Menu

Author Archives: Shanti Pandey

  • Home>
  • Archives for Shanti Pandey
BKT announced a net profit of Rs. 306 crores in Q1 FY23.
Equities, Markets, Result Updates - August 23, 2022

BKT announced a net profit of Rs. 306 crores in Q1 FY23.

BKT announced a net profit of Rs. 306 crores in Q1 FY23.

In June 2022, net sales were Rs 2,619.43 crore, up 45.29% from Rs 1,802.87 crore in June 2021, and consolidated total income was Rs 2483.58 crore, up 15.04% from the previous quarter. The net profit was at Rs. 306.96 crores in June 2022, down 7.14% from Rs. 330.56 crores in June 2021. The company’s reported earnings before interest, taxes, depreciation, and amortisation (Ebitda) margins were down 550 basis points (bps) quarter-on-quarter (QoQ) and 910 bps year-on-year (YoY) to 20.1 percent.

BKT tyres are experiencing a sustained increase in demand.

Raw materials prices have remained at elevated levels during the current quarter. The raw material costs have come to 46.6% of sales in Q1FY23 as against 42.8% in Q1FY22 and 45.3% in Q4FY22. The management expects the ease in raw material prices to be visible from Q4FY23 onwards. It also expects relief in logistics towards the end of Q3 or early Q4. There is a continued and sustained uptick in demand for tires. However, in Q2, it is expected to have sluggish demand given macro challenges in Europe coupled with heat waves and inflationary trends in the USA. However, the management retained its sales volume guidance of 3.2-3.3 lakh tonnes for FY23.

Balkrishna Industries’ margin performance was the real constraint. Gross margin erosion was sharp at 150 bps QoQ, while other expenses (driven by higher freight costs) were up 210 bps QoQ. The management commentary suggests Q2FY23 will be weak amidst sluggish demand prospects in Europe and the US. BKT’s key product range comprises specialty tires, commonly known as “Off-Highway Tires” or OHT, that cater to agriculture, industrial, construction, earthmoving, mining, port, lawn and garden, and all-terrain vehicle tires. Besides, the company’s carbon black product is used captively and the balance is sold in the markets.

Tires are a highly technical and capital-intensive segment, also known as the “large variety, low volume segment.” The credible players are required to maintain a large number of stock-keeping units to meet the diverse needs of their customers globally and also provide prepared-and-sale customer service.

While agriculture is regarded as non-cyclical, the other sub-segment is considered cyclical. Their performance is closely tied to the global economic outlook. Europe, America, Australia, and India are the primary markets for the company’s tyre lines.

Valuations:

Balkrishna Ind EPS has decreased to Rs. 15.88 in June 2022 from Rs. 17.10 in June 2021. The stock P/E is valued at 29x, while the five-year P/E is at 24.9x. The return on capital employed is at 23.8% and the return on equity is at 21.9%. The EBITDA stood at 18.1x. The interest coverage ratio is at 201 and the return on assets is at 14.8%. The scrip was trading at Rs.2,122, up by 0.19% on Tuesday.

0 Comment
Read More
Business, Equities, Markets, Research Reports - August 23, 2022

Financial Results for Pokarna LTD.

Financial Results for Pokarna LTD. (Q1 FY2023)

Pokarna Ltd has reported an income of Rs. 240.3884 crores during the period ended June 2022 as compared to Rs. 205.2388 crores during the period ended March 2022. The company has posted a net profit or (loss) of Rs. 28.4906 crores for the period ended June 30, 2022, as against a net profit or (loss) of Rs. 20.1066 crores for the period ended March 31, 2022. The EBITDA stood at Rs. 46.02 crores in March 2022, up 107.58% from Rs. 22.17 crores in March 2021. The margins would have been better but for the forex loss of Rs. 6.82 cr on account of restatement of debt drawn for establishing a new unit, which was offset against the forex gain on exports. The net forex loss charged to the P & L account is Rs. 1.65 cr, reported under other expenses.

Business growth remains strong.

