Britannia - Result Analysis Q1 FY20-21

Britannia - Result Analysis Q1 FY20-21

CMP:  3,784 (As on 17-07-2020)

 

Total revenue from operations 3,421 Cr 

2,700 Cr (26.71%)  YoY | 2,868 Cr (19.27%)  QoQ 

 

Year ending revenue: 11,600 Cr Vs. 11,055 Cr (4.94%)

Net Profit of 542.7 Cr 

248.7 Cr (118.52%) YoY 372.3 Cr (45.69%) QoQ 

 

Year ending Net profit: 1,394 Cr Vs. 1,155 Cr (20.69%)

EPS (in Rs.) 22.69

10.44 YoY |15.58 QoQ 

 

Year ending EPS: 58.34 Vs. 48.24

View: Result is overall good. YoY revenue and QoQ revenue increased and profit significantly increased in both the quarter due to improved material consumption ratio.     

Business Updates & Highlights:

Q4FY21 EBITDA was around INR 716.8 Cr Vs. 394.6 Cr in Q1FY21 Vs. 454.1 Cr in QoQ therefore up by 81.7% in YoY and up by 57.7% in QoQ. EBITDA margin is around 21.1% Vs. 14.7% in YoY Vs. 16.1% in QoQ. 

Financial

ROE and ROCE is around INR 33% and 37% respectively and book value per share is around INR 184 and share is currently trading at 20.6x of its book value. Company is currently trading at annualized PE of 55 which is fair as per Industry benchmark. Promoter holding is around 50.6% in the company which is strong and stable.  FIIs, insurance cos and mutual fund hold around 14.7%, 7.7% and 5% in the company.  Company is very strong operating cash flow and further liquidity position is also very sound in the company.

Position: Share support price is INR 3,560. Long term investor should continue with the company and any correction give good opportunity to add. 

Share View: Share price high 3,890 (52 week) and now 3,780. Britannia Industries is one of India’s leading food companies with a 100 year legacy and annual revenues in excess of Rs. 9000 Cr. Britannia is among the most trusted food brands, and manufactures India’s favorite brands like Good Day, Tiger, NutriChoice, Milk Bikis and Marie Gold which are household names in India. Britannia’s product portfolio includes Biscuits, Bread, Cakes, Rusk, and Dairy products including Cheese, Beverages, Milk and Yoghurt. Britannia is a brand which many generations of Indians have grown up with and brands are cherished and loved in India and the world over.

Opportunities: On the cost front, moderate inflation in the prices of key raw materials and expect the prices to be stable going forward given the positive outlook on monsoon & harvest. Given the dynamic nature of the pandemic & associated uncertainty, company were quick to resort to cost efficiencies through extraction of supply chain efficiencies, reduction in wastages and fixed costs leverage. Despite Covid – 19 outbreak company were successfully achieved and improve the shape of business and record a massive 670 bps increase in operating profit during the quarter. During this period, company launched ‘Winkin Cow Lassi’ & a Rs. 5 Layer Cake pack to expand the reach. All the adjacent businesses too delivered a healthy profitable growth. The company is now studying the impact of the virus on short-term and long-term changes in consumer preferences and distribution models

Risk: Valuation is bit expensive and share reached at all time high. Q2 and FY21 Covid -19 outbreak impact can’t be discounted. As compare to FY20 Vs. FY19 topline is slightly up and poor growth. 

Disclaimer: Views are shared based on market research and study and personal in nature. Others can take the different view and opinions. Please do the thoroughly study before enter or exit the shares.

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Sources: Various publications

Disclaimer: The information provided herein is based on publicly available information and other sources believed to be reliable, but involve uncertainties that could cause actual events to differ materially from those expressed or implied in such statements. The document is given for general and information purpose and is neither an investment advice nor an offer to sell nor a solicitation. While due care has been exercised while preparing this document, we do not warrant the completeness or accuracy of the information. We will not accept any liability arising from the use of this material. The recipient of this material should rely on their investigations and take their own professional advice.

