QueryBoard
DHANUKA AGRITECH
I have some shares of Dhanuka Agritech bought at Rs417. Should I hold now or sell?
- Mohit
Dhanuka Agritech is engaged in the marketing and formulation of plant protection agro-chemicals, which include insecticides, herbicides, plant growth regulators and fungicides. The company’s portfolio has over 80 products. The company has a pan-India presence through its marketing offices in all major states in India, with a network of 7500 distributors and dealers selling to more than 70,000 retailers across India. The specialty molecules comprise of over half of the company’s revenues and the remaining comprises of generics. On the financial front, the company reported net sales of Rs216.79 crore for Q3FY19 as against Rs221.51 crore for the corresponding quarter last year.
The company reported a net profit of Rs14.60 crore in Q3FY19 down 49 per cent as against Rs28.59 crore in the corresponding quarter last year. The company reported a PBT of Rs22.14 crore in the quarter ended December 2018 as against Rs36.05 crore in the corresponding quarter last year. On the annual front, net sales for the company stood at Rs952.42 crore, up by 29.24 per cent in FY18 as against Rs736.93 crore in FY17.The net profit for the company came in at Rs126.18 crore in FY18 as against Rs93.14 crore in FY17.We recommend our reader-investors to EXIT over the next six months.
DWARIKESH SUGAR
I own 150 shares of Dwarikesh Sugar. Should I hold for the long term or should I exit ?
- Viraj
Dwarikesh Sugar is a market leader in the Indian sugar industry. It is a multi-faceted, diversified industrial group engaged in the manufacture of sugar and allied products. The company operates in three segments, namely, sugar, co-generation and distillery. The company’s sugar manufacturing units have a combined production capacity of 21500 tonnes of sugarcane per day. The company’s 30 kilolitres per day distillery uses molasses to produce industrial alcohol. The distillery is equipped to produce rectified spirit and alcohol. The company’s 90 MW power plants at its manufacturing units produce approximately 90 MW power using bagasse.
On the financial front, the company reported net sales of Rs231.98 crore for the quarter ended December 2018 as against Rs272.80 crore, registering a de-growth of 15 per cent YoY. The company’s PAT came in at Rs23.93 crore for the quarter ended December 2018 as against Rs21.30 crore in the corresponding quarter last year. The company’s PBT stood at Rs31.56 crore as against Rs22.12 crore in Q3FY18. On the annual front, the FY18 net sales came in at Rs1458.28 crore as against Rs1256.1 crore in FY19, registering a growth of 16 per cent YoY. The net profit for the company stood at Rs101.45 crore, down 35 per cent as against Rs156.1 crore in FY 17.We recommend a HOLD for short-term gains.
KEI INDUSTRIES
Is it a good time to enter KEI Industries? What would you recommend?
- Sunil
KEI Industries Limited is engaged in the manufacture and supply of power and other industrial cables. The company’s business segments include cables, which consists of extra high voltage (EHV), high tension (HT) and low tension (LT) power cables, control and instrumentation cables, winding wires, and flexible and house wires; stainless steel wire, which consists of stainless steel wires, and turnkey projects. Its product portfolio includes specialty cables, rubber cables, submersible cables and polyvinyl chloride (PVC)/poly-wrapped winding wires. Its products are used in power, oil refineries, railways, automobiles, cement, steel, fertilizers, textiles and real estate sectors.
On a standalone financial basis, the net sales stood at Rs1,087.49 crore in Q3FY19, an increase of 22.37 per cent as compared to Rs888.66 crore in the same quarter of the previous year. The PBIDT has gone up almost 40 per cent as it reached Rs117.68 crore in Q3FY19 versus Rs84.30 crore in Q3FY18. The net profit has risen by 24 per cent to Rs48.40 crore as against Rs39.02 crore in the same quarter of the previous fiscal.
On the annual front, the company’s net sales in FY18 were at Rs3,458.80 crore, increasing by 32 per cent from Rs2,628.46 crore in FY17. The PBIDT in FY18 came in at Rs347.69 crore as compared to Rs279.08 crore in FY17, thereby showing an increase of 25 per cent. The PAT has jumped by 54 per cent in FY18 to Rs144.56 crore versus Rs98.83 in FY17.On the valuation front, the company is currently trading at a PE of 14.23x on its TTM earnings. The P/BV stood at 3.39x. The return on equity (ROE) stood at 27.46 per cent while the return on capital employed (ROCE) stood at 23.19 per cent.
We recommend our reader-investors to buy the stock of the company as it seems like a profitable time to enter looking at the consistent growth in the financials and the latest quarterly earnings. We recommend a BUY on the stock as we expect it will do well in the future.
RELIANCE POWER
I have some shares of Reliance Power bought at Rs70. Should I hold? Will it be worthy in the future? What is the future of power sector?
- Bala Subramanium
Reliance Power Limited is engaged in the business of generation of power. The company operates through two segments: power generation and associated business activities. The associated business activities segment includes project management, supervision and support services for generation and allied processes. The company’s projects under development include coal, gas, hydro, wind and solar-based energy projects. It develops, constructs and operates power projects, both in India as well as internationally. The company on its own and through its subsidiaries has a portfolio of power generation capacity, both in operation, as well as capacity under development. It has approximately 6,000 megawatts (MW) of operational power generation assets.