The business environment remains challenging. While sequentially there is an improvement, on an overall basis, business continues to face growth hurdles. The revenue growth remains strong on the back of higher offtake and new product launches. We expect sales momentum to be sustained as new units start ramping up production. The operating margins stood at 25% for the quarter. The focus is on improving the capacity utilisation of new quartz units. Supply chain disruptions, port congestion, container unavailability, and rising shipping costs continue to pose a challenge. The exports to the East Coast, though, have smoothened to an extent. The states of Telangana and Andhra Pradesh are found to be home to some of the best quality quartz raw materials. In addition to private label manufacturing, it is distributed and supplied across the globe under the brand name Quantra. The sourcing of the majority of raw material was from captive quarries, which are home to some of the most sought-after colors. The company’s colour palette includes over 75 varieties of granite sourced from India, Ukraine, Madagascar, and Norway. The deep and entrenched relationship with dealers across key regions of operations

Valuations:

Pokarna EPS stood at Rs. 6.49. The Return on Capital Employed was at 2.39%, whereas the Return on Equity (ROE) was at 0.06%. The EBITDA was at 172x and the P/E ratio was at 52.2x. The price-to-book ratio was recorded at 13.2x and the interest coverage ratio was at 0.33x. The scrip was trading at Rs.550, down by 2.90% on Monday.

, , , 0 Comment
Read More
Godha Cabcon & Insulation Reports Q1 2026 Results
Business, Equities, Markets, Research Reports - August 22, 2022

Mold-Tek reported a sale of Rs. 207 crores.

Mold-Tek reported a sale of Rs. 207 crores.

Mold Tek Packaging has reported an almost 80% increase in net profit to Rs 21.71 crore for the June quarter. The total sales were at 207.8 crore, an increase of 55% from the year-earlier period and 16.81% up from Q4 FY22. The profit before tax was Rs. 29 crores and the volume growth was 51.17%. While the inflationary environment continued to impact the margins, the company delivered healthy operating margins of 18% with its focus on IML packs and operational efficiencies across all segments. They have a huge CAPEX of Rs. 125 Cr. planned in FY. 22-23. The EBIDTA was up by 46.84% from June 2021 and 13.59% from Q4 of FY22. The EBIT for the quarter increased by 46.84 % to Rs. 37.3 crore from Rs. 25.40 crores.

Expansion Plans:

As previously stated, the company intends to invest 125 crores in capital expenditures this fiscal year on capacity at its facilities in Hyderabad, Daman, Visakhapatnam, and Kanpur. It has also been decided to set up a second plant in Daman with robotic IML facilities to produce food and FMCG IML containers to meet the growing customer demand in the western region. For the value of a company’s earnings growth, it is very important to consider any dilution of shareholders’ interests. As it happens, Mold-Tek Packaging issued 13% more new shares over the last year. Therefore, each share now receives a smaller portion of the profit.

The company raised equity from QIP and the allottees who have been allotted more than 5% in the QIP are Goldman Sachs Funds—Goldman Sachs India Equity Portfolio (27.61%), Ashoka India Equity Investment Trust PLC (21.24%), Aditya Birla Sun Life Trustee Private Limited A/C (19.30%), ICICI Prudential SmallCap Fund (14.48%) and White Oak India Equity Fund IV (10.62%). Mold-Tek Packaging utilised the net proceeds from the QIP issue for the company’s ongoing and future capital expenditure requirements, working capital requirements, debt repayment, and general corporate purposes.

Mold-Tek Packaging has a weak cash flow relative to earnings, which indicates lower quality earnings, and the dilution means its earnings per share growth is weaker than its profit growth. For the reasons mentioned, we think that an unthinking glance at Mold-Tek Packaging’s statutory profits might make it look better than it is on an underlying level.

Valuation:

The EPS was at Rs. 23.8. for the June quarter, up by 54.82% Q1 from June 2021 and by 17.81% from the Q4 of FY22. The Return on Capital Employed was 22.5%, whereas the Return on Equity (ROE) was 18.2%. The EBITDA was at 24.2x and the P/E ratio was at 43.8x. The price-to-book ratio was 6.62x and the interest coverage ratio was 14.0x. The scrip was trading at Rs.970, down by 0.39% on Monday.