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Mindtree Ltd. Result Analysis Q1 FY20-21

Mindtree Ltd. Result Analysis Q1 FY20-21

Mindtree Limited is an Indian multinational information technology and outsourcing company headquartered in Bangalore, India and New Jersey, USA. It part of the Larsen & Toubro group. Founded in 1999, the company employs approximately 21,991 employees with an annual revenue of Rs 7839.9 crore (US$1.1 billion)

Net Sales at Rs 1,908.80 crore in June 2020 up 4.07% from Rs. 1,834.20 crore in June 2019.

Quarterly Net Profit at Rs. 213.00 crore in June 2020 up 129.77% from Rs. 92.70 crore in June 2019.

EBITDA stands at Rs. 362.60 crore in June 2020 up 75.93% from Rs. 206.10 crore in June 2019.

Mindtree EPS has increased to Rs. 12.94 in June 2020 from Rs. 5.64 in June 2019.

Mid-tier IT company, Mindtree, on posted a 129.8 per cent year-on-year (YoY) growth in its consolidated net profit at Rs 213 crore for the quarter ended June 2020 (Q1FY20-21). 

On a sequential basis, the numbers grew 3.3 %

The company's revenue came in at Rs 1,908.8 crore, up 4.1 per cent YoY and down 6.9 per cent QoQ. 

In US dollar terms, revenue stood at $253.2 million, down 4.1 per cent YoY and 9 per cent QoQ. 

Net profit came in at $28.3 million, up 0.1 per cent QoQ and 111.7 per cent YoY. 

Company added 6 new clients during the quarter and it had 292 active clients as of June 30. 

Analysis: Strong backing (promoter) as L&T. This stock can be purchased in mid IT segment.

Disclaimer: The information provided herein is based on publicly available information and other sources believed to be reliable, but involve uncertainties that could cause actual events to differ materially from those expressed or implied in such statements. The document is given for general and information purpose and is neither an investment advice nor an offer to sell nor a solicitation. While due care has been exercised while preparing this document, we do not warrant the completeness or accuracy of the information. We will not accept any liability arising from the use of this material. The recipient of this material should rely on their investigations and take their own professional advice.

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Delta Corp Result Analysis Q1 FY20-21

Delta Corp Result Analysis Q1 FY20-21

Delta Corp Limited, previously known as Arrow Webtex Ltd., is an Indian gaming and hospitality corporation that owns and operates casinos and hotels under several brands. It is India’s only listed company engaged in casino gaming.

Revenue down 74.1% at Rs 48.3 crore

Net Sales at Rs 0.03 crore in June 2020 down 99.97% from Rs. 119.91 crore in June 2019.

Quarterly Net Profit at Rs. 42.08 crore in June 2020 down 3.86% from Rs. 43.77 crore in June 2019.

EBITDA stands negative at Rs. 7.49 crore in June 2020 down 110.97% from Rs. 68.27 crore in June 2019.

No revenue reported for gaming and hospitality operations

Online gaming segment revenue up 60% at Rs 57 crore

Adda52 has seen a revenue surge and growth at a faster pace

Company has paid fees of license of Rs 25.3 crore in current quarter and has made representation to Goa Government for the waiver of the casino license fees

Due to the COVID–19 pandemic and in line with the directives issued by the Government of Goa, all the Casinos and Hospitality businesses have not been operating during the quarter. The Company is required to pay an annual recurring license fee upfront for operating its casinos. The Company has therefore provided a proportionate charge of license fees of Rs 9.97 Crores for the quarter, as required statutorily. However, the Company and the entire casino industry in Goa have made a representation to the Government of Goa, seeking a waiver / reduction / proportionate payment mechanism for the period of shut down. Due to the pandemic situation, the stress on the operations and the representations made, the management is hopeful that the Government of Goa may consider its request, favourably. In such a situation, the provision of license fees made in the books may not be payable in full or in part, as it depends upon the directives to be issued by the Government of Goa. The said License Fees is only provided for and the actual payment for the same has not taken place. 

