DISH TV INDIA
I have 40,000 shares of Dish TV bought at Rs 32. Will it be right to hold for a one-year period?
Dish TV India is engaged in the business of direct-tohome (DTH) and teleport services. The company’s segments include DTH and teleport service and infra support services. It is also engaged in the business of broadcasting of other satellite telecommunications activities. On the financial front, on a standalone basis, the company posted net sales of Rs 9831.20 crore for the third quarter of the fiscal 2019 as against Rs 4,706.20 crore, posting a 109 per cent growth over the same quarter of FY18. The profit before depreciation and tax (PBDT) for Q3FY19 fell by 75 per cent to Rs 27.5 crore as against Rs 109.3 crore in the corresponding quarter of the previous year. The profit after tax (PAT) stood at Rs 408.4 core in Q3FY19 as against loss of 83.5 crore. On the annual front, the company posted net sales at Rs 28626 crore in FY18 as against Rs 19453 crore in FY17, thereby posting 47 per cent growth. The PBDT of the company decreased by 80 per cent and stood at Rs 644.70 crore in FY18, while in FY17 it was Rs 3238.5 crore. The profit after tax was at Rs 333.40 crore in FY18, down by 80 per cent from Rs 1626.9 crore. On the valuation front, the company is available at a P/E multiple of 16.06x. The company’s return on equity (RoE) stood at -1.88 per cent and the return on capital employed (RoCE) was 5.35 per cent. We recommend an EXIT.
I hold 600 shares of Fiberweb (India) at an average price of Rs 125 (CMP -Rs 36.25 as on 1-Feb-2019). Should I hold or sell the stock? Please advise.
Fiberweb (India) operates in the domain of manufacturing spunbond nonwoven fabrics from polypropylene and also manufactures and exports carrier bags and garbage bags. The company operates via the polymer processing segment. The manufactured product has many diverse applications like hygiene usage which covers stock for sanitary pads and baby diapers; medical usage, which includes medical made ups and bed linen; agricultural usage, which includes crop covers and ground covers and other applications such as industrial work clothing, filtration medium, head covers and disposable table wipes. Its textile applications include protective garments in hospitals; lining/interlining/backing in upholstery; curtains, garments and luggages. On a consolidated basis, the company posted a topline of Rs 35.1 crore in Q3FY19, a decline of 42.9 per cent YoY. In Q3FY18, the the sales stood at Rs 81.80 crore. The PBT of the company came in at Rs 6.13 crore in Q3FY19, posting a drop of 40.6 per cent from Rs 10.32 crore in Q3FY18. The net profit stood also stood at Rs 6.13 crore for the period as against Rs 10.32 crore in Q3FY18. On the annual front, in FY18 net sales stood at Rs 286.17 crore, up by 120 per cent from Rs 130.43 crore in FY17. The net profit for the company stood at Rs 36.31 crore, surging by 110.61 per cent from Rs 17.24 crore in FY17.We recommend our investor-readers to EXIT
PUNJAB NATIONAL BANK (PNB)
I have 1000 shares of PNB bought at Rs 125. Should I hold, exit or accumulate. Kindly guide me.
- Shyam Rathi
Punjab National Bank (PNB) is a government-owned public sector bank. The bank provides various banking services such as personal banking, digital banking, social banking, micro, small and medium enterprise (MSME) banking, corporate banking, agricultural banking, international banking or non-resident Indian (NRI) and financial services. The bank operates in four segments, namely, corporate/ wholesale banking, treasury, retail banking and other banking operations. The bank’s digital banking services include PNB corporate internet banking, PNB retail internet banking, PNB SMS banking, etc. Its personal banking services include fixed deposit schemes, cards and savings fund account. Its social banking services include financial inclusion and priority sector. Its corporate banking services include cash management services, loan against future lease rentals, lease rentals.
In Q3FY19, PNB’s net interest income (NII), which is the difference between interest income the bank earns from its lending activities and the interest paid to its depositors, stood at Rs 4289 crore. The bank reported a net profit of Rs 247 crore for the quarter ended December 2018, which was 8% higher than the corresponding quarter last year. The bank reported its first net profit in three quarters. PNB registered an improvement in asset quality as its gross non-performing assets ratio contracted to 16.33 per cent from 17.16 per cent in the previous quarter. The net NPA ratio also improved to 8.22 per cent as against 8.90 per cent in the quarter ended September 2018. The provision for Q3FY19 stood at Rs 2753 crore, down 38.4 per cent QoQ. The management said that it had completely provided for the Nirav Modi fraud. The bank has made three times the amount of recoveries in the first nine months of the financial year more than it recovered the whole of the last fiscal. The bank made provisions of Rs 2753.84 crore worth of provisions in Q3FY19 compared with Rs 4468 crore in the corresponding quarter last year. The bank’s provisions in the quarter ended September 2018 stood at Rs 4466.68 crore. The bank had a stock split in 2014 and its face value changed from Rs 10 to Rs 2. We recommend a HOLD.
I hold 45 shares of Ajanta Pharma bought at Rs 1175. After poor Q3 results, how will the stock perform in the long run?