 

, , , 0 Comment
Read More
Bharti Airtel Stock Hits Fresh 52-Week High on Strong Market Momentum
Business, Equities, Markets, Result Updates - August 20, 2022

Bata India reported a 71.82% increase in consolidated net profit of Rs 119.37 crores

Bata India Ltd. posted its highest ever quarterly sales:

Bata India reported a 71.82% increase in consolidated net profit of Rs 119.37 crores for the first quarter, as the shoemaker achieved the “highest ever quarterly sales”. The company posted a net profit of Rs 69.47 crores in June 2021. Its revenue during the June quarter was Rs 943.01 crore, up over three-fold from Rs 267 crore in the pandemic-hit corresponding quarter of FY22. Bata India’s total expenses were at Rs 792.58 crore, up two-fold in Q1FY23 as against Rs 371.61 crore a year ago. During the quarter, the company continued to improve cost structures and increase efficiencies across the company. The digital channel sales momentum was due to three levers: D2C bata e-store, marketplaces, and omni-channel home delivery.

Cost-focus initiatives to drive the quarterly results:

A direct result of focus on key areas of franchise and MBO expansion and digital footprint expansion is seen in the quarterly results.  This is done continuous improvement in portfolio and marketing investments. Moreover, footfalls across retail outlets saw a significant spike, besides sales through digital channels. All the cost-focused initiatives, which have been put in place across multiple work streams, are showing increasing impact this quarter. Bata is witnessing a significant uptick in sales with rising demand for fashionable and comfortable footwear.

They continue to expand their reach through new franchise stores and multi-brand outlets. They have opened 20-plus new franchise stores, taking the total number to over 320, with a strong future pipeline and expanded availability via a distribution channel that continued to scale up to close to 1,100 towns. Almost 60+ stores renovated during the June quarter. Simultaneously, Bata also focused on driving volumes in these inflationary times, which should have an impact in the ensuing period. 

In the face of volatile inflation and geopolitical unrest, they are cost efficient and accordingly planning cost-savings measures across their network, which has reflected in the profitability. They are continuing to flesh out new opportunities across all value chains, which will help them capture the emerging consumer demand efficiently. They continue to be optimistic about the momentum going ahead, driven by innovation, scaling up digital channels, expansion in Tier 3-5 towns, and productivity enhancement in brands and stores.

The Net Promoter Score (NPS), feedback for loyalty for all offline and online channels that Bata services, stood at 70%. It was the continued growth of the sneaker category that led to the growth recovery. The sneaker studio in 125 stores to display up to 300 styles across 9 brands. Bata continued with an expansion drive in tier 3–5 cities. The company continued to expand its distribution business in MBOs across 1100 towns.

Valuations:

The EPS was Rs. 22.7 for the June 2022 quarter. The ROCE was at 8.37%, whereas the ROE was at 5.74%. The EBITDA stood at 33.2x for Q1 FY23. The price to book value was at 13.6x. The P/E was at 84.9x, while the 5 year P/E was at 45.9x for Bata India Ltd. The return on assets was 2.99% for the same quarter. The shares of Bata India Ltd on Friday settled at Rs 1927, up 0.25% from the previous close.

, , , 0 Comment
Read More
Dish TV reported a net profit of Rs. 17.85 crores
Business, Equities, Markets, Result Updates - August 19, 2022

Dish TV reported a net profit of Rs. 17.85 crores

Dish TV reported a net profit of Rs. 17.85 crores.

Dish TV India reported a 64.47% drop in net profit to Rs 17.85 crore in June 2022, compared to Rs 50.24 crore in the previous quarter ended June 2021.The firm reported a net loss of Rs 2,031.99 crore in March 2022 on account of exceptional items, which included impairment charges. The total revenues stood at Rs 642.70 crore during the quarter as against Rs 751.75 crore in the corresponding quarter. EBITDA (Earnings Before Interest, Tax, Depreciation, and Amortization) was Rs. 323.8 Cr.Profit before exceptional items and tax (PBT) was at Rs 41.8 crore as against a loss of Rs 199.3 crore in Q4 FY22.