Impact: Result is in line with the expecation due to business disrupted on account of Covid-19, Q2FY21 will also be down. The good thing is focusing and diversified online gaming and increase their subscriber base which will be good in future once Casino operational both business vertical offline and online will be good revenue generation onward.

Disclaimer: The information provided herein is based on publicly available information and other sources believed to be reliable, but involve uncertainties that could cause actual events to differ materially from those expressed or implied in such statements. The document is given for general and information purpose and is neither an investment advice nor an offer to sell nor a solicitation. While due care has been exercised while preparing this document, we do not warrant the completeness or accuracy of the information. We will not accept any liability arising from the use of this material. The recipient of this material should rely on their investigations and take their own professional advice.

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L&T Finance Holding Result Analysis Q1 FY20-21

L&T Finance Holding Result Analysis Q1 FY20-21

CMP Rs 61.45 (As on 17-07-2020 at 03:00 PM) 

Net Interest Income down 15.7% at Rs 1,408.9 crore (Est Rs 1,347 crore) 

Net profit down 73% at Rs 148.3 crore (Est Rs 242 crore) 

Incremental provision of Rs 577 crore out of which for Covid-19 it is Rs 277 crore, in current quarter 

Exceptional gain of Rs 225.6 crore on the divestment of entire stake in the subsidiary company, L&T Capital Market.

Reduction in Moratorium on Retail lending book at 44% versus 79% QoQ. Overall moratorium for Infrastructure finance, IDF and Real Estate borrowers remained close to 40%. 

Disbursements momentum expected to pick up especially in rural portfolio Raised Rs 3,200 crore till July 15

Company has  reported PAT of Rs 147 cr. However, excluding the Rs 225 cr one-time gain on sale of the wealth management business to IIFLWAM, the company reported net loss of Rs 78 (vs our PAT estimate of Rs 180 cr)

Net Interest Income declined 16% YoY to Rs 1410 cr driven by the drag due to excess liquidity (2% above our est. of Rs 1380 cr)

Finance cost grew 3% YoY to Rs 1980cr (4% above our est. of Rs 1910 cr)

Opex declined 6% YoY and 21% QoQ to Rs 420 cr (18% below our est. of Rs 510 cr).

PPoP declined 24% YoY to Rs 1000 cr (8% above our est. of Rs 930 cr)

Moratorium rate in retail lending declined from 79% in March to 44% in June

GNPL ratio down ~10bp to 5.24%. PCR up from 59% to 69% QoQ.

Loan book largely flat both QoQ and YoY at Rs 99000 cr

However, provisions at Rs 1120 cr were above our estimate of Rs 700 cr. In our view, the company may have used the Rs 225 cr one-off gains to enhance provisions on the balance sheet.

Impact and Analysis: Results are below expections, may be due to Impact of COVID 19 and lock down in Q1, moreover this is a NBFC and we have seen presusure on entire banking and NBFC space. We have seen good correction in this stock, hence it can be purchased as a portfolio stock for long term. We hould not forget that it has a backing (Promoter) as L&T.

Disclaimer: The information provided herein is based on publicly available information and other sources believed to be reliable, but involve uncertainties that could cause actual events to differ materially from those expressed or implied in such statements. The document is given for general and information purpose and is neither an investment advice nor an offer to sell nor a solicitation. While due care has been exercised while preparing this document, we do not warrant the completeness or accuracy of the information. We will not accept any liability arising from the use of this material. The recipient of this material should rely on their investigations and take their own professional advice.

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Infosys Result Analysis Q1 FY20-21

Infosys Result Analysis Q1 FY20-21

Infosys Ltd.’s profit dropped even as deal wins and cost-cutting measures anchored the company in a quarter marred with challenges due to Covid-19. Net profit fell 1.5% sequentially to Rs 4,272 crore in the quarter ended June, according to its exchange filing. 

