Query Board
This section gives decisive investment rationales to our subscribers on the stock queries they have raised to our research team.
BSE LIMITED
Established in 1875, BSE (formerly known as Bombay Stock Exchange), provides an efficient and transparent market for trading in equity, currencies, debt instruments, derivatives, mutual funds. The company’s quarterly consolidated financials recorded net sales and other operating income for the Q1FY22 at Rs156.95 crore recording a strong rise of 52.05 per cent as compared to net sales and operating income of Rs103.22 crore for Q1FY21. The company recorded an operating profit for Q1FY22 at Rs70.08 crore which zoomed robustly by 55.32 per cent as compared to an operating profit of Rs45.12 crore registered for the Q1FY21. The net profit of Q1FY22 cheered the company at Rs38.26 crore as against net profit of Rs22.34 crore in Q1FY21, recording gain of 71.26 per cent. In terms of annual performance, the net sales and other operating income were reported to be Rs501.37 crore for FY21, which ascended by 11.29 per cent when compared to Rs450.51 crore for FY20. FY21 reported an increase of 47.55 per cent in operating profit being at Rs192.12 crore as compared to Rs130.21 crore for FY20. The net profit stood at Rs98.55 crore in FY21 in comparison with net profit of Rs93.96 crore reported in FY20, growing by 4.89 per cent. The company has reported lower sales growth over the last decade. It also bears low returns on investment. Hence, we recommend EXIT
THERMAX LTD.
Thermax Group is a company headquartered in Pune, India. Its business portfolio includes products for heating, cooling, water and waste management, and specialty chemicals. In terms of the quarterly consolidated financials, net sales and other operating income for Q1FY22 was recorded at Rs1,052.36 crore, recording a gain of 58.26 per cent from Rs664.94 crore reported in Q1FY21. Operating profit improved significantly from Rs9.53 crore in Q1FY21 to Rs88.43 crore in Q1FY22. The company reported a net profit at Rs42.40 crore in Q1FY22 as against net loss of Rs15.27 crore recorded in Q1FY21. On an annual basis, net sales descended by 16.4 per cent from Rs5,731.31 crore in FY20 to Rs4,791.25 crore in FY21. Its operating profits squeezed by 8.54 per cent to Rs462.93 crore in FY21 versus Rs506.18 crore in FY20. The company earned a net profit of Rs206.58 crore in FY21 as compared to a net profit of Rs212.45 crore in FY20, giving a decline of 2.76 per cent. The sequential revenue of the company has seen a downfall. However, the higher input costs pose a major threat and also it has delivered low returns on equity. Moreover, promoter holding has shrunk by 3.6 per cent over the last three years. The price multiple is a bit expensive and hence we recommend to AVOID investing in this stock.
BANDHAN BANK LTD.
Bandhan Bank Ltd. is an Indian banking and financial services company, headquartered in Kolkata, West Bengal. In its journey from an NGO to an NBFC and finally a universal bank, the objective has remained reaching out to the unbanked and the under-banked and providing last-mile banking for all, big or small. The bank is present in 34 out of 36 states and union territories of India, with 5,596 banking outlets and more than 2.35 crore customers.
On the quarterly front, the company reported net interest income of Rs3,410.01 crore for Q1FY22 which is an increase by 12.98 per cent compared to the net interest income of Rs3,018.08 crore reported for Q1FY21. The total income for Q1FY22 rose by 15.81 per cent to Rs3,943.37 crore from Rs3,404.84 crore posted in Q1FY21. Profit after tax was reported at Rs373.08 crore for Q1FY22 which is 32.14 per cent decline compared to the profit after tax of Rs549.81 crore posted for Q1FY21. For Q1FY22 the GNPA percentage was 8.18 per cent as compared to 1.43 per cent in Q4FY20. The CRAR ratio in Q1FY22 was 24.81 per cent and in Q1FY21 it was 26.45 per cent.
Net interest earned by the bank in FY21 came in at Rs12,524.21 crore, an increase of 15.05 per cent from Rs10,885.49 crore in FY20. The total income earned by the bank in FY21 was Rs14,633.27 crore, an increase of 17.68 per cent from Rs12,434.69 crore earned in the previous fiscal. The profit after tax in FY21 decreased by 27 per cent to reach Rs2,205.45 crore as against Rs3,023.73 in FY20. The company reported GNPA ratio of 6.81 per cent for FY21 and 1.48 per cent for FY20. In FY21, the CRAR ratio was 23.47 per cent whereas in FY20 it was 27.43 per cent.
Collections are predicted to continue to improve with restrictions getting relaxed. Usually, the second half of the financial year is always better for the bank in terms of growth and collections. With easing of the second wave and upcoming festive season, the bank is confident of achieving better performance going forward. Hence, we recommend a BUY
CADILA HEALTHCARE LTD
Zydus Cadila is headquartered in Ahmedabad, India, and ranks 4th in the Indian pharmaceutical industry. As one of the key players amongst the pharmaceutical manufactur-ing companies, the group has manufacturing capabilities across the entire pharmaceutical value chain, including formulations, APIs, vaccines, biosimilars, complex products (transdermals, topical etc.), animal health products and wellness products.