- Gokul Ajanta
Pharma is a specialty pharmaceutical company engaged in producing, developing and marketing a range of branded and generic formulations. Its business includes branded generics in emerging markets of Africa and Asia, generics in the developed markets of United States. The branded generics business is spread over 30 emerging countries across Africa, the Middle East, South East Asia, Commonwealth of Independent States (CIS) and India. The company has a presence across a range of therapeutic segments including anti-malarial, antibiotic, anti-diabetic, gastrointestinal, cardiovascular ,cardiology, gynecology, orthopedics, pediatric, respiratory, multivitamin and general health products. Ajanta has a total of six formulations manufacturing facilities located in India and one in Mauritius. The company also owns an API manufacturing facility in Waluj, India. The company’s subsidiaries include Ajanta Pharma USA Inc and Ajanta Pharma (Mauritius). In India, five plants manufacture finished formulations, including Paithan and Dahej, which are USFDA approved and Guwahati plant which caters to domestic and emerging markets.
On a consolidated basis, the revenue from operations came in at Rs 485 crore, as against Rs 587 crore for the corresponding quarter last year, down 17 per cent. The company reported an EBITDA of Rs 107 crore in Q3FY19 as against Rs 198 crore in the corresponding quarter last year, which was 46 per cent lower. The EBITDA was 22 per cent of revenue. The net profit came in 55 per cent lower at Rs 67 crore as against Rs 147 crore. The management said that the lower figures were due to pipeline filling in the corresponding quarter.
The operational expense of two new manufacturing facilities at Dahej and Guwahati during the year also weighed on the profitability growth. As the capacity utilization of these facilities is ramped up in the coming years, the company expects to see the cost rationalization and better efficiency in tax. The company filed 8 ANDAs and expect to file more in Q4 which should pave way for healthy revenues on their approval and commercialization. We recommend a HOLD.
PHILLIPS CARBON BLACK
I have purchased 1000 shares of Philips Carbon Black Limited at Rs 260. Please suggest whether to exit or hold it.
- Jogesh Mishra
Phillips Carbon Black is engaged in the manufacture and sale of carbon black, which is used by the rubber industry. It operates in two segments: carbon black and power. The company produces and sells excess electric power generated from the low calorific value of gas, which is generated in the process of manufacture of carbon black. It also manufactures customized blacks for specialized applications and specialty blacks for non-rubber applications, such as films, pipes, automotive, fibre and ink.
On the financial front, on a standalone basis, the company posted net sales of Rs 945 crore for the third quarter of the fiscal 2019 as against Rs 612.40 crore, posting a 54 per cent growth over the same quarter of FY18. The profit before depreciation and tax (PBDT) for Q3FY19 climbed up by 84 per cent to Rs 171.97 crore as against Rs 93.7 crore in the corresponding quarter of the previous year. The profit after tax (PAT) surged substantially by 92 per cent in Q3FY19 as it stood at Rs 108 crore versus Rs 56.59 crore in Q3FY18.
On the annual front, the company posted net sales at Rs 2600.31 crore in FY18 as against Rs 2151.42 crore in FY17, thereby posting 21 per cent growth. The PBDT of the company increased 59 per cent and stood at Rs 364.34 crore in FY18, while in FY17 it was Rs 228.97 crore. The profit after tax was up by a whopping 216 per cent in FY18 to Rs 229.78, up from Rs 71.81 crore in fiscal 2017.
On the valuation front, the company is available at a P/E multiple of 7.25x. The company’s return on equity (RoE) stood at 18.39 per cent and the return on capital employed (RoCE) was 17.38 per cent. The dividend yield stood at 1.47 per cent.
Looking at the above financials and the quite attractive valuations, we would also want to add that the company is expected to give a good quarter ahead. We recommend you to HOLD at Rs 161.60 for returns over the next 2-3 years.
BLISS GVS PHARMA
I bought 500 shares of Bliss GVS Pharma at Rs 170. Please give me the suggestion to hold/exit.
Bliss GVS Pharma Limited is engaged in developing, manufacturing and marketing pharmaceutical formulations. The company offers a range of suppositories and pessaries catering to various therapeutic segments. The company’s suppositories products include anti-malarial, anti-haemorrhoidal, anti-spasmodic, laxatives, anti-inflammatory, anti-emetic and anti-pyretic.
The company’s pessaries products include anti-fungal, antibacterial, contraceptive and lubricants. The company’s pharma products include tablets, capsules, dry powder for injection, injection, syrups, eye/ear drops, nasal solution, soft gelatin capsules, lotions, sachets and transdermal patches. Its other healthcare products include lozenges, nasal inhaler, powder, shampoo, spray, balm, roll on, petroleum jelly and cream, etc.
On the standalone financial front, the company has posted topline of Rs 95 crore in Q3FY19, showcasing a jump of 29 per cent YoY. In Q3FY18, the sales stood at Rs 73.59 crore. The PBDT of the company came in at Rs 19.61 crore in Q3FY19, posting a flat growth of around 1 per cent from Rs 19.33 crore in the Q3FY18 period. The net profit stood at Rs 11.70 crore in Q3FY19, expanding by 13 per cent from Rs 10.40 crore posted in the third quarter of fiscal 2018. On the annual front, in FY18, the net sales stood at Rs 298.29 crore, down by 15 per cent from Rs 349.18 crore in FY17. The PBDT stood at Rs 92.51 crore, dropping by 11 per cent in FY18 from Rs 104.27 crore in FY17. The net profit fell by 9 per cent in FY18 and reached Rs 57.02 crore, while in FY17 the net profit was Rs 62.66 crore.
On the valuation front, the company is currently trading at a P/E of 14.09x. The return on equity (ROE) stood at 15.08 per cent and the return on capital employed (ROCE) stood at Rs 29.04 per cent. The dividend yield stood at 0.64 per cent. The company has been delivering sales growth of 26.01 per cent over a period of 3 years. We recommend a HOLD
(Closing price as of Feb 12, 2019)