The total expenses were at Rs 607.56 crore, down 36.35% as against Rs 954.57 crore in the March 2022 quarter. The exceptional items in the results include Rs 203 crores as an impairment charge on intangible assets under development (impairment charge on goodwill acquired from Videocon) and related advances, Rs 1,616.9 crore and Rs 717.7 crore, respectively. The firm recognised Rs. 116.3 crores as a forex variation loss due to the ongoing crisis in Sri Lanka.

Consumer preferences can have a significant impact on a company’s profitability:

Dish TV’s subscription revenues stood at Rs 574.8 crore, down by 16.1% as against Rs 685.2 crore in Q4 FY2022. The subscription revenues during the quarter were lower compared to Q1 FY2021, mainly due to volatile viewing habits, the emergence of the third wave of the pandemic, high inflation, and conservative spending. The advertisement revenue was at Rs 14.8 crore, up 14.5% as against Rs 12.9 crore. The revenue from ‘Additional marketing, promotional fees and bandwidth charges’ was at Rs 39 crore as against Rs 36.2 crore in the previous quarter.

Pay-TV consumer sentiment has been fluctuating between being pampered on content and sometimes being prudent with it. Consumers have been pickier than ever. They are often moving between linear and streaming content, and as a result, restarting their subscriptions less regularly. Dish TV customers’ changing tastes and preferences are working towards leveraging these emerging trends. The net pay-TV subscribers decreased by 257,000 in the June 2022 quarter, compared to a net decrease of 67,000 in the June 2021 quarter. The company closed the quarter with 9.99 million subscribers, including 7.79 million DISH TV subscribers and 2.20 million SLING TV subscribers. The retail wireless net subscribers decreased by 210,000 in the June 2022 quarter, compared to a net decrease of 201,000 in June 2021 and with 7.87 million retail wireless subscribers.

Valuations:

The EPS was Rs. 10.2 for the June 2022 quarter. The ROCE was at 24.9%, whereas the ROE was at 41.1%. The EBITDA stood at 1.49x for Q1 FY23. The price to book value was at 2.25x. The price to earnings ratio was at 2.87x, while the 5 year P/E was at -1.45x for Dish TV India. The return on assets was at 9.50% for the same quarter. The shares of Dish TV India Ltd on Friday settled at Rs 11.70 on the BSE, up 0.70% from the previous close.

, , , , 0 Comment
Read More
Dalmia Bharat Reports Disappointing Q3 Results, Sees Limited Short-Term Growth
Business, Equities, Markets, Research, Research Reports - August 19, 2022

JK Cement to report a net profit of Rs. 163 crores.

JK Cement to report a net profit of Rs. 163 crores.

The company has reported sales of Rs. 2270 crores during the period ended June 2022, as compared to Rs. 2351 crores during the period ended March 2022. The company has posted a net profit of Rs. 163 crores for the period ended June 30, 2022, as against a net profit of Rs. 201 crores for the period ended March 31, 2022. The company has an EPS of Rs. 21.06 for the period ended June 30, 2022 as compared to Rs. 26.03 for the period ended March 31, 2022. The margins are at 17.7% in Q1 FY23 versus 23.5% in Q1 FY22.

Margin expansion at a low cost:

Grey cement volume fell 10% QoQ to 0.31 Cr. MT. The total sales stood at 86% vs. 75% YoY. The volume of putty increased 38% year on year to 5 lakhs. With a QoQ increase in the sales share of putty, blended Net Sales Realization (NSR) firmed up 6% QoQ and rose 7% YOY. The total Opex was up a modest 4% QoQ, mainly on a loss in grey cement and on lower fuel inflation. Thus, blended unitary EBITDA rebounded 16% QoQ to INR 1,101 per MT. The margin for both grey and white segments expanded by 100/250bps QoQ to 17/20% and 20%, respectively, implying EBITDA of INR 900/MT. The UAE subsidiary’s revenue went up 28% YoY to INR 100Cr. As JK Cement split the useful life of its cement power plants into 15-20 year periods, depreciation expense went up 16% QoQ.

