Query Board
This section gives decisive investment rationales to our subscribers on the stock queries they have raised to our research team.
FEDERAL BANK
Federal Bank is a preferred banking partner for a growing expanse of customers across India, in both urban and rural areas. Federal Bank is an old private sector bank based out of Kerala with around 1,274 branches and 1,957 ATMs across various states. The company’s quarterly consoli- dated financials depict that the interest income for Q3FY22 has been recorded at ₹ 3,442.56 crore as compared to the interest income of ₹ 3,459.52 crore for Q3FY21, a decrease of 0.50 per cent. The total income for Q3FY22 was seen at ₹ 3,926.75 crore, recording a minimal decrease of 0.21 per cent as compared to a total income of ₹ 3,934.90 crore in the same quarter last year. The net profit stands at ₹ 521.73 crore as compared to ₹ 404.10 crore, 29 per cent up from Q3FY21. The annual performance of net interest income reported is ₹ 14,314.08 crore for FY21, which has improved by a narrow margin from last year’s ₹ 13,590.4 crore. The total income stood at ₹ 16,271.93 crore as compared to a total income of ₹ 15,472.2 crore for FY20. The company has delivered net profit that declined and stood at ₹ 1,647.2 crore for FY21 as compared to that of ₹ 1,552.7 crore for FY20. The bank has a selective credit disbursement strategy which helps earning growth and profitability. Its improving return ratios profile makes it a good company to be invested in. Hence, we recom- mend HOLD.
HP ADHESIVES LIMITED
HP Adhesives Limited (HPAL) is an adhesives and sealants company. It manufactures a wide range of consumer adhesives and sealants such as PVC, cPVC, and uPVC solvent cement, synthetic rubber adhesive, PVA adhesives, silicone sealant, acrylic sealant, gasket shellac, other sealants and PVC pipe lubricants. The company’s quarterly standalone financials reveal that the operating profit for Q3FY22 is ₹ 4.45 crore as compared to the operating profit of ₹ 4.95 crore for Q3FY21, a decrease of 10.22 per cent. Net sales for Q3FY22 stand at ₹ 43.66 crore, recording an increase of 26.02 per cent as compared to net sales of ₹ 34.65 crore in the same quarter last year. The net profit has also been on the steeper side and stands at ₹ 2.15 crore since the same period which was at ₹ 3.13 crore, 31.34 per cent down from Q3FY21. The annual performance of net sales reported is ₹ 1,238.79 crore for FY 2021, which has improved by 26.52 per cent from last year’s ₹ 979.07 crore. The company has managed to deliver net profit of ₹ 10.06 crore for FY 2021 as compared to net loss of ₹ 4.67 crore for FY 2020. Even though the company has managed to post higher revenues on a QoQ basis, the PAT has decreased considerably. The company is struggling to manage its working capital even though its ROA is at a decent number. Hence, we recommend AVOID.
INDIAN RAILWAY CATERING AND TOURISM CORP.
Indian Railway Catering and Tourism Corporation (IRCTC) is a distinguished Mini Ratna, Category 1, central public sector enterprise incorporated in 1999 as an extended arm of the Indian Railways. The company was formed with the objective to upgrade its catering and hospitality services to appropriately meet the needs of the modern age. It is a sole entity authorised to deliver catering, online ticket booking and packaged drinking water on trains and railway stations. Along with other services like global reservation systems, budget hotels, e-catering and executive lounges, the company is a one-stop solution for domestic and international customers to cover their travelling, accommodation and tourism needs.
The company’s quarterly standalone financials show that the operating profit for Q3FY22 is at ₹ 295.48 crore as compared to the operating profit of ₹ 115.51 crore for Q3FY21, up by 155.81 per cent. Net sales for Q3FY22 stand at ₹ 540.21 crore as compared to net sales in the Q3FY21of ₹ 224.3 crore, up by 140.76 per cent. The net profit has been incredible and stands at ₹ 208.81 crore as compared to Q3FY21 which was at ₹ 78.09 crore, up by 167.41 per cent. The annual performance of net sales is at ₹ 783.05 crore for FY 2021, which has decreased considerably from last year’s figure of ₹ 2,264.31 crore by almost 65.42 per cent owing to the pandemic-related lockdown restrictions that Indian Railways faced.
The operating profit stood at ₹ 275.92 crore as compared to an operating profit of ₹ 778.44 crore for FY 2020, a decrease of 64.55 per cent. The company has posted profit after tax of ₹ 189.90 crore for FY 2021 as compared to ₹ 513.11 crore for FY 2020, which was down by 62.99 per cent. IRCTC has posted incredible results in the post-pandemic period with consistent growth in PAT margins, earnings and revenue. With the newly assigned budget for Indian Railways and new railway lines coming in place, the company is looking forward to improving its footprint all the more in the way of alliances and new projects. Hence, we recommend BUY.
ZEE ENTERTAINMENT ENTERPRISES LTD.
Zee Entertainment Enterprises Limited (ZEE) is a global media and entertainment conglomerate with a presence across television broadcasting, movies, music, live entertainment and digital businesses. Over the years, the company has grown and expanded its footprint from South Asia to almost the whole world. ZEE owns and operates a bouquet of 49 TV channels across 11 languages and also an OTT app called ZEE 5.
The company’s quarterly consolidated financials reveal that the operating profit for Q3FY22 is ₹ 491.78 crore as compared to the operating profit of ₹ 659.34 crore for Q3FY21, a decrease of 25.41 per cent. Net sales for Q3FY22 stand at ₹ 2,112.64 crore, recording an increase of 22.6 per cent as compared to the net sales of ₹ 2,729.36 crore in the same quarter last year. The net profit has also been on the steeper side and stands at ₹ 298.91 crore since the same period which was at ₹ 398.28 crore, 24.95 per cent less from Q3FY21.
The annual performance of net sales reported is ₹ 7,729.92 crore for FY 2021, which has decreased by 4.92 per cent from last year’s value of ₹ 8,129.86 crore. The operating profit stood at ₹ 1,704.31 crore as compared to an operating profit of ₹ 1,658.54 crore for FY 2020. The company has delivered a commendable net profit of ₹ 793.14 crore for FY 2021 as compared to ₹ 526.99 crore for FY 2020, up by 50.5 per cent. The viewership numbers for ZEE have remained somewhat sub-optimal.
The channel has managed to turn around its lost viewership in the regional markets of Tamil, Marathi compared to the last financial year. The merger with Sony and its execution will work to the benefit of the company as it will become the second-largest entertainment network by revenue and will drive sharper content creation across platforms, strengthen its footprint in the rapidly evolving digital ecosystem, bid for media rights in the fast-growing sports landscape and pursue other growth opportunities. Hence, we recommend HOLD.