Query Board
Is it the right time to buy Eveready Industries as it is a beaten down stock?
Eveready Industries is engaged in the business of marketing of FMCG, such as dry cell batteries, rechargeable batteries, flashlights, packet tea and general lighting products. The company’s product portfolio includes dry cells and rechargeable batteries under the brand names Eveready, Powercell and Uniross; flashlights and lanterns under the brand names Eveready and Powercell; packet tea under the brand names Tez, Jaago and Premium Gold; light-emitting diode (LED) bulbs and luminaires under the brand names Eveready and Powercell etc.
On the financial front, the company’s net sales stood at Rs.379.18 crore in December 2018, up 2.6 per cent from Rs.369.57 crore in December 2017. The company’s net profit stood at Rs.0.20 crore in Q3FY18 down 99.06 per cent from Rs.20.94 crore in December 2017. The EBITDA of the company stood at Rs.43.42 crore in December 2018, up 12.96 per cent from Rs.38.44 crore in December 2017. India Ratings and Research has lowered Everready’s long term issuer rating to ‘IND A+’ from ‘IND AA-‘ while placing it on ‘Rating Watch Negative( RWN)’, citing high leverage and weakened liquidity amid continuous financial support extended to group companies and delayed asset monetisation. Considering the above factors, we recommend a SELL.
Jain Irrigation Systems is an agri-business company. The company is engaged in the manufacture of plastic products, and manufacture of fruit or vegetable juices and their concentrates, squashes and powder. Its segments include agri input products, industrial products and non-conventional energy. The agri input products segment consists of micro and sprinkler irrigation systems, polyvinyl chloride (PVC) pipes, tissue culture and other agri inputs. The industrial products segment includes various business lines, such as PVC sheets, polyethylene (PE) pipes for industrial applications, fruit processing, onion and vegetable dehydration and solar/green energy. On the financial front, Jain Irrigation reported net sales of Rs.2037.69 in December 2018, up 7.84 per cent from Rs.1889.63 crore in December 2017. The company reported a net profit of Rs.82.42 crore in Q3FY19, up 22.5 per cent from Rs.67.28 crore in Q3FY18. The company’s EBITDA stood at Rs.313.87 crore in Q3FY19 up 20.54 per cent from Rs.260.38 crore in Q3FY18. The company’s EPS for the quarter increased to Rs.1.60 in December 2018 from Rs.1.3 per share in Q3FY18.The company business is dependent on the seasonal agriculture sector and the government policies which could hamper growth. Also, the promoters’ holding is low at 28.65 per cent and they have pledged 48.41 per cent of their holdings. Keeping in mind these factors, we recommend a SELL.
Escorts Ltd is a leading material handling and construction equipment manufacturer. The company manufactures and markets a diverse range of equipments like cranes, loaders, vibratory rollers and forklifts. The company today is the world’s largest pick ‘n’ carry hydraulic mobile crane manufacturer. The company’s product range includes tractors, i.e. Farmtrac, Powertrac, Escort and engines, implements and trailors, lubricants ECEL, hydraulic mobile cranes, compactors, forklifts, articulated boom cranes, railway equipment and auto components.
On the financial front, the company posted net sales of Rs.1,655.06 crore for Q3FY19, up by 37.35 per cent as compared to Rs.1,205.03 crore posted in the same quarter of the previous year. The company’s PBIDT wasRs.200.48 crore in the third quarter of FY19, showing an increase of 38.24 per cent from Rs.145.02 crore posted in the same quarter of FY18. The profit after tax was Rs.140.11 crore in Q3FY19, while in Q3FY18 it was Rs.91.97 crore, showing a growth of 52.33 per cent.
On the annual front, the company posted net sales of Rs.5,015.98 crore in FY18, expanding by 20.36 per cent from Rs.4,167.58 crore posted in FY17. The PBIDT came in at Rs.557.22 crore in FY18, while in FY17 it was Rs.323.71 crore, a growth of 72 per cent. The PAT was Rs.344.72 crore in FY18 rising by 71 per cent from Rs.201.14 crore posted in FY17.
Recently, Escorts agri machinery segment has reported sales of 11,905 tractors in March 2019 as compared to 11,790 tractors in March 2018, registering a marginal growth of 0.97 per cent.
The domestic sales for the month of March 2019 stood at 11,431 tractors, down by 1.1 per cent as against 11,557 tractors in March 2018. Exports for March 2019 stood at 474 tractors as against 233 tractors sold in March 2018, registering a two-fold jump. Thus, HOLD
Gujarat Alkalies & Chemicals Ltd is engaged in the business of manufacturing basic chemicals such as sodium cyanide, sodium ferrocyanide, chloromethanes, hydrochloric acid, caustic potash, potassium carbonate, phosphoric acid (85%) and hydrogen peroxide. The company exports its products to the US, Europe, Australia, Africa, far & Middle East countries, China and South Asian markets. On the financial front, the company posted net sales of Rs.816.26 crore in Q3FY19 as against Rs.617.61 crore, expanding by 31.16 per cent on a YoY basis. The profit before interest depreciation tax (PBIDT) came in at Rs.276.12 crore in Q3FY19, up by 54.26 per cent from Rs.179 crore posted in the same quarter of the previous year. The profit after tax (PAT) climbed by 44.62 per cent in Q3FY19 to reach Rs.162.28 crore as compared to Rs.112.21 crore posted in the same quarter of the previous year.