 In Q1FY23, healthy pricing recovery in the northern regions, subdued fuel cost inflation, and low cost inventory benefits increased blended unitary EBITDA by 16% QoQ to INR 1,101 per MT as margins in both the grey and putty segments rebounded. While consolidated revenue rose 32% year over year, EBITDA came in flat. JKCE’s central expansion of 4 million MT is on track by Q4FY23. The company plans to further add 6 million MT of grey cement capacity in the central and northern regions by the end of FY25 to brace its distribution reach.

Valuations:

 The stock P/E for JK cement is at 32.5x. With a five-year P/E of 24.8x, the EPS stood at Rs. 85.1. The return on capital employed was 16.6% and the return on equity was 17.4%. The EBITDA was recorded at 15.4x. The ROA was at 6.57% and the price to book ratio was at 4.90x. The scrip closed at Rs. 2736, up by 1.36%.

, , , , 0 Comment
Read More
Jindal Steel & Power Q1 FY26: Profits Surge on Operational Gains and Strategic Growth
Business, Equities, Research - August 18, 2022

Shares of Hindalco tanked even after good results.

Shares of Hindalco tanked even after good results.

Hindalco reported an all-time high quarterly consolidated net profit for June 2022 at 4,119 crores, up 48% from the year-ago quarter of Rs.2784 crores. Its consolidated revenue rose to 58,018 crores as against 41,358 crores, up 40% YoY. The company reported an all-time high EBITDA of 8,640 crores, which was up 27% from the year ago quarter of 6,790 crores. Meanwhile, its net debt to EBITDA remained strong at 1.40x in Q1 FY23 compared to 2.36x in Q1 FY22.

The main reason for the downtrend

India’s aluminum cost increase of 17% from quarter to quarter was offset in the past quarter. Many investors expect the cumulative impact of inflation to show in Q2 FY23 EBITDA for the aluminium business. The net debt also increased by Rs. 3100 crores from quarter to quarter to Rs. 42200 crores. The stress is on account of compressing scrap, the impending housing sector downturn, and recent Ball Corp with the inflation-weakening demand for cans in North America.

The high margins and significant release of working capital as a result of falling aluminum prices would generate cash flow for Novelis in FY23.While India’s operation’s earnings would be under stress in the near term due to a fall in LME (London Metal Exchange) and high energy costs. We expect it to recover in Q3Y22 and onwards on the back of the restoration of coal supplies by Coal India NSE 0.14 % and stable LME.

The company believed the results were driven by an excellent performance by Novelis and strong performances by Aluminium Downstream and Copper businesses, supported by operational efficiencies and higher volumes. FuThe EBITDA and EBITDA per ton were high, mainly due to higher product pricing, favourable product mix, and recycling benefits. Seeing ahead, the main focus is on riding all market cycles with a greener, stronger, smarter approach.

The performance was backed by strong operational efficiencies and preemptive sourcing of critical raw materials, thus ensuring stable operations and higher margins. The business model supports their position as an integrated aluminium producer with the best EBITDA margins.

After delivering record profitability in the fourth quarter, they have delivered an even stronger first quarter despite rising input costs and inflationary pressures. The performance was because of operational efficiencies and cost-efficient sourcing of critical raw materials.

Valuations:

The EPS was at Rs.67.0 for June 2022. The Return on capital employed was at 16.2% and Return on Equity reported was at 18.5%. EVEBITDA stood at 4.57x for Q1 FY23 quarter. Price to book value was at 1.26x, whereas Return on Asset was at 6.52%. The shares of Hindalco were trading at Rs.435 down by 0.90% on Thursday.

