaram Agro Foods (P) Ltd.’s Soulfull – now Tata Soulfull. Hence, having a bullish outlook on the acceleration of the growth trajectory of the company, we recommend BUY

CYIENT LIMITED

Cyient Ltd. is a global engineering and technology solutions company. The company engages with customers across their value chain helping to design, build, operate, and maintain products and services which build them as leaders and respected brands in their industries and markets. Cyient delivers services and solutions to a diversified base of over 300 customers, including 29 Fortune 500 companies, across multiple industries.

The company’s quarterly consolidated financials indicate that the net sales and other operating income for Q1FY22 stood at Rs1,058.20 crore, recording a rise of 6.71 per cent as compared to net sales and operating income of Rs991.70 crore for Q1FY21. The company recorded an operating profit for Q1FY22 at Rs212.10 crore, which gave an increase of 27.01 per cent as compared to an operating profit of Rs167 crore registered for the Q1FY21. Net profit for Q1FY22 was reported at Rs115 crore in comparison with net profit of Rs81.4 crore in Q1FY21, registering 41.28 per cent gains.

In terms of annual performance, the net sales and other operating income were reported to be Rs4,132.40 crore for FY21, which descended by 6.66 per cent when compared to Rs4,427.40 crore for FY20. FY21 reported an increase of 1.09 per cent in operating profit at Rs714.90 crore as compared to Rs707.20 crore for FY20. The net profit stood at Rs363.80 crore in FY21 in comparison with net profit of Rs343.8 crore reported in FY20, bagging 5.82 per cent gains. The company continues to expect double-digit growth in FY22 in services with growth accelerating from the second quarter of FY22.

Recently, the company announced its innovation platform ‘CyientfIQ’ to create technology-led solutions that deliver disruptive value for its customers. Additionally, Cyient has collaborated with IIT Hyderabad on 5G SoC design and has developed industry solutions using major digital technologies. Hence, we recommend HOLD.

(Closing price as of July 27, 2021)

 

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