Reviews

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




ITD Cementation India Limited is an India-based company engaged in construction of a wide variety of structures like maritime structures, mass rapid transport systems (MRTS), dams and tunnels, airports, highways, bridges and flyovers and other foundations and specialist engineering work. The company’s activity consists of construction. The company’s subsidiary includes ITD Cementation Projects India Ltd.

On the consolidated financial front, the company posted net sales of Rs.589.95 crore in Q4FY19 as against Rs.654.73 crore, posting a marginal drop of 9.89 per cent from Q3FY18. The company incurred an operating loss of Rs.0.35 crore in Q4Fy19, as compared to an operating profit of Rs.61.149 crore in Q4FY18. The net loss in Q4FY19 stood at Rs.36.55 crore as compared to the net profit of Rs.27.45 crore posted in Q4FY18.

On the annual front, the company’s net sales increased by 24.96 per cent to Rs.2283.46 crore in FY19 as compared to Rs.60.101,827.34 crore in FY18. The PBIDT dropped 3.91 per cent in FY19 to reach Rs.295.15 crore as against Rs.269.69 crore posted in FY18. The PAT fell by 30 per cent to Rs.81.87 crore in FY19 as compared to Rs.117.15 crore posted in FY18.

On the valuations front, the company is currently trading at a P/E multiple of 33.82x on its TTM earnings while the industry P/E is 24.16. Its peer companies like Power Mech Projects and MEP Infrastructure are trading at a TTM PE of 15.27x and 33.82x respectively.The ROCE for ITDcementation stood at 20.44 per cent and the ROE was at 8.02 per cent.

Since our recommendation, the price of the stock has fallen by 13.32 per cent. However, we expect the company to deliver on the bourses in the near future and thus recommend a HOLD. 





Trident Ltd’s operations are segregated into four main segments, viz. yarns, terry towels, paper and chemicals. The yarn segment product offering of the company includes 100% cotton yarn (grey/dyed/ mercerized), single & TFO doubled, hosiery & weaving (combed & carded),etc. The terry towels segment product offerings include piece-dyed dobbies, yarn-dyed single and double jacquards,Uni-dyed jacquards,etc. Paper segment product offerings consist of spectra copier - ultra-finish, high-speed copier paper, Goldline surface size maplitho, etc. The chemicals segment product offerings include battery grade sulphuric acid & commercial grade is also manufactured. The company is also in the business of textiles, paper and chemicals.

On the standalone financial front, the net sales of the company has grown by 18.54 per cent to Rs.1405.42 crore in Q4FY19 versus Rs.7021185.56 crore in the same quarter of the previous year. The PBIDT of the company stood at Rs.258.91 crore in Q4FY19 and witnessed a rise of 22.41 per cent YoY from Rs.51.41 crore. The net profit has substantially grown by 80.06 per cent YoY to Rs.92.57 crore in Q4FY19 versus Rs.51.41 crore posted in same quarter of the previous year.

In annual terms, the net sales have increased by 14.01 per cent to Rs.5,219.52 crore in FY19 as against Rs.4,578.30 crore in FY18. The PBIDT of the company in FY19 was 983.43, showing a growth of 15.43 per cent from Rs.851.99 crore in FY18. The company has witnessed a 39.52 per cent increase in PAT to Rs.370.92 crore in FY19 as against Rs.265.86 crore in the previous fiscal. The share has risen by 1.14 per cent since our recommendation, however we recommend a HOLD looking at the positive financials. 

(Closing price as of July 02, 2019)