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R.S. SOFTWARE (INDIA)



R.S. Software (India) Limited is an electronic payment services company. The company’s business operations include development, testing and maintenance of software. It focuses on providing software solutions to electronic payment industries, computer software, automating merchant management, onboarding and underwriting for merchant acquiring, merchant data management, reference data management and modelling platform, etc. The company offers definition and deployment of sandbox strategy; development and deployment of application programming interfaces,etc. On the financial front, the company has reported an increase of 51.70 per cent in net sales to Rs. 20.95 crore for Q4FY19 as compared to net sales of Rs. 13.81 crore for Q4FY18. For Q4FY19 the company’s operating loss was Rs. 5.07 crore and for Q4FY18 it was Rs. 8.04 crore. Also, in Q4FY19, the company incurred net loss of Rs. 5.06 crore, which is less than the net loss of Rs. 5.96 crore posted in Q4Fy18. On the annual front, the net sales increased by 6.36 per cent to Rs. 61.04 crore for FY19 from Rs. 57.39 crore for FY18. The company posted an operating loss of Rs. 27.59 crore for FY19 and operating loss of Rs. 34.90 crore for FY18. In FY19, the company incurred a net loss of Rs. 23.88 core, which is less than the net loss incurred of Rs. 25.73 crore in FY18. Hence, we recommend an EXIT.

UJAAS ENERGY LIMITED



Ujaas Energy Limited was previously known as M&B Switchgears Limited. The company’s main business segments include manufacturing and servicing of transformers, generation and distribution of solar power units, operation and maintenance of solar power plants and manufacturing and sales services of solar power systems. On the financial front, the company has reported a decrease of 25.19 per cent in net sales to Rs. 49.92 crore for Q4FY19 as compared to net sales of Rs. 66.73 crore for Q4FY18. For Q4FY19 the company’s PBDT stood at Rs. 2.47 crore, which is a decrease by 9.19 per cent compared to the PBDT posted at Rs. 2.72 crore for Q4FY18. Also, in Q4FY19, the company’s net profit decreased by 32.35 per cent to Rs. 0.69 crore from Rs. 1.02 crore in Q4FY18. On the annual front, the net sales decreased by 56.77 per cent to Rs. 144.45 for FY19 crore from Rs. 334.17 crore for FY18. PBDT decreased by 64.60 per cent to Rs. 9.46 crore for FY19 from Rs. 26.73 crore for FY18. In FY19, the net profit decreased substantially by 61.14 per cent to Rs. 6.61 crore from Rs. 17.01 crore recorded in FY18. The company has had weak order inflow and delay in realisation of receivables, reduced liquid funds, increasing dependence on short-term funds. Credit rating agency CRISIL has downgraded the company’s short-term and long-term rating. Hence, we recommend a SELL to our investor-readers.

BHARAT HEAVY ELECTRICALS LIMITED



Bharat Heavy Electricals Limited (BHEL) is Government of India founded and owned company headquartered in New Delhi. It is considered to be one of the largest power generation equipment manufacturer in India. The company manufactures integrated power plant equipments which include designing, engineering, construction, testing, commissioning and servicing a range of products in sectors such as power, transmission, industry, transportation, oil and gas, renewable energy and defence. As part of its operations in the power industry, the company supplies steam turbines, generators, boilers, hydro turbines and nuclear turbine generator sets. It also provides services for power utilities, oil and gas, metallurgical and mining, cement and sugar industries, etc.

Looking at the quarterly trends, for the fourth quarter of FY19, the company reported net sales of Rs. 10,297.16 crore, an increase of 1.51 per cent as against the net sales of Rs. 10,143.66 crore for the same quarter of the previous fiscal. PBDT also increased by 4.62 per cent for the fourth quarter of FY19 and was Rs. 1,419.66 crore as compared to Rs. 1,356.94 crore for the fourth quarter of FY18. For the fourth quarter of FY19, the net profit increased by 49.33 per cent to Rs. 682.70 crore when compared to Rs. 457.17 crore in the fourth quarter of the previous fiscal.

On the annual front, in FY19, the company reported net sales of Rs. 30,348.95 crore, an increase of 4.43 per cent over the net sales of Rs. 29,060.98 crore reported in the previous fiscal. For FY19, the PBDT stood at Rs. 2,532.67 crore as against Rs. 2,371.39 crore for FY18. In FY19, the net profit significantly increased by 50.68 per cent to Rs. 1,215.39 crore from Rs. 806.60 crore posted in the previous fiscal. BHEL has received orders from Maharashtra State Power Generation Company (MAHAGENCO), GSECL and GNFC cumulatively valued at Rs. 520 crore. The company has a market cap of Rs. 23,190.54 crore. Thus, based on our analysis, we would recommend our investor-readers to HOLD.

RELIANCE HOME FINANCE LIMITED



Reliance Home Finance Limited (RHFL) is housing finance company. It is a 100 per cent subsidiary of Reliance Capital and, as part of business operations, provides home loans, construction finance, affordable housing loans and loan against property (LAP) or home equity loans. The company is able to maintain its presence with around 90 business locations situated across the country. It also provides property solutions services. RHFL’s subsidiaries include Reliance Nippon Life Asset Management Limited, Reliance Asset Management (Singapore) Pte. Limited, Reliance Capital Pension Fund Limited, Reliance Capital Trustee Co. Limited, Reliance Exchangenext Limited, Reliance Securities Limited, Reliance Commodities Limited, Reliance Financial Limited, Reliance Money Express Limited, Reliance Money Solutions Private Limited, Quant Broking Private Limited and Quant Securities Private Limited. RHFL’s market cap is Rs. 596.02 crore.The company’s equity shares were successfully listed on BSE and NSE with effect from September 22, 2017.

