QueryBoard

Suzlon Energy Limited is engaged in the provision of renewable energy solutions.

SUZLON 

I have some shares of Suzlon bought at Rs7.10. Kindly tell me if I should hold or sell. 

- Tripathy 


Suzlon Energy Limited is engaged in the provision of renewable energy solutions. The company produces wind turbines. It offers a range of solar energy solutions, such as solar irradiance assessment, land acquisition and approvals, infrastructure and power evacuation, supply chain, installation and commissioning and life cycle asset management. Its manufacturing facilities for wind turbine generator components and rotor blades are located in India, Brazil and the United States. On the financial front, on a standalone basis, the company’s net sales for Q1FY19 stood at Rs761.98, down by 64.46 per cent YoY from Rs2144.27 crore in the same quarter of the previous year. The PBIDT of the company also fell by over 130 per cent from Rs274.91 crore in Q1FY19. However, the net loss of the company has narrowed to Rs334.28 crore in Q1FY19 as against Rs812.67 crore for the same quarter of the previous year. On the annual front, the company’s net sales for FY18 were Rs6166.48 crore, down by 33 per cent from Rs9245 recorded in FY17. The PBIDT fell by over 54 per cent and came in at Rs1033.38 crore in FY18 versus Rs2236.13 crore in FY17. The net loss posted by the company in FY18 was Rs1156.14 crore versus a net profit of Rs0.05 crore in FY17. The company has not been performing well financially and thus we would recommend our readerinvestor to EXIT the stock or slowly reduce exposure. 

JAIPRAKASH ASSOCIATES 

I bought JP Associates for Rs6.10. Kindly let me know if holding the stock would be beneficial or should I exit. 

- Tripathy 


Jaiprakash Associates Limited is a diversified infrastructure company. Its segments include construction, which includes civil engineering construction, procurement and construction (EPC) contracts. The company has operations in Haryana, Madhya Pradesh, Gujarat and Jharkhand, among others. On the financial front on a standalone basis, the net sales of the company in Q1FY19 has gone down 34 per cent YoY and stood at Rs1690.82 crore versus Rs1606.61 crore recorded in the same quarter of the previous year. The PBIDT of the company has dropped 80 per cent to Rs150.71 crore in the first quarter of FY19 versus Rs759 crore posted in Q1FY18. The company in Q1FY19 incurred a net loss of Rs258.02 crore as against a net profit of Rs746.99 crore in the same quarter of the previous year. On the annual front, the company’s net sales of the company have remained stable, dropping just 1 per cent to Rs6143.08 crore as against Rs6219.32 crore in FY17. The PBIDT of the company has however soared from Rs136.14 crore in FY17 to Rs1210.73 crore in FY18. The net profit in FY2018 although has narrowed down to Rs351.71 crore as against a net loss of Rs4361.57 crore in the previous fiscal. Keeping in mind the financial performance of the company, we can witness the downward sloping performance of the company. We would thus recommend our investor-readers to EXIT the stock.

SPML INFRA LIMITED 

I bought a small quantity of SPML Infra @ Rs100. I have no problem holding it for 5-6 years if it gives good return. Please guide 

- Alokmay 


SPML Infra Limited is engaged in infrastructure development. The company’s scope of business include construction and maintenance of water main and line connection, water reservoirs, including irrigation system (canal),construction and repair of sewer systems, including sewage disposal plants and pumping stations; construction and maintenance of power plants, and construction, erection and maintenance of power, telecommunication and transmission lines. The company’s business segments include construction, which includes execution of turnkey projects, and trading, which includes sale of steel items and coal, and hydro power,, which consists of electricity generated from hydel projects. 

On the financial front, on a standalone basis, the company reported stable net sales in Q1FY19 at Rs327.09 crore, up by 0.73 per cent, as against Rs324.72 crore in Q1FY18. The PBIDT of the company dropped by 7 per cent in Q1FY19 and stood at Rs47.859 crore as against Rs51.904 crore in the same quarter of the previous year. The profit after tax (PAT) rose by over 70 per cent in Q1FY19 as against Rs7.08 crore in the same quarter of the previous year. On the annual front, the net sales have fallen 20 per cent and came in at Rs1355.93 crore in FY18 as against Rs1701.25 crore in FY17. The PBIDT of the company grew by 21 per cent, posting PBIDT of Rs258.19 crore in FY18 as against Rs214.32 crore in FY17. The profit after tax (PAT) grew substantially from just Rs1.45 crore in FY17 to Rs43.12 crore in FY18.

On the valuation front, the company is currently available at a PE multiple of 4.38 on its TTM earnings as against the industry PE of 23.24x. The return on equity (RoE) stood at 10.44 per cent and the return on capital employed (RoCE) stood at 16.39 per cent. Owing to the abovementioned factors, financial performance of the company, especially the growth in PAT, we would recommend our investor-reader to HOLD for now and slowly reduce exposure if the stock price does not improve in the coming quarters. 

MARUTI SUZUKI 

Is it the right time to invest in Maruti Suzuki? 

- Solanki 


Maruti Suzuki is engaged in the manufacture, purchase and sale of motor vehicles, components and spare parts (automobiles). The company’s business also includes facilitation of pre-owned car sales, fleet management and car financing. Its geographical segments include the domestic segment, which includes sales to customers located in India, and the overseas segment, which includes sales to customers located outside India. The company’s product portfolio includes Alto 800, Alto K10, Wagon R, Celerio, Ritz, Swift, DZire, Ertiga, Omni, Eeco, Gypsy and Ciaz. Its service offerings include Maruti Finance, True Value, Maruti Genuine Parts, Maruti Genuine Accessories, Maruti Suzuki Auto Card and Maruti Driving School. It has approximately five plants located in Palam Gurgaon Road, Gurgaon, Haryana, and at Manesar Industrial Town, Gurgaon, Haryana, with an installed capacity of over 1.5 million vehicles per year. 