, , , 0 Comment
Read More
Hindalco Industries plans to invest Rs. 15,000 crore in Madhya Pradesh
Business, Equities, Result Updates - August 18, 2022

Gujarat Alkalies clocked a net profit of Rs. 220 Cr. in Q1 FY23.

Gujarat Alkalies clocked a net profit of Rs. 220 Cr. in Q1 FY23.

Gujarat Alkalies has reported a total income of Rs. 1134.22 crores during the period ended June 30, 2022 as compared to Rs. 1148.47 crores during the period ended March 31, 2022. The company has posted a net profit or (loss) of Rs. 190.87 crores for the period ended June 30, 2022 as against a net profit or (loss) of Rs. 220.68 crores for the period ended March 31, 2022. They have an EPS of Rs. 25.99 for the period ended June 30, 2022 as compared to Rs. 30.05 for the period ended March 31, 2022.

New partnerships to create new opportunities:

The management is optimistic about their future. The main reason for clocking such good numbers was the market conditions. As far as the caustic soda price is concerned, whether local or international, they think that the price will remain stable, especially due to the demand in the aluminium sector. They have also set up a bio-ethanol plant. Gujarat Alkalies and Chemicals (GACL) has collaborated with NTPC Renewable Energy (NTPC REL) for renewable energy and green chemicals. The Memorandum of Understanding (MoU) is for expanding business opportunities in the areas of sourcing of renewable power to the extent of about 100 MW and jointly working on synthesising green chemicals such as methanol and ammonia for captive use by GACL.

This is a novel initiative between leading CPSE and state government-sponsored companies to support the country’s commitment to achieve renewable energy targets and reduce greenhouse emissions. NTPC REL is a wholly owned subsidiary of NTPC and is incorporated to develop renewable energy projects and parks, including various developments of various green hydrogen energy solutions and battery energy storage solutions in a focused manner.

The plant will be using corn/broken rice as feedstock with eco-friendly technology and will produce 500 KLD of bio ethanol, which will be used for blending in petrol. As by-products from this plant, 135 KTPA of protein-rich animal feed and 16.50 KTPA of corn oil while using corn as feedstock are also expected to be produced.

Valuations:

The stock price to earnings is at 9.16. The 5 year P/E ratio is 9.5 and 3 year P/E ratio is 5.25.The return on capital employed is at 13.5%. The EPS stood at Rs.98.5. Gujarat Alkalies Ltd has an EBITDA multiple of 5.37.The shares of GACL were up by 5.70% to close at Rs. 891 on Wednesday, August 17, 2022.

, , , , 0 Comment
Read More
India, Singapore Sign Landmark Green Shipping & Aviation Pacts
Business, Equities, Markets, Result Updates - August 17, 2022

Trident Industries' net profit stands at Rs. 129.35 crores.

Trident Industries’ net profit stands at Rs. 129.35 crores.

Trident’s net profit dropped 37.45% to Rs 129.35 crore in Q1 FY23 as against Rs 206.81 crore recorded in Q1 FY22. The revenue from operations surged 13.32% to Rs 1,679.9 crore in the quarter ended June 2022 from Rs 1,482.38 crore reported in June 2021. The company’s PBT stood at Rs 172.39 crore in the first quarter, down 37.22% as compared to Rs 274.6 crore posted in the Q1FY22.

The total expenses increased by 24.94% YoY to Rs 1,512.63 crore in Q1 FY23. The cost of raw materials was up by 47.32% to Rs 981.47 crore, while employee benefits expenses declined 7.97% to Rs 161.55 crore in Q1 FY23 over Q1 FY22.

Way forward for the company.

The company’s revenue from the textiles division was at Rs 1,356.46 crore and revenue from the paper and chemicals division was at Rs 323.55 crore in the current June quarter. The operating margin declined to 18.96% in June 2022 as against the 29.37% reported in June 2021. In Q1 FY23, the net profit margin was 10.24%, down from 18.52% in Q1 FY22. Almost 48% of the revenue was contributed by the bath and bed linen segment. 33% was contributed by the yarn segment, and the contribution of the paper segment has also increased from 14% to 19% in the current quarter.