On the financial front, the net sales for the third quarter of FY19 came in at Rs. 514 crore, which is an increase of 27.54 per cent as compared to the net sales of Rs. 403 crore for the third quarter of FY18. The PBDT for the third quarter of FY19 was reported at Rs. 88 crore, an increase of 14.28 per cent as against Rs. 77 crore reported for the same quarter of the previous fiscal. There was an increase in the net profit by 19.57 per cent for the third quarter of FY19 to Rs. 55 crore when compared to Rs. 46 crore for the third quarter of the previous fiscal.

Looking at the annual trend, the company reported net sales of Rs. 1,603 crore for FY18. For FY18 PBDT stood at Rs. 298 crore. In FY18, the company’s net profit was Rs. 181 crore. In the recent turn of events for the company, PwC had resigned as its auditors stating that RHFL did not give satisfactory responses to their queries. Also credit rating agency CARE assigned a ‘D’ or default rating for the company’s Rs. 400-crore worth of non-convertible debentures (NCDs) recently. Therefore, we recommend a SELL.

ADITYA BIRLA CAPITAL LIMITED (ABCL)



Aditya Birla Capital Limited (ABCL) was formerly known as Aditya Birla Financial Services Limited. Through its subsidiaries, the company provides financing, investment, protection and advisory services to its customers and clients. As part of financing operations, ABCL provides services such as lending, financing and wealth management solutions, customised solutions in areas of personal and business loans, corporate finance, mortgages, capital market based lending, housing finance solutions such as home loans, home improvement and construction loans. As part of investment operations, the company provides services such as asset management, investment solutions, portfolio management investment advisory and securities broking. ABCL’s protection services include protection solutions, children’s future solutions, wealth with protection solutions, health and wellness solutions and, lastly, health insurance. Its advisory services include insurance broking and risk advisory solutions to companies and individuals.

On the financial front, the net sales for the fourth quarter of FY19 came in at Rs. 78.90 crore which is an increase of over 500 per cent as compared to net sales of Rs. 12.37 crore for the fourth quarter of FY18. For Q4 of FY19, the PBDT stood at Rs. 6.73 crore and for the same quarter of the previous fiscal, the company posted an operating loss of Rs. 18.40 crore. In Q4 of FY19, the company posted net profit of Rs. 6.52 crore as against a net loss of Rs. 18.55 crore in Q4 of the previous fiscal.

Looking at the annual trend, the net sales were reported at Rs. 177.78 crore for FY19, thus increasing by 1.71 per cent when compared to net sales of Rs. 174.79 crore for FY18. In FY19, the company posted an operating loss of Rs. 10.77 crore as against a PBDT of Rs. 61.98 crore for FY18. For FY19, the company incurred a loss of Rs. 9.60 crore, whereas the company had reported a net profit of Rs. 61.49 crore for FY18. Despite liquidity headwinds across the industry, ABCL raised about Rs. 11,000 crore of long-term funds in the second half of FY19. Based on our analysis, we recommend a HOLD to our investor-readers.

SRF LIMITED



SRF Limited is a Gurgaon headquartered holding company engaged in manufacturing of chemicals and polymers, technical textiles and packaging films. The company’s business segments include technical textiles business (TTB) that includes nylon tire cord fabric, belting fabric, coated fabric, polyester tire cord fabric and industrial yarns. The company’s research and development focuses on chemicals and polymers business (CPB) that includes refrigerant gases, pharmaceuticals and allied products, engineering plastics business and its research and development and also packaging films business (PFB) including polyester films. SRF’s chemicals and polymers plants are located in Alwar, Rajasthan, Uttarakhand and in Bharuch, Gujarat. Its technical textiles plants are located in Chennai in Tamil Nadu, Bhind in Madhya Pradesh, Thiruvallur and Pudukottai in Tamil Nadu and in Uttarakhand. The company’s packaging films plants are located in Uttarakhand and in Indore, Madhya Pradesh.

Looking at the quarterly trends, for Q4 of FY19, the company reported net sales of Rs. 1,789.42 crore, an increase of 31.44 per cent as against the net sales of Rs. 1,361.37 crore for the same quarter of the previous fiscal. PBDT also increased by 43.77 per cent for Q4 of FY19 and was Rs. 314.99 crore as compared to Rs. 219.09 crore for Q4 of FY18. For the Q4 of FY19, the net profit increased by 56.15 per cent to Rs. 165.30 crore when compared to Rs. 105.86 crore recorded for Q4 of the previous financial year.

On the annual front, net sales for FY19 were Rs. 6,459.34 crore, which is an increase by 38.08 per cent when compared to Rs. 4,677.93 crore for FY18. For FY19, the PBDT increased by 29.14 per cent to be Rs. 1,021.15 crore compared to Rs. 790.75 crore for FY18. The net profit for FY19 was reported at Rs. 517.18 crore, an increase of 27.49 per cent when compared to net profit of Rs. 405.66 crore for the previous financial year. Therefore, we recommend a HOLD to the investor-readers of our magazine.

(Closing price as of July 16, 2019)

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