Query Board
This section gives decisive investment rationales to our subscribers on the stock queries they have raised to our research team.
IRB INFRASTRUCTURE DEVELOPERS LTD.
Incorporated in 1998, IRB Infrastructure Developers Ltd. has become India’s leading and one of the largest infrastructure development companies in the build, operate and transfer (BOT) space, committed to the roads and highway sector. The company’s quarterly consolidated financials reveal that the operating profit for Q3FY22 is ₹ 957.04 crore as compared to the operating profit of ₹ 767.61 crore for Q3FY21, an increase by 24.68 per cent. Net sales for Q3FY22 were at ₹ 1,279.11 crore, recording a decrease of 17.32 per cent as compared to net sales of ₹ 1,547.16 crore in the same quarter last year. The net profit has also been on the higher side and stands at ₹ 168.89 crore since the same period which was at ₹ 88.72 crore, 90.37 per cent higher from Q3FY21. The annual performance of net sales reported is ₹ 5,298.63 crore for FY21, which has decreased by 22.67 per cent from last year’s value of ₹ 6,852.22 crore. The operating profit for FY21 stood at ₹ 2,701.56 crore as compared to operating profit of ₹ 3,166.36 crore for FY20, a fall of 14.68 per cent. The company has delivered net profit of ₹ 282.94 crore for FY21 as compared to net profit of ₹ 736.71 crore for FY20, a drop by 61.59 per cent. With the quarterly result looking better and restrictions related to the pandemic being lifted, toll collections are likely to return to the pre-pandemic stage and therefore the company expects better revenues in the future. Hence, we recommend HOLD.
YES BANK LTD.
Founded in 2004, Yes Bank has fructified into a full service commercial bank that has steadily built corporate and institutional banking, financial markets, investment banking, corporate finance, branch banking, business and trans- action banking and wealth management business lines across the country. The company’s quarterly consolidated financials depict that the interest income for Q3FY22 was recorded at ₹ 4,896.61 crore as compared to interest income of ₹ 5,320.56 crore for Q3FY21, a decrease of 7.97 per cent. The total income for Q3FY22 was seen at ₹ 5,664.33 crore, recording a decrease of 11.99 per cent as compared to total income of ₹ 6,435.88 crore in the same quarter last year. The net profit stands at ₹ 265.76 crore as compared to ₹ 147.68 crore, 79.96 per cent up from Q3FY21. The annual performance of net interest income reported is ₹ 20,039.28 crore for FY21, which has weakened by a substantial margin from last year’s ₹ 26,052.02 crore. Total income stood at ₹ 23,475.39 crore as compared to total income of ₹ 29,593.12 crore for FY20. The company has delivered net loss which declined and stood at ₹ 3,488.93 crore for FY21 as compared to net loss of ₹ 16,432.58 crore for FY20. Poor asset quality, sub-par return ratios and elevated NPA levels along with weak operating performance and weak earnings’ expectations are not in favour of the bank’s progress. Hence, we recommend AVOID.
ADITYA BIRLA FASHION AND RETAIL LTD
In May 2015, Aditya Birla Fashion and Retail Ltd. (ABFRL) was formed from the unification of the Aditya Birla Group’s branded clothing operations, which included ABNL’s Madura Fashion division as well as ABNL’s subsidiaries, Pantaloons Fashion and Retail (PFRL) and Madura Fashion and Lifestyle (MFL). PFRL was renamed Aditya Birla Fashion and Retail Ltd. after the merger. ABFRL is a subsidiary of the Aditya Birla Group, a Fortune 500 worldwide company. The group is established on a strong foundation of stakeholder value generation, anchored by an outstanding force of over 1,40,000 workers representing 100 nationalities.
Over half of the group’s sales now come from its international businesses, which cover 36 countries in North and South America, Africa and Asia. The company’s quarterly consolidated financials reveal that the operating profit for Q3FY22 is ₹ 606.41 crore as compared to the operating profit of ₹ 421.50 crore for Q3FY21, an increase by 43.87 per cent. Net sales for Q3FY22 were ₹ 2,987.10 crore, recording an increase of 43.87 per cent as compared to the net sales of ₹ 2,076.19 crore in the same quarter last year. The net profit has also been on the upper side and stands at ₹ 194.40 crore since the same period which was at ₹ 58.44 crore, higher by 232.65 per cent from Q3FY22.
The annual performance of net sales reported is ₹ 5,248.92 crore for FY21, which has decreased by 40.27 per cent from last year’s value of ₹ 8,787.86 crore. The operating profit for FY21 stood at ₹ 628.15 crore as compared to an operating profit of ₹ 1,277.13 crore for FY20, a decrease of 50.82 per cent. The company has delivered net loss of ₹ 735.66 crore for FY21 as compared to net loss of ₹ 165.02 crore for FY20. It has aggressive store addition plans for FY23 and has done multiple strategic initiatives in the past year. Looking at the annual performance, the operating margin looks weak. Hence, we recommend AVOID.
TATA MOTORS LTD.
Tata Motors Group (Tata Motors) is a USD 34 billion organisation. It is a leading global automobile manufac- turing company. Its diverse portfolio includes an extensive range of cars, sports utility vehicles, trucks, buses and defence vehicles. Tata Motors is one of India’s largest OEMs offering an extensive range of integrated, smart and e-mobility solutions. The company’s quarterly consolidated financials reveal that the operating profit for Q3FY22 is ₹ 7,780.59 crore as compared to operating profit of ₹ 12,844.70 crore for Q3FY21. As a part of the $110 billion Tata group founded by Jamsetji Tata in 1868, Tata Motors is among the world’s leading manufacturers of automobiles.
This indicates a decrease of 39.43 per cent. Net sales for Q3FY22 were at ₹ 71,406.77 crore, recording a decrease of 4.64 per cent as compared to net sales of ₹ 74,878.98 crore in the same quarter last year. The company suffered from net loss at ₹ 1,338.17 crore in Q3FY22 as compared to net profit which was at ₹ 3,222.21 crore for Q3FY21. The annual performance of net sales is ₹ 2,49,794.75 crore for FY21, which has decreased by 4.32 per cent from last year’s value of ₹ 2,61,067.97 crore.
The operating profit for FY21 stood at ₹ 34,930.62 crore as compared to an operating profit of ₹ 20,960.22 crore for FY20, a phenomenal increase of 66.65 per cent. The company has delivered net loss of ₹ 13,016.14 crore for FY21 as compared to net loss of ₹ 10,975.23 crore for FY20. The company reported strong Quarterly Results. It has implemented cost control, efficiency improvement strategies and expects healthy demand this year. The tremendous effort of the company to break into Electric Vehicle (EV) space and to create alertness still continues as the TML is a market leader in the Nexon series and plans to introduce 10 models by 2025 and an all-electric vehicle with JLR and six BEVs (Battery Electric Vehicle) in Land Rover in the next five years. Profit margins are expected to increase by almost 15 per cent in FY24. Hence, we recommend BUY.
(Closing price as of Apr 13, 2022)