Your Stock Queries
7/12/2012 9:00 PM Thursday
DSIJ equity research experts add value to subscriber's stock portfolio by giving unbiased advice. Ask about your portfolio problem and get your stock queries answered.
SURYACHAKRA POWER CORPORATION
Q: I am holding 7050 shares of Suryachakra Power Corporation bought at Rs 3.75 per share. Should I hold the stock or sell it off?
- Pankaj Sahu, Via Email
A: Suryachakra Power Corporation (SPCL), BSE Code 532874, with a face value of Rs 10, is currently trading at Rs 1.50, which is at a 60 per cent discount to your acquisition cost. Its 52-week high/low stand at Rs 14 and Re 1 respectively.
SPCL, together with its subsidiaries, engages in the generation and sale of electricity in India. The company owns and operates two biomass-based power plants at Champa-Janjgir and Raipur in Chhattisgarh. It is also developing two more biomass-based power projects of 10 MW each at Amravati and Hingoli in Maharashtra.
On the financial front, the company’s performance has not been very impressive. The topline witnessed a growth of merely 7.10 per cent for FY12, and stood at Rs 153.66 crore as against Rs 143.48 crore for FY11. For the first time in the last six years, the company has reported a loss of Rs 3.48 crore for FY12 as against a profit of Rs 4.04 crore for FY11. This was primarily on account of the higher interest cost, which went up by 56 per cent on a YoY basis for FY12. The operating and the net profit margins have witnessed a drop by 10 basis points and 497 basis points respectively.
At present, we suggest that you exit the stock even if you have to book losses.
Q: I am holding 500 shares of Allcargo Logistics purchased at an average price of Rs 110 per share. Please guide me as to what I should do with this stock.- Subhashis Saha, Via Email
A: Allcargo Logistics, BSE/NSE Code 532749/ALLCARGO, with a face value of Rs 2, is currently trading at Rs 130.25, which is at an 18 per cent premium to your cost of acquisition. Its 52-week high/low stand at Rs 176 and Rs 108 respectively.
Allcargo provides logistics services globally. The company offers specialised logistics services across multimodal transport operations, container freight station operations and project & engineering solutions. It currently operates out of its 140 offices in 62 countries, and is supported by an even larger network of franchisee offices across the world.
It has posted its 15-month results as of March 2012, which is not comparable with its corresponding period performance. For a more meaningful comparison, we have considered its performance for CY11. The topline witnessed a growth of 18.70 per cent for CY11 to touch Rs 3396.30 crore. It reported a profit of Rs 222.87 crore in CY11 as against Rs 165.92 crore for CY10, witnessing a growth of 34.32 per cent. The stock discounts its trailing 12-month earnings by 7.67x and its EV/EBITDA stands at 6.50x. The debt-to-equity ratio stands at a mere 0.34x, which is a positive sign. It also has an impressive dividend yield of 2.32 per cent.
At present, we suggest that you hold on to the stock from a longer-term perspective if you are not in a hurry to sell it off.
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