Trident will capitalize on recent growing retail trends, both online and offline. The company believes it can reach a 12% bottom line by 2025, making them a national brand. To make the company robust and organized, they are working to simplify and automate processes. The firm aims to unlock long-term growth through improved return on ratios through capital allocation strategies. while expanding their business in organic and inorganic ways. They intend to generate synergy and explore business opportunities. With the help of brand building, e-commerce, product development, and exploring new market opportunities, they have a large scope of improvement.

They intend to expand their manufacturing capacities for yarns by adding 98,496 spindles, which has an existing capacity of 5.89 million spindles used at a capacity utilisation of 90% and also adding a sheeting capacity of 70,000 meters per day and 16.3 MW. The total cost of the addition of all these capacities will be INR 1377 crores and will be completed by September 2023. The mode of financing of all these projects will be through Debt & Equity. This will result in an increased competitive advantage for the company and will help to meet increased demand. The Capex plans will help to leverage business expertise and capture business synergies.

Valuations:

The net debt/equity ratio of the company is 0.34.The stock price to earnings is at 25.1 times. While the 5 year and 3 year P/E ratios are 11.1 times and 9.61 times, respectively,The return on capital employed is 23.4%. The EPS stood at Rs.1.48. Trident LTD has an EBITDA multiple of 14.4 times. The shares of Trident were up by 1.74% to close at Rs 37.9 on Wednesday, August 17, 2022.

, , , , 0 Comment
Read More
 Road to Progress: Union Budget 2025 to Accelerate India's Infrastructure Growth
Equities, Markets, Result Updates - August 17, 2022

 Mazagoan Dock profit to soar at new heights

 Mazagoan Dock profit to soar at new heights.

Mazagon Dock Shipbuilders soared 7.49% to Rs 304.15 after net profit increased 121.24% to Rs 224.78 crore with an 83.68% increase in net sales to Rs 2230.32 crore in June 2022 compared to June 2021. The company’s PAT rose 41.36% and net sales increased 59.72% QOQ. The PBT was recorded at Rs 289.97 crore in Q1 June 2022, up 59.32% QOQ and up 108% YOY. The EBITDA stood at Rs 310 crore, growing by 96% over the same quarter last year.

Total expenses increased by 77.6% year on year to Rs 2056.64 crore in Q1 FY23.The cost of raw material consumed stood at Rs 1334.97 crore (up 122.3% YoY) and employee expenses stood at Rs 181.75 crore (up 1.9% YoY). The company has a 45,000-crore order book, which includes Rs. 15000 Cr from the P15B and P15A destroyers, as well as a Rs. 25-crore order book for the P17A Frigate.

The government to sell 10% in an OFS:

The government is planning to sell up to a 10% stake in the company. An application to this effect may soon be put in place. The government holds 84.83% of the firm. At current valuations, the sale of a 10% stake may fetch the government around 570 crore. The stake sale could be done through the offer for sale (OFS) route.

The company is building two submarines in collaboration with the French Naval Group. They launched the sixth Scorpene submarine of Project-75, “Vagsheer”. It also launched the fourth P15B-Visakhapatnam class Guided Missile Destroyer, namely ‘Surat’, and the second P17A Nilgiri Class Stealth Frigate, namely ‘Udaygiri’, in May. Mazagon has also pipelined other products for now. At the end of August, they will deliver a destroyer, which is 8,500 CR, and a fully tested submarine. Mazgoan has the highest revenue compared to other listed peers. With the initiatives taken by the Prime Minister of the in-house defence mechanism, we believe the firm to have huge potential and give high returns to its investors.

Valuations:

The EPS was at Rs.35.2 in June 2021 and ROA was at 2.22%. The ROE and ROCE are at 19.1% and 25.4%. The EBITDA is -4.91 times for the firm. The P/E ratio is at 9.09 times, while 5 years ago it was at 8.24 times. The company is almost debt free, with no long-term borrowings. The stock was trading at Rs.320, up by 2.73% on Tuesday.

, , , 0 Comment
Read More