Query Board
Skyline Millars Limited is engaged in activities pertaining to construction equipment, real estate and precast pipes. Its construction equipment segment operates in the areas of equipment and spares sales, repair, installation and servicing of equipment. On a consolidated quarterly front, the company reported net sales of Rs0.16 crore in Q3FY20, down by 69.23 per cent from Rs0.52 crore in Q3FY19. The company incurred an operating loss of Rs0.27 crore in Q3FY20 as compared to an operating loss of Rs0.19 crore in Q3FY20. The net loss incurred in Q3FY20 was Rs0.28 crore and Rs0.31 crore in Q3FY19. On an annual front, its net sales grew by 47.21 per cent in FY19 to Rs4.49 crore from Rs3.05 crore in FY18. The company reported an operating profit of Rs0.15 crore in FY19 as against an operating loss of Rs0.79 crore incurred in FY18. The net loss incurred in FY19 was Rs0.21 crore and Rs3.41 crore in FY18. In the current challenging economic environment, the realty sector continues to be sluggish and suffers from low demand, increasing cost and slow regulatory approvals. These concerns were not addressed in the fiscal budget, with the government not providing any sector-specific incentives to boost sluggish home sales. Skyline Millars has posted net losses consecutively for the past five years and we do not see any fundamental drivers to stay invested in this stock. Thus, we recommend a SELL.
Confidence Petroleum India Limited is a manufacturer of liquefied petroleum gas (LPG) cylinders for domestic as well as for commercial use. The company’s LPG and CNG cylinder manufacturing segment includes production and marketing operations of cylinders. The LPG bottling and marketing segment includes bottling of LPG as well as sale for commercial usage. Its divisions include cylinder division, auto LPG dispensing stations (ALDS) division and LPG trading, refilling and packed cylinder division. It engages in the business of LPG and auto LPG manufacturing of packed cylinder in the brand name of Go Gas. On the consolidated financial front, the net sales for Q3FY20 were Rs256.19 crore, decreasing by 9.48 per cent as compared from Rs283.04 crore for Q3FY19. PBDT for Q3FY20 was Rs37.07 crore, an increase by 10.99 per cent from Rs33.40 crore for Q3FY19. In Q3FY20, it gained a net profit of Rs18.06 crore, registering de-growth of 2.84 per cent as compared to Rs18.58 crore gained in Q3FY19. Looking at the annual trend, the net sales grew by 65.56 per cent to Rs1,004.53 crore in FY19 from Rs606.75 crore in FY18. In FY19 its PBDT stood at Rs120.21 crore, increasing by 93.61 per cent from Rs62.09 crore in FY18. The company gained a net profit of Rs64.34 crore as compared to Rs26.57 crore gained in FY18. Thus, we recommend a HOLD.
Marico Industries Limited is a consumer products’ company which operates in the beauty and wellness space. Its principal products include edible oils and value-added hair oils. It offers various brands in the categories of hair care, skincare, health foods, male grooming and fabric care. In India, the company manufactures and markets products under various brands such as Parachute, Parachute Advanced, Nihar, Nihar Naturals, Saffola, Hair and Care, Revive, Mediker, Livon, Set-Wet and Code 10. Its subsidiaries include Marico Bangladesh Limited, Marico Middle East FZE, Marico South Africa (P) Limited and Marico Consumer Care Limited.
On a consolidated quarterly front, net sales fell by 2 per cent to Rs1,824 crore in Q3FY20 as compared to Rs1,861 crore in Q3FY18. The company reported an operating profit of Rs358 crore in Q3FY20, up by 5 per cent from Rs341 crore in Q3FY19. Net profit was reported at Rs276 crore in Q3FY20, increasing 10 per cent from Rs251 crore of net profit reported in the corresponding period for the previous fiscal year. On an annual basis, the net sales grew by 15.81 per cent in FY19 to Rs7,334 crore from Rs6,333 crore in the previous fiscal year. The company reported an operating profit of Rs1,263 crore in FY19, up by 13.07 per cent as compared to Rs1,117 crore in FY18. Profit after tax grew by 37.24 per cent to Rs1,135 crore in FY19 from Rs827 crore in the previous fiscal year.
Owing to the slowdown in consumption, particularly in rural areas, the overall growth has been muted and this has thereby affected volumes. However, the government has taken initiatives in the recently announced fiscal budget to spur growth by increasing the spending power via lowering of taxes and providing a much-needed thrust to development in rural areas. This is likely to lead to a revival in rural consumption which should bode well for the company in the coming months. Further, the company’s operating leverage, cost efficiencies and product mix improvement should aid in margin improvement. We thus recommend a HOLD on Marico Industries.
Vascon Engineers Limited is an engineering, procurement and construction (EPC) company which also engages in real estate development, hospitality, manufacturing and building management systems (BMS). The company’s primary EPC segment deals with the construction of residential, commercial, industrial and other constructions, whereas the real estate development segment engages in the development of residential, hotel premises and industrial parks. Its hospitality segment conducts hotelier activities and the manufacturing segment undertakes manufacturing of clean room partition and BMS. It has a presence in Karnataka, Uttar Pradesh, Tamil Nadu, Punjab, Maharashtra and Goa.
