Reviews

In this edition, we have reviewed CMI and Kanoria Chemicals. We suggest our reader-investors to BOOK PROFIT in CMI and HOLD in Kanoria Chemicals.


We had recommended CMI in Volume 33, Issue No. 22, dated Oct 1–14, 2018 under the ‘Cover Story’. The stock of the company was then trading at Rs.151. We had recommended the stock looking at the attractive valuations, growth prospects in the infrastructure segment and the rise in demand in the telecom sector. CMI Limited is a cable manufacturing company involved in the entire process chain from development, design and manufacture to marketing and distribution of cables. 



The company’s product portfolio includes electric cables for railways, metros, utility, buildings, data transmission, instrumentation, submarine cables, special cables and extra high voltage (EHV) cables. Its product range consists of catenary wire, lowsmoke zero halogen cables, jelly-filled telecom cables, field bus cables, profibus cables, telephone cables, fire resistant wires and flexibles, mining cables, nuclear cables, among many others.

On the financial front, the net sales in Q2FY19 stood at Rs.103.31 crore, up by 14.79 per cent from Rs.89.99 crore in the same quarter of the previous year. The profit after tax (PAT) climbed 4.80 per cent to Rs.5.65 in Q2FY19 as against Rs.5.39 in Q2FY18.

On the annual front, the net sales were reported at Rs.383.47 crore in FY18 as against Rs.307.23 crore, reflecting a gain of 25 per cent. The PAT was up 2 per cent in FY18 at Rs.22.91 crore versus Rs.22.44 crore in FY17.

After our recommendation, the share price has climbed 16 per cent and we would recommend our reader-investors to BOOK PROFIT in the counter. 

(* Closing price as of Dec 31, 2018)


We had recommended Kanoria Chemicals in Volume 33, Issue No. 21, dated Sept 17– 30, 2018, under the ‘Low Priced Scrip’ segment. The stock of the company was then trading at Rs.69. We had recommended the stock looking at the capacity addition to meet the rising demand, full capacity utilisation in textile division and the company’s reviving financials. 



Kanoria Chemicals and Industries is engaged in the manufacturing of chemical intermediates in India. The company has expanded business interests in automotive and industrial electronics, textiles and renewable energy generation. The Company’s business segments include Alco Chemicals, Solar Power, Textile, Electronic Automotive and Others. Its Alco Chemicals business segment includes products, such as Pentaerythritol, Formaldehyde and Hexamine, etc.

On a standalone basis, the quarterly financials depict an increase of 49.09 per cent in the net sales, which increased to Rs.125.85 crore in Q2FY19 from Rs.84.41 crore in Q2FY18. Its PBIDT jumped by 40 per cent to Rs.7.41 crore in Q2FY19 from Rs.5.29 crore in Q2FY18. The company reported an increase of 6 per cent in net profit to Rs.5.33 crore in Q2FY19 from Rs.5.02 crore in Q2FY18. On the annual front on a standalone basis, the company reported an increase of 15 per cent net sales to Rs.338 crore in FY18 from Rs.295 crore in FY17. The PBIDT has however fallen by 30 per cent to Rs.36.49 crore in FY18 from Rs.51.22 crore in FY17. The company reported a drop in net profit in 2018 by 70 per cent. The net profit in FY18 stood at Rs.5.60 crore as against Rs.18.72 crore in FY17. Since our recommendation, the stock price has dropped by 2 per cent. However, with rapid growth in the sector, we expect the financial performance of the company to revive in the coming quarters. Thus, we urge our reader-investors to HOLD on to the stock 

(Closing price as of Jan 02, 2019)

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