On the consolidated financial front, the company has secured net sales of Rs2,100 crore in Q3FY19 quarter, witnessing a drop of 15.81 per cent on a YoY basis from Rs2494.65 crore. The company’s PBIDT was reported at Rs1126.38 crore in Q3FY19 as against Rs1195 crore in the same quarter of the previous year, thus portraying a slight slip of 5.81 per cent. The company posted net profit of Rs188.27 crore in Q3FY19 as against a net loss of Rs25.26 crore in the third quarter of FY18.
On the annual front, the net sales in FY18 came in at Rs9,839 crore, a decline of 5 per cent from Rs10,395 crore in FY17. The PBIDT for FY18 stood at Rs4,916.13 crore as compared to Rs5,002.5 crore in FY17. The net profit for FY18 came in at Rs1,034.81 crore versus Rs1,104.16 crore in FY17. The company thus seen a drop of 6 per cent in net profit in FY18.On the valuation front, the company is currently trading at a PE of 3.42x on its TTM earnings as against the industry PE of 10.90x. The return on equity (RoE) stood at 4.71 per cent and the return on capital employed (RoCE) was 7.67 per cent. Looking at the deteriorating financial performance, we would suggest to our reader-investors to EXIT slowly over a three-month period as the company seems to be portraying a downward trend on the bourses.
EDELWEISS FINANCIAL SERVICES
I am holding 150 shares of Edelweiss Fnancial Services bought at Rs220. Kindly advice on this stock
- Siva
Edelweiss Financial Services Ltd is a diversified financial services company in India providing services such as investment banking, institutional equities, private client broking, asset management and investment advisory services, wealth management, insurance broking and wholesale financing services to corporate, institutional and high networth individual clients. The company’s business line can be broadly classified as investment banking, wherein the company provides full range of services and transaction expertise, including private placements of equity, capital raising services in public markets, mezzanine and convertible debt, mergers and acquisition and restructuring advisory services. The company offers its services to clients who are leading domestic and international institutional investors, including pension funds, hedge funds, mutual funds, insurance companies .
On the financial front on a consolidated basis, the net sales of the company jumped 27.35 per cent YoY and stood at Rs2,751.72 crore in Q3FY19 as against Rs2,160 crore in the same quarter of the previous year. The profit before interest, depreciation and tax (PBIDT) of the company has also risen by 25 per cent and stood at Rs1688.44 crore in Q3FY19 as against Rs1,344.93 crore in the same quarter of the previous year. In terms of profit after tax (PAT), the company witnessed a rise of 18 per cent posting PAT of Rs258.16 crore in Q3FY19 while in Q2FY18 it was Rs218.64 crore.
On the annual front, the company posted net sales of Rs10,586 crore in FY18, a decline of 22 per cent from Rs3879.80 crore in FY17. The PBIDT of the company grew 30 per cent to Rs5059.43 crore in FY18 as against Rs3859.34 crore in the previous fiscal. The PAT stood at Rs858.38 crore in FY18, while in FY17 it was 548.48 crore, posting a jump of 57 per cent.
We would advise our reader-investors to HOLD to get returns over the next two years or EXIT at Rs180 and book partial loss.
TRENT
I had bought certain shares of Trent at Rs357. Please suggest what should I do now.
- Rajkumar
Trent Limited is engaged in the business of retailing of consumer products. The company’s segments include retailing and others. It primarily operates stores across three formats: Westside, Star and Landmark. Westside offers apparel, footwear and accessories for men, women and children, along with furnishings, decor and a range of home accessories. It offers products in approximately 60 cities across over 90 stores. Star hypermarket and convenience store chain offers a range of products, including staple foods, beverages, health and beauty products, apparel, home furnishings, vegetables, fruits, dairy and non-vegetarian products. The Star brand operates through approximately 30 stores under Star Daily, Star Market & Star Hyper banners. Landmark is a family entertainment format that offers a range of toys, front-list books and sports merchandize. Westside offers in-house fashion brands.
On the financial front, on a standalone basis, the net sales stood at Rs656.47 crore in Q3FY19 as compared to Rs521.32 crore in the same period of the previous quarter, an increase of 25.92 per cent. The PBIDT has increased marginally by 5 per cent in Q3FY19 to reach Rs72.59 crore as against Rs68.61 crore in Q3FY18. The PAT was Rs40.28 crore, an increase of 6 per cent in Q3FY19 over Rs37.89 crore in Q3FY18.
On the annual front, the net sales rose by 23 per cent to reach Rs2,247.27 crore in FY18, while in FY17 it had clocked sales of Rs1,825.84 crore in FY17. The PBIDT was Rs256.51 crore in FY18, moving up by 33 per cent from Rs192.81 crore in FY17. The net profit for FY18 was Rs116.73 crore as against Rs106.87 crore in FY17. The company thus witnessed a 9 per cent growth on its net profit.
The company has posted good financial numbers and valuations. We would recommend a HOLD on the company to reap benefits in the near future.