Reviews

In this edition, we have reviewed CCL Products (India) Ltd and Indian Hotels Co. Ltd . 

We had recommended CCL Products (India) Ltd in volume 33, issue no. 8, dated Mar 18-31, 2019, under the Choice Scrip segment. The stock was trading at Rs299.45 then and was recommended owing to steady and resilient margins, robust business model and sustainable growth prospects. 

CCL Products (India) Ltd is engaged in the manufacture of soluble instant spray dried coffee powder, spray dried agglomerated/granulated coffee, freeze dried coffee, as well as freeze concentrated liquid coffee. The company’s product range includes pure soluble coffee, decaffeinated coffee, flavoured coffee, certified coffees and chicory-coffee mix. The company also in the business activities of instant coffee. 

On the consolidated financial front, the net sales for Q1FY20 was reported at Rs273.17 crore, down by 7.22 per cent from Rs294.44 crore reported in Q1FY20. 

The PBIDT was Rs69.403 crore in Q1FY20, up from Rs63.63 crore in the same quarter of the previous year, thus showing an increase of 8.96 per cent YoY. The PAT in Q1FY20 has fallen by 12.14 per cent to Rs34.67 crore as compared to Rs39.46 crore in the same quarter of the previous year. 

On the annual front, the net sales have fallen by 4.09 per cent to Rs1,081.92 crore in FY19 as against Rs1,138 crore in FY18. 

The PBIDT in FY19 was Rs245.49 crore, marginally up by 2 per cent from Rs238.89 crore posted in FY18. The PAT was Rs155.89 in FY19 as compared to Rs148.13 crore reported in FY18, a growth of 4.56 per cent over a year. 

Since our recommendation, the stock has fallen by around 17.39 per cent. However, we recommend a HOLD as we believe the stock would gain significant traction on the bourses in the coming quarters. 

We had recommended Indian Hotels in volume 33, issue no. 9, dated April 1-14, 2019, under the Choice Scrip. The stock was trading at Rs150.95 then and was recommended owing to healthy margin improvement, reduction in debt and prudent management. 

Indian Hotels Company Ltd opened its first hotel Taj Mahal Palace & Tower in Mumbai. In India, the Taj is recognised for its premier hospitality, excellence in dining, business facilities, interiors and world-class personalised service. In cuisine, Taj was the first to introduce Sichuan, Thai, Italian, Mexican, and Californian cuisine in the country. IHCL has also created hotel chains under different brands such as Taj Hotels, Taj Safari, Taj Exotica, The Gateway Hotel and Ginger. The company also owns three personal jets under the name Taj Air. 

On the consolidated financial front, the revenues were at Rs1020 crore in Q1FY20, up by 4 per cent from Rs979.7 crore in Q1FY19. The PBIDT in Q1FY20 came in at Rs173.44 crore, up by over 56.73 per cent from Rs110.66 crore in Q1FY19. The PAT too climbed 65 per cent to Rs10.12 crore in Q1FY20 versus Rs6.1 crore in the same quarter of the previous year. 

On the annual front, in FY19, the net sales were up by 7.60 per cent to Rs2,780 crore as against Rs2,583 crore reported in FY18. 

The PAT in FY19 was up by 78 per cent to Rs263.70 crore as compared to Rs147.77 crore in FY18. Since our recommendation, the stock has fallen by 7.22 per cent. We request our reader-investors to HOLD as we believe that post the earnings season, the stock could gain some momentum on the bourses.