Query Board
This section gives decisive investment rationales to our subscribers on the stock queries they have raised to our research team.
FUTURE RETAIL LTD
Future Retail Limited operates some of India’s most popular retail chains that inspire trust through innovative offerings, quality products and affordable prices to help customers achieve a better quality of life every day. On a quarterly consolidated basis, the net sales and other operating income for Q3FY21 was registered at Rs1,506.87 crore, which declined by 70.98 per cent as compared to net sales and operating income of Rs5,193.19 crore for Q3FY20. The company reported an operating loss for Q3FY21 at Rs75.72 crore as against operating profit of Rs729.08 crore reported for the corresponding quarter of the previous fiscal year. The company incurred a net loss of Rs846.92 crore in Q3FY21 as against net profit of Rs166.37 crore for the third quarter of FY20. On an annual trend, the net sales and other operating income were reported to be Rs20,118.32 crore for FY20 which dipped by 0.23 per cent when compared to Rs20,164.90 crore for FY19. In FY20, operating profit increased by 95.57 per cent to reach Rs2,067.94 crore as against Rs1,057.38 crore for FY19. The company reported net profit of Rs33.84 crore in FY20 as against net profit of Rs732.81 crore in FY19, decreasing by 95.38 per cent. Hence, owing to the company’s weak financial performance coupled with decrease in promoters’ holding, we recommend AVOID.
AVENUE SUPERMARTS LTD
Avenue Supermarts Limited, the holding company of the popularly known D Mart Limited, is a one-stop supermarket chain that aims to offer customers a wide range of basic home and personal products under one roof. Taking into account the quarterly consolidated financials, net sales and other operating income for Q4FY21 stood at Rs7,411.68 crore, which increased by 18.47 per cent as compared to net sales and operating income of Rs 6,255.93 crore for Q4FY20. The company reported operating profit for Q4FY21 at Rs660.78 crore and registered gain of 46.13 per cent as compared to operating profit of Rs452.18 crore reported for the corresponding quarter of the previous fiscal year. The company bagged net profit of Rs413.87 crore in Q4FY21 whereas the net profit for Q4FY20 was Rs66.45 crore for 271.28, surging by 52.56 per cent. On an annual basis, the net sales and other operating income were reported to be Rs24,143.06 crore for FY21 which dipped by 2.92 per cent when compared to Rs1,643.20 crore for FY19. FY21 reported operating profit of Rs1,939.26 crore which decreased by 11.38 per cent as against Rs2,188.30 crore for FY20. The company reported net profit of Rs1,099.43 crore in FY21 as compared to net profit of Rs1,300.98 crore in FY20, registering a decline of 15.49 per cent. Hence, having optimistic predictions regarding future growth of the company, we recommend BUY.
J.B.CHEMICALS & PHARMACEUTICALS LTD.
J B Chemicals and Pharmaceuticals Ltd. (JBCPL) is known as one of India’s fastest growing pharmaceutical companies. Headquartered in Mumbai, JBCPL is trusted by healthcare professionals worldwide. It exports to over 30 countries across the world and earns more than half its revenue from international business. JBCPL manufactures a wide range of innovative specialty products that include various pharmaceutical dosage forms. It has a domestic sales force of 1,000 people and 17 internationally approved state-of-the-art manufacturing units and a research and development centre along with subsidiaries abroad.
Looking at its quarterly consolidated financials, net sales and other operating income for the Q3FY21 was reported to be at Rs548.22 crore, which rose by 27.9 per cent as compared to net sales and operating income of Rs428.63 crore for Q3FY20. The company reported operating profit for Q3FY21 at Rs226.94 crore as against operating profit of Rs105.98 crore reported for the corresponding quarter of the previous fiscal year, clocking significant gains. The company registered net profit of Rs154.28 crore in Q3FY21 as against net profit of Rs66.45 crore for the third quarter of FY20, jumping up substantially. On an annual basis, the net sales and other operating income were reported to be Rs1,774.73 crore for FY20, surging up by 8 per cent when compared to Rs1,643.20 crore for FY19.
FY20 reported operating profit of Rs428.24 crore, which increased by 23.31 per cent as against Rs347.28 crore for FY19. The company reported net profit of Rs272.39 crore in FY20 as compared to net profit of Rs193.97 crore in FY19, registering a gain of 40.43 per cent. The company has reported strong growth driven by key chronic segments such as cardiovascular and anti-hypertensive. The top five brands have improved their market position with more than 20 per cent growth rate. Hence, backed by the company’s focus on well-considered evaluation of synergistic and value-accretive merger and acquisition opportunities, we recommend ACCUMULATE.
GILLETTE INDIA LTD.
Gillette India Ltd., formerly known as Indian Shaving Products Ltd., is engaged in the business of manufacturing and selling branded packaged fast moving consumer goods in the grooming and oral care segments. The company has its manufacturing facilities located at Bhiwadi in Rajasthan and Baddi in Himachal Pradesh in addition to third-party manufacturing locations across India. The company operates in two segments, namely, personal grooming and oral care. The former includes blades, razors and toiletries and while the oral care segment includes toothbrushes and oral care products.
On a quarterly standalone basis, the net sales and other operating income for Q3FY21 was registered at Rs536.62 crore, an increase of 31.99 per cent as compared to net sales and operating income of Rs406.57 crore for Q3FY20. The operating profit for Q3FY21 was reported to be Rs161.3 crore, which increased significantly by 92.3 per cent as against Rs84.05 crore reported for the corresponding quarter of the previous fiscal year. The net profit jumped from Rs52.38 crore in Q3FY20 to Rs105.66 crore for the third quarter of FY21. On an annual trend, the revenue from operations were reported to be Rs1,679.06 crore for FY20, which declined by 9.81 per cent when compared to Rs1,861.65 crore for FY19. In FY20, the total income decreased by 9.85 per cent to reach Rs1,690.48 crore as against Rs1,875.25 crore for FY19.
The company reported net profit of Rs230.18 crore in FY20 as against a net profit of Rs252.92 crore in FY19, dipping by 8.9 per cent. The third quarter of FY21, however, saw a revival in demand for household and personal products as the restrictions regarding lockdown began to ease up and businesses showed revival. Analyzing the current demand, the closure of salons could lead to higher consumption of grooming products at home. For the third consecutive quarter, the company recorded that it has delivered double-digit profitable growth in a challenging environment with the support of a strong portfolio of trusted products and strong retail execution. Hence, we recommend HOLD.
(Closing price as of May 18, 2021)