Reviews

In this edition, we have reviewed BCL Industries and ITD Cementation. We suggest our reader-investors to HOLD in both BCL Industries and ITD Cementation 

We had recommended BCL Industries in Vol 33, issue no. 24, in the Cover Story when the stock was trading at Rs 110.25. It was recommended because of its attractive valuations and the excellent quarterly results. Founded in 1976, BCL Industries & Infrastructure Ltd has grown to become an integrated Industry player with businesses in key Industry verticals – vegetable oil refining (physical and chemical), solvent extraction, oil extraction, Distillery-Ethanol Industry, real estate and rice sheller. 

BCL Industries Limited is engaged in the business of edible oils, distilleries and real estate. Its segments include oil and vanaspati, distillery unit and real estate. Its edible oil business consists of oil, solvent extraction unit, vanaspati ghee, refined vegetable oil under the brands of Homecook, Do Khajoor and Murli. 

On the financial front, on a standalone basis, the net sales of the company have fallen by 6 per cent in Q2FY19 and stood at Rs 202.4 crore as against Rs 215.36 crore in the same quarter of the previous year. The profit before, depreciation and tax (PBDT) of the company came in at Rs 22.90 crore in Q2FY19 as against Rs 8.36 crore in Q2FY18, posting substantial growth of over 100 per cent. The profit after tax (PAT) in Q2FY19 was Rs 17.21 crore, posting a jump of over 200 per cent from 4.36 crore in Q2FY18. 

On the annual front, the company posted net sales of Rs 850.79 crore in FY18 as against Rs 671.28 crore in FY17, a jump of 27 per cent. The PBDT of the company came in at Rs 32 crore, expanding by 63 per cent in FY18. The net profit of the company also surged by 84 per cent in FY18 and stood at Rs 18.4 crore as against Rs 10.02 crore in FY17. 

Since our recommendation, the stock price of BCL has fallen by 9.75 per cent, but looking at the company’s robust earnings, we recommend a HOLD. 

We had recommended ITD Cementation in Volume 33, Issue No 22, dated Oct 1 – 14, 2018 in our ‘Choice Scrip’ section, when the stock was trading at Rs 125. We recommended the company as it reflected promising order book, diversified business model and good growth prospects in the infrastructure sector. This Company established its operations in India in 1931 as a branch of The Cementation Company Ltd,UK, a member of Trafalgar House Group of London, for carrying out extensive grouting and drilling works to the hydraulic structures which were then growing at rapid pace. 

ITD Cementation India is involved in construction and civil engineering. The company is involved in construction of a range of structures, which include maritime structures, mass rapid transport systems (MRTS), airports and other foundations. The company operates in the construction segment. The company has approximately 60 live operational project sites across over 10 Indian states. 

On the financial front, the company posted net sales of Rs 414.83 crore in Q2FY19, showing minimal growth from Rs 413.72 crore. The company posted PBDT of Rs 56.25 crore, up by 31 per cent in Q2FY19 from Rs 43.06 crore in Q2FY18. The net profit also surged by 43 per cent YoY in Q2FY19 as it stood at Rs 27.27 crore as against Rs 19.13 crore. On the annual front, net sales dropped by 35 per cent to Rs 1872.92 crore in FY18. However, the PBDT and net profit jumped 42 per cent and 51 per cent, respectively, in FY18. Since our recommendation, the stock has fallen by around 6 per cent. However, we suggest our investor-readers to HOLD the stock as we expect the company to deliver better performance on the bourses as and when the market moves into a better horizon 

(Closing price as of Jan 29, 2019)