On the annual front, the net sales of the company in the fiscal year 2018 came in at Rs.2,513.89 crore, showing a growth of 9.18 per cent from Rs.2,302.51 crore posted in the previous fiscal. The PBIDT in FY18 was Rs.786.68 crore, representing an increase of 74.97 per cent from Rs.449 crore in FY17. The company posted a 73.65 per cent rise in its bottomline reaching Rs.535.02 crore in FY18 as compared to Rs.308.10 crore posted in the previous fiscal.
On the valuation front, the company is currently trading at a P/E of 4.80 as against the industry P/E of 23.69x. The return on equity (ROE) stood at 14.9 per cent and the return on capital employed (RoCE) stood at 19.56 per cent.
We recommend a HOLD to our investor-readers as we believe that the stock could show some significant movement on the bourses post the fourth quarter earnings season.
Tata Motors Ltd is India’s largest automobile company. It is the leader in commercial vehicles in each segment, and among the top three in passenger vehicles with winning products in the compact, midsize car and utility vehicle segments. The company is the world’s fourth largest truck manufacturer and the world’s second largest bus manufacturer. The product range of the company includes passenger cars: Indica Vista, Indica V2, Indica V2 Turbo, Indica V2 Xeta, Indica V2 Dicor, Indigo XL, Indigo, Indigo Marina Indigo CS, Nano, Fiat cars, utility vehicles: Safari Dicor, Sumo Grande, Sumo.Xenon XT, trucks, including medium & heavy commercial vehicles: Tata Novus, intermediate comm. vehicles, light commercial vehicles: TL 4×4 and small commercial vehicles, commercial passenger carriers: buses: Winger, Magic and defence vehicles.
On the financial front on a consolidated basis, the net sales grew 5.80 per cent to reach Rs.76,264.69 crore in Q3FY19 as against Rs.65,612.55 crore in the same quarter of the previous year. The profit before interest depreciation and tax (PBIDT) witnessed a fall of 22 per cent to Rs.6040.64 in Q3FY19 as compared to Rs.7753.38 crore posted in the corresponding period of the previous year. The company posted a net loss of Rs.26,823.22 crore in the latest quarter ending December, 2018 as against a net profit of Rs.961.42 crore reported in Q3FY18.
On the annual front, the net sales in FY18 came in at Rs.2,95,409.34 crore, a growth of 7.62 per cent as compared to Rs.2,74,492.12 crore reported in FY17. The PBIDT in FY18 stood at Rs.33,341.10 crore, gaining 12.68 per cent from Rs.29,588.69 crore in FY17. The company posted a net profit in FY18 of Rs.6,813 crore as against Rs.6,063.56 crore in FY17, an increase of 12.36 per cent. The financials of the company is moving in the downward direction. Also, the auto industry is lacking momentum and the sales are down as per the latest reports for the month of April. We, therefore, recommend our reader-investors to EXIT the stock keeping in mind the above mentioned factors.
Jet Airways is a scheduled airline with domestic and international operations. The company operates in two business segments: air transportation and leasing of aircrafts. The geographic segment consists of domestic and international air transportation.The company operates flights to approximately 66 destinations, including India and overseas. Its airports and lounges include airport information, lounges, bus services and coach services. Its immigration and visas include fast-track immigration, passport and visas, secure flight passenger data and electronic system for travel authorisation. The company operates flights to the international destinations in South East Asia, South Asia, the Middle East, Europe and North America.
On the financial front, the company posted net sales of Rs.6147.98 crore in Q3FY19, higher by 1.02 per cent from Rs.6,086.2 crore posted in Q3FY18. The company witnessed an operating loss of Rs.270.89 crore in Q3FY19 as against a cash profit of Rs.422.62 crore. The company reported a net loss of Rs.587.77 crore in the third quarter of the financial year 2018. However, the company had posted a net profit of Rs.165.52 crore in Q3FY18.
On the annual front, the company reported net sales of Rs.24,510.69 crore for FY18, posting an increase of 8 per cent from Rs.22,692.58 crore posted in FY17. The PBIDT came in at Rs.78.36 crore in FY18 as compared to Rs.1,493.02 crore in FY17, representing a drastic fall of 94.75 per cent. The company faced a net loss of Rs.724.94 crore in FY18 as compared to a net profit of Rs.1,445.47 crore in FY17.
Recently, the airline informed that all its domestic and international flights have been cancelled for lack of funds to pay for fuel and other critical services. As no emergency funding was available from any source, the airline shut down its operations flying its last flight on April 17, 2019. Based on the above facts, we recommend an EXIT.