On a consolidated quarterly front, the company reported net sales of Rs143.38 crore in the quarter ended December 2019, increasing by 29 per cent from Rs111.11 crore in the quarter ended December 2018. Its operating profit saw a significant jump on a YoY basis in Q3FY20 to Rs30.71 crore from Rs4.24 crore in Q3FY19. Similarly, the company reported a jump in net profit to Rs30.37 crore from Rs4.26 crore in the same period for the previous fiscal year. On an annual basis, net sales fell by 3.05 per cent to Rs524 crore in FY19 as compared to Rs541 crore in FY18. The company reported an operating profit of Rs4.25 crore in FY19, decreasing 15 per cent from Rs5 crore in FY18. On the other hand, the company’s net profit rose by 13.33 per cent in FY19 to Rs5.27 crore from Rs4.65 crore reported in the previous fiscal year.
The company’s strategy of concentrating only on its core EPC and real estate business has been yielding results and put it back on the growth track. The company has more than doubled its order book since the start of the financial year and bagged some large orders in the process, including one from the Mumbai Metro Rail Corporation in February 2020. Owing to the company’s healthy order book and execution capabilities, it has strong EPC revenue visibility for the next three years. Thus, we recommend a HOLD on Vascon Engineers.
Ashok Leyland is a manufacturer of commercial vehicles such as medium and heavy commercial vehicles, light commercial vehicles, passenger vehicles and automobile components and services related to automotive aggregates, vehicle financing and engineering design services. It offers a range of trucks, which include long-haul trucks, mining and construction trucks and distribution trucks. The company designs, develops and manufactures defence vehicles for the armed forces as well. In addition, the company offers power solutions for electric power generation, earth moving and construction equipment, agricultural harvester combines and marine and other non-automotive applications. The automotive giant recently accomplished its mission to be amongst the top 10 manufacturers of medium and heavy commercial vehicles and among the top five bus manufacturing companies globally in terms of volume.
On a quarterly consolidated front, the net sales dropped by 30.48 per cent in Q3FY20 to Rs5,148.15 crore from Rs7,405.78 crore in Q3FY19. For Q3FY20 the PBDT decreased as well by 59.96 per cent at Rs301.24 crore as compared to Rs752.42 crore for Q3FY19. Similarly, net profit also fell by 86.79 per cent to Rs56.64 crore in Q3FY20 as compared to Rs428.73 crore gained in the same quarter for the previous fiscal year. On an annual front, the company reported net sales of Rs32,753.24 crore in FY19, up by 10.94 per cent from Rs29,522.13 crore reported in FY18. PBDT grew by 10.35 per cent to Rs3,535.94 crore in FY19 as compared to Rs3,204.25 crore reported in the previous fiscal year. In FY19, the company gained a net profit of Rs2,183.32 crore, which is an increase by 20.81 per cent from Rs1,807.25 crore gained in FY18. In tandem with the automotive industry’s slow growth, Ashok Leyland reported a weak performance for the recently ended third quarter of FY20 as well. The automotive industry continues to await the announcement of a scrappage scheme which will aid in the growth of the industry’s demand for FY21. Hence, we recommend our investor-readers to HOLD.
Jiya Eco-Products Limited (JEPL) is engaged in the manufacturing of bio fuels like bio briquettes and bio pellets energy from agricultural waste and forest waste such as cotton stalk, groundnut shells, cumin waste, forest leaves, household waste, juliflora, etc. which is an alternative source for other commonly used feed such as coal, charcoal, firewood, diesel, petrol and LPG. It provides a 30-50 per cent savings as compared to regular fuel. The company’s main business segments include manufacturing of bio fuel, pellets, kutti and stoves. It produces bio fuel and biomass pellets of various sizes, including approximately 6 mm over 8 mm and approximately 10 mm.
The company has an existing plant at Bhavnagar located in Gujarat with a capacity of 1,19,680 MTPA for briquettes and 1,19,680 for pellets. The bio fuel is made by grinding biomass. A unique feature of its bio fuel is that it does not emit smoke with sulfur or phosphorus or fly ash. On the consolidated financial front, the net sales for Q3FY20 was Rs42.88 crore which is a decrease of 25.10 per cent as compared to net sales of Rs57.26 crore for Q3FY19. The PBDT for Q3FY20 was reported to be Rs7.65 crore which is a decrease of 2.36 per cent as against Rs7.83 crore reported for Q3FY19. There was a decrease in the net profit by 23.82 per cent gained for the third quarter of FY20 to Rs5.20 crore when compared to Rs6.83 crore for the third quarter of the previous fiscal year.
Looking at the annual trend, the net sales were reported to be Rs213.26 crore for FY19, thus increasing by 130.35 per cent when compared to Rs92.58 crore for FY18. In FY19, PBDT also increased by 112.89 per cent to Rs28.74 crore from Rs13.50 crore for FY18. The company’s net profit gained in FY19, which rose significantly by 113.93 per cent to reach Rs18.27 crore from Rs8.54 crore in FY18. The market demand for the company’s products continues to increase due to improvement in its product quality and offerings as it believes in adding value and premium quality products to its portfolio. Thus, for a long-term basis, we recommend a HOLD.