Analyzing the company's quarterly consolidate performance, the net sales and other operating income for the Q1FY22 stood at Rs4,025.40 crore recording a rise of 14.53 per cent as compared to net sales and operating income of Rs3,514.60 crore for Q1FY21. The company recorded an operating profit for Q1FY22 at Rs964.60 crore which gave an increase of 18.65 per cent as compared to an operating profit of Rs813 crore registered for the Q1FY21. Net profit for Q1FY22 jumped up by 35.24 per cent and was reported at Rs635.50 crore in Q1FY22 in comparison with net profit of Rs469.90 crore in Q1FY21.
On the annual front, the net sales and other operating income were reported to be Rs15,102.20 crore for FY21, improving by 5.96 per cent when compared to Rs687.24 crore for FY20. FY21 reported an increase of 16.6 per cent in operating profit being at Rs3,378.20 crore as compared to Rs2,897.30 crore for FY20. The net profit stood at Rs2,137.60 crore in FY21 in comparison with net profit of Rs1,175.60 crore reported in FY20, bagging gains of 81.83 per cent.
The margins of the company have expanded despite the cost inflation. Efficiency enhancement initiatives which were taken during the quarter are likely to benefit the margins, the effect of which will be seen in upcoming quarters. Growth momentum in the business is expected to continue led by new launches in injectable and generic products, research and development investment, strong development pipeline (417 ANDAs, 325 approvals), rapid capacity enhancement and focus on diversified portfolio. Hence, we recommend HOLD.
POLYCAB INDIA LTD.
Polycab is engaged in the business of manufacturing and selling wires and cables and fast-moving electrical goods ‘FMEG’ under the ‘POLYCAB’ brand. Apart from wires and cables, it manufactures and sells FMEG products such as electric fans, LED lighting and luminaires, switches and switchgear, solar products and conduits and accessories. The company manufactures and sells a diverse range of wires and cables. The company’s EPC business includes the design, engineering, supply, execution and commissioning of power distribution and rural electrification projects.
The company’s quarterly consolidated financials reveal that net sales and other operating income for the Q1FY22 at Rs1,880.52 crore recording a rise of 92.56 per cent as compared to net sales and operating income of Rs976.60 crore for Q1FY21. The company recorded an operating profit for Q1FY22 at Rs164.641 crore which grew by 80.71 per cent as compared to an operating profit of Rs91.10 crore registered for the Q1FY21. Net profit for Q1FY22 was stood at Rs77.4 crore as against net profit of Rs118.72 crore in Q1FY21, dipping by 34.8 per cent. In terms of annual performance, the net sales and other operating income were reported to be Rs8,926.54 crore for FY21, which rose by 1.09 per cent when compared to Rs8,829.95 crore for FY20. FY21 reported an increase of 5.49 per cent in operating profit being at Rs1,295.20 crore as compared to Rs1,227.82 crore for FY20. The net profit stood at Rs886.14 crore in FY21 in comparison with net profit of Rs773.03 crore reported in FY20, growing by 14.63 per cent.
A substantial recovery can be predicted in the B2B segment of the company and growth will be supported by its expanding presence in the domestic markets as well as increasing exports moving forward. Additionally, its growth in the B2C and FMEG segments is likely to be driven by demand recovery, new product launches, and product premiumization. Also, the company has launched ‘Project Leap’ and has set a target of over Rs20,000 crore revenues in the coming five years. Hence, we recommend a BUY.
BLS INTERNATIONAL SERVICES LTD
A trusted global tech-enabled services partner for governments and citizens, BLS International is amongst the top three players globally in this domain. It is a preferred partner for embassies and governments across the world, having an impeccable reputation for setting benchmarks in the domain of visa, passport, consular, e-governance, attestation, biometric, e-visa and retail services. It also provides citizen services to state and provincial governments.
Looking at the quarterly consolidated performance of the company, the net sales and other operating income for the Q1FY22 stood at Rs178.53 crore, growing significantly as compared to net sales and operating income of Rs52.14 crore for Q1FY21. The company recorded an operating profit of Rs22.59 crore for Q1FY22 which gave a robust increase as compared to an operating profit of Rs6.29 crore registered for the Q1FY21. Net loss of Rs0.80 crore Q1FY21 turned into net profit of Rs39.72 crore in Q1FY22.
On the annual front, the net sales and other operating income were reported to be Rs478.37 crore for FY21, declining by 39.15 per cent when compared to Rs786.14 crore for FY20. FY21 reported a decrease of 39.45 per cent in operating profit being at Rs58.36 crore as compared to Rs96.40 crore for FY20. The net profit stood at Rs50.33 crore in FY21 in comparison with net profit of Rs52.38 crore reported in FY20, going down by 3.91 per cent.
Recently, the company signed a contract with The Republic of Philippines Department for providing e-passport renewal services on behalf of The Republic of Philippines in Italy, Qatar and Malaysia. Travel has been one of the most affected sectors due to the pandemic, especially international travel. Still, the company has reported a resilient quarter. It is expected to give a better one consequentially. The rise in topline was mainly due to increase in revenue from the non-visa businesses. The fact that other businesses have contributed attractively in revenues depicts that the company is not solely dependent on visa business. Hence, we recommend HOLD.
(Closing price as of Sept 03,2021)