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Cinemax India

I have bought shares of Cinemax India at Rs 285 per share. Should I hold these for some time?
- Mayur Mandora, Via Email

BSE/NSE Code 534711/CINEMAXIN
Face Value Rs 5
CMP Rs 266
52-Week High/Low Rs 305/Rs 71
Current Profit/(Loss) (6.67 per cent)

Cinemax India is one of the largest exhibition theatre chains in India, with 39 properties, 138 screens and 33522 seats. The company has a presence across several cities in India including Ahmedabad, Panipat, Nagpur, Hyderabad, Kolkata, Kanpur, Raipur, Gandhinagar, Mumbai, Thane, Vashi, Cochin, Baroda, Rajkot, Siliguri, Nashik, Delhi, Bengaluru, Pune and Surat. It is also set to enter the Chennai market and is launching additional properties in Pune and Bengaluru.

Let us take a look at the financial performance of the company. For Q1FY14, its topline has gone up by 19.11 per cent on a YoY basis to stand at Rs 94.23 crore as against that of Rs 79.11 crore reported during the same quarter last fiscal. However, the bottomline has witnessed a decline to the tune of 34.96 per cent on a YoY basis to stand at Rs 5.19 crore for Q1FY14 as against Rs 13.39 crore reported during Q1FY13. But the company has managed to move into the green after posting a loss in Q4FY13.

On the valuations front, the stock discounts its trailing 12-month earnings by 32.82x, which seems a tad high at this point of time. As you are sitting on minimal losses, we suggest that you hold on to the counter and take a final call after looking at the Q2FY14 numbers.

YES Bank

I am holding 1000 shares of YES Bank purchased at Rs 347 per share. Should I continue to hold these or exit?
- Birendar Dusad, Via Email

BSE/NSE Code 532648/YESBANK
Face Value Rs 10
CMP Rs 374
52-Week High/Low Rs 548/Rs 216
Current Profit/(Loss) 7.78 per cent

YES Bank is an Indian private sector bank whose line of business includes corporate and institutional banking, current accounts, financial markets, investment banking, corporate finance, branch banking, business and transactional banking, NRI banking and wealth management. The bank has a network of over 200 branches across 149 cities, and over 290 ATMs.

The bank reported a strong operating performance during the quarter. Its net interest income grew by 28.2 per cent on a YoY basis, and the non-interest income rose strongly by 61.2 per cent to stand at Rs 446 crore. This is aided by one-off MTM gains on interest rate swap positions of Rs 111 crore (which the bank utilised to fully provide for net MTM losses on the bank’s bond book). Its pre-provisioning profits grew by 47.1 per cent on a YoY basis, while the Net Interest Margins (NIMs) declined by 10 basis points on a sequential basis. The bank’s loan book registered a growth of 13.6 per cent YoY during the quarter, while customer assets (loans and credit substitutes) also grew moderately at 12.7 per cent.

On the other hand, the deposits grew strongly by 29.2 per cent. Savings deposits continued to witness robust traction and grew by 80.8 per cent on a YoY basis. On an absolute basis, the Gross NPAs increased by 25.9 per cent QoQ to Rs 132 crore, while the Net NPAs increased sequentially to Rs 19 crore.

Overall, the bank has performed well so far on the asset quality front, with credit costs contained at around 35 basis points for FY2013 and H1FY14. We advise you to hold on to this counter for the long term.

Coal India

I am holding 50 shares of Coal India purchased at Rs 250 per share. Should I book profits or hold these?
- Swapnil Salian, Via email

BSE/NSE Code 533278/COALINDIA
Face Value Rs 10
CMP Rs 289
52-Week High/Low Rs 375/Rs 238
Current Profit/(Loss) 15.60 per cent

Coal India (CIL) is an organised, state-owned coal mining entity that came into being in November 1975 with the government taking over private coal mines. With a modest production of 79 million tonnes (MTs) in the year of its inception, the company is the single largest coal producer in the world today. Operating through 81 mining areas, CIL is the apex body with seven wholly-owned coal producing subsidiaries and one mine planning and consultancy company spread over eight states in India.

CIL’s topline came in below street expectations in Q1FY14, where the company reported flattish net sales on a YoY basis to stand at Rs 16472 crore. The sales volumes stood at 115 million tonnes as compared to 113 million tonnes reported during Q1FY13. The blended realisations were lower by 2.3 per cent on a yearly basis to stand at Rs 1428/tonne.

The company’s EBITDA declined by 16.4 per cent on a YoY basis to Rs 4901 crore. This was mainly due to higher employee costs and lower e-auction realisations, which were at Rs 2140/tonne compared to Rs 2561/tonne in Q1FY13. This, coupled with a higher tax rate of 31.2 per cent in Q1FY2014 as against 26.3 per cent in Q1FY14, led to the adjusted net profit declining by 16.2 per cent on a yearly basis to Rs 3736 crore.

Since you are sitting on hefty gains already, you can use this opportunity to book profits in the counter.

Entertainment Network (India)

Should I enter this counter at the current levels? Please advise me.
- Somnath Lahiri, Via Email

BSE/NSE Code 532700/ENIL
Face Value Rs 10
CMP Rs 326
52-Week High/Low Rs 339/Rs 191
Current Profit/(Loss) N.A.

Entertainment Network India (ENIL), a subsidiary of Times Infotainment Media (TIML), the holding company promoted by Bennett, Coleman & Company (BCCL), was incorporated in 1999.

For the quarter ended June 2013, the company has posted better numbers than the street’s estimates. The income for operations improved by 23.4 per cent on a YoY basis to stand at Rs 85 crore as against Rs 68.78 crore reported during the same period last fiscal. The EBITDA improved by 48.5 per cent to stand at Rs 29.90 crore for Q1FY14 as against Rs 20.13 crore reported in Q1FY13. The Profit After Tax (PAT) improved by 53.6 per cent on a YoY basis to stand at Rs 19.92 crore for the quarter as against Rs 12.97 crore in the corresponding quarter last year. The company witnessed a 23.4 per cent growth in advertisement revenues on a YoY basis during the quarter where the industry growth was 20-22 per cent, led by strong volume growth across sectors. The lower-than-expected costs further boosted the operating profits by 48.5 per cent on a YoY basis.

For the radio industry, the management expects the government spends to increase during elections, while the companies are already increasing consumer promotions in the festive season. The Telecom Regulatory Authority of India’s (TRAI) 10+2 minutes advertisement cap for television ought to benefit other mediums, as more than 35 per cent of the volumes for television industry is expected to be cut. Following this, the advertisement rates for the radio industry are set to increase.

You can enter the stock in a staggered manner at the current levels.

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