Your stock queries

EVERONN EDUCATION

Q: I have purchased 250 shares of Everonn Education at Rs 275 per share. Please advise me as to what I should do with these now.

- Kaushal Rupani, Kolkata, West Bengal

A: Everonn Education, BSE/NSE Code 532876/EVERONN, with a face value of Rs 10, is currently trading at Rs 212. Its 52-week high/low stand at Rs 579 and Rs 212 respectively. The stock is currently trading at a 22 per cent discount to your acquisition cost.

Everonn engages in providing education and training services in India. The company offers instructional computing technology-enabled education in government schools through turnkey projects on a build-own-operate-transfer (BOOT) model, which provides computer education, computer literacy, computer-aided learning and teachers’ training projects. It also offers a host of educational and training solutions through satellite-based VSAT technology. Further, it operates classontheweb.com, a curriculum-based eLearning portal that offers a digital repository. This portal offers content for mathematics, physics, chemistry, biology, social sciences, English grammar, business studies, economics and accountancy to cater to all the academic needs of students.

On the financial front, the company’s results for 9MFY12 have not been particularly impressive. The topline witnessed a decline of 4.85 per cent on a YoY basis, standing at Rs 269.85 crore as against Rs 283.61 crore for 9MFY11. It reported a loss of Rs 4.85 crore for 9MFY12 as against a profit of Rs 38.07 crore for 9MFY11. On the valuations front, the stock discounts its trailing 12-month earnings by 20.93x and the EV/EBITDA stands at 3.42x. At present, we suggest that you exit the stock even if you have to book losses.

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TTK PRESTIGE

Q: The shares of TTK Prestige have witnessed a selloff in the last couple of trading sessions. Should I continue to hold them in my portfolio?

- T K Sharma, Bhagalpur, Bihar

A: The stock of TTK Prestige, BSE/NSE Code 517506/TTKPRESTIG, with a face value of Rs 10, is currently trading at Rs 3148. Its 52-week high/low stand at Rs 3659 and Rs 2161 respectively. The company engages in the design, manufacture and distribution of kitchen appliances in India. It offers microwave pressure cookers, inner-lid pressure cookers, induction cook tops, induction compatible pressure cookers and cookware and non-stick cookware, to name a few of its products. TTK Prestige exports its products primarily to the United States, Europe, South Africa, Kenya and Australia. The company is also involved in the property and investments business.

On the financial front, its results for FY12 have been quite encouraging. The topline witnessed a growth of 44.51 per cent on a YoY basis, and stood at Rs 1103 crore as against Rs 763 crore for FY11. The bottomline witnessed a growth of 35.36 per cent YoY, and stood at Rs 113 crore as against Rs 83.75 crore for FY11. On the valuations front, the company discounts its trailing 12-month earnings by 31.32x and the EV/EBITDA stands at 27x. According to the management guidance, it is expected to grow by 25 per cent in FY13, above the industry growth rate that is in the range of 15-17 per cent. At present, we suggest that you hold on to the stock to garner better profits in the long term.

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CLARIANT CHEMICALS (INDIA)

Q: I am holding shares of Clariant Chemicals (India) purchased at Rs 648 per share. Kindly advise as to whether I should hold or sell these.

- Rukshan V. Dsouza, Via Email

A: Clariant Chemicals (India), BSE/NSE Code 506390/CLNINDIA, with a face value of Rs 10, is currently trading at Rs 600. Its 52-week high/low stand at Rs 855 and Rs 554 respectively. The stock is currently trading at a 7.40 per cent premium to your acquisition cost.

Clariant manufactures and sells specialty chemicals in India. The company’s intermediates and colours segment offers pigment dyestuffs and their dispersion. Its products are used in the automotives sector, industrial and architectural paints and coatings, as well as in the plastics sector. This segment also provides colourants for printing technology, including newsprint, magazines, food packaging and security printing. In addition, it provides specialty chemicals and ethylene oxide derivatives for various industries related with consumer care and industrial applications.

On the financial front, Clariant came out with a mixed set of results for Q1CY12 (the company follows the calendar year). The topline witnessed a growth of 5.11 per cent on a YoY basis, standing at Rs 245 crore as against Rs 233 crore for Q1CY11. It reported a profit of Rs 223 crore, which actually transforms into a loss of Rs 16 crore after adjusting for Rs 240 crore of ‘Extraordinary Income’. In Q1CY12, it has posted a net profit of Rs 31.74 core, which is an achievement. This is the third consecutive quarter in which the company’s bottomline has improved. On the valuations front, it discounts its trailing 12-month earnings by 14.24x and the EV/EBITDA stands at 3.80x. At present, we suggest that you hold on to the counter.

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PHILLIPS CARBON BLACK

Q: Please advise me on whether I can buy shares of Phillips Carbon Black at the current prices.

- Satyajit Majumdar, Navi Mumbai, Maharashtra

A: Phillips Carbon Black, (PCB) BSE/NSE Code 506590/PHILIPCARB, with a face value of Rs 10, is currently trading at Rs 103.60. Its 52-week high/low stand at Rs 159 and Rs 76 respectively.

PCB engages in the manufacture and sale of carbon black in India. The company’s products are primarily used in the elastomer, plastic, paint and ink manufacturing industries. It also generates and sells power using off-gas, and has installed power generation capacity of 60.5 MW in Baroda, Durgapur, Mundra and Cochin. The company exports its carbon black products to various countries like Iran, Vietnam, Japan, South Korea, etc. to name a few.

On the financial front, its results for 9MFY12 have been quite mixed. The topline witnessed a growth of 31.53 per cent on a YoY basis, and stood at Rs 1646 crore as against Rs 1251 crore for 9MFY11. The bottomline, however, witnessed de-growth of 1.11 per cent on a YoY basis, and stood at Rs 82 crore as against Rs 83 crore for 9MFY11. On the valuations front, the company discounts its trailing 12-month earnings by 3.06x and the EV/EBITDA stands at 3.49x. The decline in profits can be attributed to the higher interest costs, which went up by 56 per cent YoY for 9MFY12. We suggest that you avoid the stock at present, and take a call on it once the yearly results are announced.