Revenue rose 1.7% over the previous quarter to Rs 23,665 crore—higher than the estimated Rs 22,957 crore. Dollar revenue fell 2.4% to Rs 3,121 crore. Operating profit rose 8.9% to Rs 5,365 crore. Margin expanded to 22.7% from 21.2%.

The April-June period was the first full quarter that captured the impact of business uncertainty from the pandemic. The world’s biggest lockdown to contain the novel virus froze all economic activity, barring essential services. That led to a rise in costs for IT companies as most of their employees worked from home.

Infosys was able to offset that impact by winning new contracts and implementing cost cuts to maintain its revenue and operational profitability. Large deal wins during the quarter stood at $1.74 billion—higher than the $1.65 billion worth of deals it won in the previous three months. The depreciation of the rupee also helped.

Segment wise performance QoQ

BFSI - 2%

Communications - 4.9%

Retail - (6.4%)

Energy- 1.2%

Mfg - (4.5%)

Hi-Tech - 12.7%

CMP Rs 901 (As on 17-07-2020 at 02:51 PM)

Operating margin for FY 21 to be in the range of 21%-23%
TCV($ MN) came at $ 1744 Mn vs expectation of $ 0 Mn, QoQ $ 1646 Mn, YoY $ 2714 Mn

Revenue growth in CC terms QoQ came at -2% vs expectation of -5.1%, QoQ -0.8%, YoY 2.8%

Dollar revenue came at $ 3121 Mn,(-2.4% QoQ, -0.3% YoY) vs expectation of $ 3033 Mn, QoQ $ 3197 Mn, YoY $ 3131 Mn

Net sales came at Rs. 23665 Cr (1.7% QoQ, 8.5% YoY) vs expectation of Rs. 22957 Cr, QoQ Rs. 23267 Cr, YoY Rs. 21803 Cr

EBIT came at Rs. 5317 Cr (7.9% QoQ, 20% YoY) vs expectation of Rs. 4767.8 Cr, QoQ Rs. 4927 Cr, YoY Rs. 4431 Cr

EBIT Margin came at 22.5% vs expectation of 20.8%, QoQ 21.2%, YoY 20.3%
Adj. PAT came at Rs. 4233 Cr vs expectation of Rs. 3941.1 Cr, QoQ Rs. 4366 Cr, YoY Rs. 3798 Cr

Quarter EPS is Rs. 9.9

Stock is trading at P/E of 21.8x FY21E EPS

Managment comment

Infosys remains optimistic. “Our confidence and visibility for the rest of the year is improving driven by our Q1 performance and large deal wins,” said Chief Executive Officer Salil Parekh in the media statement.

Impact: Result is above expectation due to various cost cutting mesaure bottomline and margin improved and this can continue in next two quarter as well. Keep hold for long term investors.

Analysis: Good company for long term Investment, Buying can be initiated in range of Rs 800 to Rs 850. 

Disclaimer: The information provided herein is based on publicly available information and other sources believed to be reliable, but involve uncertainties that could cause actual events to differ materially from those expressed or implied in such statements. The document is given for general and information purpose and is neither an investment advice nor an offer to sell nor a solicitation. While due care has been exercised while preparing this document, we do not warrant the completeness or accuracy of the information. We will not accept any liability arising from the use of this material. The recipient of this material should rely on their investigations and take their own professional advice.

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Wipro Result Analysis Q1 FY20-21

Wipro Result Analysis Q1 FY20-21

Net profit rose 2.8% over the previous quarter to Rs 2,411 crore in three months ended in June, according to its exchange filing. 

Total revenue fell 5.3% over the previous quarter to Rs 14,922 crore—higher than the estimated Rs 14,414 crore. 

Revenue from IT services fell 7.3% to $1,922 million. 

Operating profit rose 1.3% to Rs 2,573 crore. 

IT services margin expanded to 19% from 16.1% earlier.