On the financial front, on a standalone basis, the net sales have remained stable at Rs21551.9 crore in the first quarter of FY19 as against Rs21438 crore in the same quarter of the previous fiscal. The PBIDT of the company has dipped 6 per cent on a YoY basis and stood at Rs3431 crore in Q2FY19 as against Rs3677.5 crore in the same quarter of the previous year. However, the PBIDT on a QoQ basis has gone up marginally by 2 per cent in Q2FY19 and came in at Rs3431 as against Rs3351.1 crore in Q1FY19. The profit after tax (PAT) has risen 13 per cent on a QoQ basis and in Q2FY19 to Rs2240.4 crore as against Rs1975.3 crore in the previous quarter of the same financial year. 

On the annual front, the company posted its net sales at Rs79,762.70 crore in FY18 as against Rs68,034 crore in FY17, up by 17 per cent. The PBIDT of the company has also risen 12 per cent and came in at Rs14107 crore in FY18 as against Rs7350 crore in FY17. The profit after tax (PAT) grew marginally by 5 per cent and stood at Rs7721.80 crore in FY18 while in the previous fiscal, it was Rs7350.20 crore. We recommend a BUY keeping an investment horizon of around 3 years. 

PIRAMAL ENTERPRISES 

I bought 5 shares of Piramal Enterprises Ltd (PEL) priced at Rs3050 for a period one year. What should I do, hold or sell? 

- Solanki 


Piramal Enterprises Limited (PEL) is engaged in the business of pharmaceuticals, including research and development, financial services and information management through its subsidiaries. The pharmaceutical business consists of manufacturing and sale of own and traded bulk drugs and formulations. It operates through three segments: healthcare, financial services and information management. Its healthcare segment includes pharma solutions, critical care, consumer products and imaging. Its financial services segment includes wholesale lending, alternative asset management and investments in Shriram Group. 

On the financial front, on a standalone basis, the company’s net sales went up 12.80 per cent and were reported at Rs904.94 crore in Q2FY19 versus Rs802.25 crore in Q2FY18. The PBIDt of the company witnessed a substantial jump of 64 per cent in Q2FY19 as against Rs314.18 crore in Q2FY18. Similarly, the profit after tax (PAT) shot up 137.79 per cent and stood at Rs358.26 crore in the second quarter of FY19, while in the same quarter of the previous year it was Rs150.66 crore. 

On the annual front, the net sales of the company has slipped slightly by 13 per cent and in FY18 and stood at Rs3288.63 crore versus Rs3766.21 crore in the previous fiscal. The PBIDT of the company on an annual basis has witnessed a drop of 15 per cent in FY18 at Rs1854.58 crore while in FY17 it was Rs2192.76 crore. The profit after tax (PAT) fell by 33 per cent and stood at Rs518.47 crore in FY18 as against Rs776.78 crore in FY17. 

On the valuation front, the company is currently available at a PE multiple of 8.20 on its TTM earnings as against the industry PE of 35.23x. The return on equity (RoE) stood at 2.9 per cent and the return on capital employed (RoCE) stood at 5.75 per cent. Looking at the financials and the company’s growth, we recommend a HOLD and advise to average the stock. 

8K MILES SOFTWARE SERVICES 

I have 100 shares of 8k Miles bought at Rs135. Is it better to hold or to sell. 

- Vishnu Rathore 


8K Miles Software Services Limited is an internet company focused on building solutions around cloud computing. The company’s products and services include data processing, software development and computer consultancy service as well as software supply services. The company’s cloud solutions offer cloud consulting, engineering and migration services. The company’s cloud operations span security, automation, analytics and big data. The company’s solutions include CloudEzSecure, CloudEzRx, CloudEzTry and CloudEzCare. Its primary sector focus is on the life sciences, healthcare and financial services. The company’s global footprint covers the United States, Canada, India and Singapore. 

On the financial front, on a standalone basis, the company’s net sales was reported 32.27 per cent higher in Q1FY19 at Rs14.693 crore as against Rs11.108 in Q1FY18. The PBIDT of the company on a YoY basis increased by over 100 per cent and stood at Rs4.03 crore in the first quarter of FY19 versus Rs1.936 crore in the same quarter of the previous year. The PAT witnessed a huge jump of more than 400 per cent and came in at Rs4.161 crore in Q1FY19 as against Rs0.712 crore in the same quarter of the previous year. 

On the annual front, the net sales have gone up 35 per cent and came in at Rs50.57 crore in FY18 as against Rs37.46 crore in FY17. The PBIDT was reported at Rs15.63 crore in FY18, while in FY17 it was Rs7.41 crore. The profit after tax (PAT) posted in FY18 was Rs4.88 crore, up almost 200 per cent from Rs1.63 crore in FY17. On the valuation front, the company is currently available at a PE multiple of 27.28 on its TTM earnings as against the industry PE of 20.46x. The return on equity (RoE) stood at 6.29 per cent and the return on capital employed (RoCE) stood at 11.37 per cent. The company has posted positive financial numbers, but there are lot of corporate governance issues with this stock. We would thus advise our investor-readers to EXIT the stock.

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