Wipro, however, was able to improve its operational metrics despite the decline in revenue mainly on the back of lower employee costs which is its largest expense. 

Employee expenses for Wipro declined 6.1% sequentially to Rs 8,026 crore.

*Segment wise revenue performance*QoQ

BFSI - (5%)

Consumer business - (10%)

Healthcare - (4%)

Technology - 1%

Engineering - (1%)

Management commentary

Jatin Dalal, Chief Financial Officer, Wipro said, “We expanded the margins during the quarter, despite lower revenues, on the back of solid execution of several operational improvements and rupee depreciation. We also continued to sustain robust cash generation with operating cash flows at 174.9 per cent of net income.”

IT Services revenue drops

IT services segment revenue for the quarter came in at $1,921.6 million, a decrease of 5.7 per cent YoY. Non-GAAP constant currency IT Services Segment Revenue decreased by 4.4 per cent YoY

Margins expand

IT Services operating margin for the quarter was at 19 per cent, logging an expansion of 0.6 per cent YoY.

Earnings per share (EPS) rises

Earnings Per Share for the quarter was at Rs 4.20 ($0.061 ), an increase of 5.7 per cent YoY.

Hiring up

The company said there was a gross hire of over 7,000 employees for the quarter.

Customer addition

On a YoY basis, the company added 5 customers in the revenue bucket of more than $20 million.

Impact: Result is overall in line with the expectation and improved from YoY despite Covid-19 outbreak. Hold for long term investor and stay with the company.

Disclaimer: The information provided herein is based on publicly available information and other sources believed to be reliable, but involve uncertainties that could cause actual events to differ materially from those expressed or implied in such statements. The document is given for general and information purpose and is neither an investment advice nor an offer to sell nor a solicitation. While due care has been exercised while preparing this document, we do not warrant the completeness or accuracy of the information. We will not accept any liability arising from the use of this material. The recipient of this material should rely on their investigations and take their own professional advice.

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Bajaj Consumer Care Ltd. Result Analysis Q1 FY20-21

Bajaj Consumer Care Ltd. Result Analysis Q1 FY20-21

CMP:  182 (As on 17-07-2020 at 02:00 PM)

 

Total revenue from operations 197.5 Cr 

240.7 Cr (17.91%)  YoY | 178.7 Cr (6.17%)  QoQ 

 

Year ending revenue: 852 Cr Vs. 918 Cr (7.14%)

Net Profit of 54.2 Cr 

56.7 Cr (-4.42%) YoY 23.2 Cr (132.79%) QoQ 

 

Year ending Net profit: 185 Cr Vs. 222 Cr (16.67%)

EPS (in Rs.) 3.68

3.84 YoY |1.58 QoQ 

 

Year ending EPS: 12.52 Vs. 15.02

View: Strong result and exceptionally well. Despite Covid-19 outbreak YoY revenue declined and but profit slightly down. Significantly improved from QoQ performance for EBITDA, margin, net profit.    

Business Updates & Highlights:

Q4FY21 EBITDA was around INR 58.2 Cr Vs. 71.9 Cr in Q1FY21 Vs. 25 Cr in QoQ therefore declined by 19% in YoY and up by 57% in QoQ. EBITDA margin is around 30.4% Vs. 30.9% in YoY Vs. 14.85% in QoQ. 

Gross Margin in Q4FY21 is around 63.6%. Market share is around 10.2% in Hair oil segment which is consistent and increased by 10 bps in this quarter. 

Company business was not operating in first 15 days of April 2020. Next 15 days of April 80% operational, May 20 – 95% operational and June 20 – 100% operational. 

Launched new Products

Bajaj Nomarks Hand Sanitizer was launched in Q1FY21. Bajaj Multipurpose Sanitizer (5 Litre Pack) launched in June to cater to Institution requirements

Premium Hair Oil launched through E-commerce Platforms. Anti Greying Hair Oil with Natural Ingredients known for stopping greying

Financial

ROE and ROCE is around INR 47% and 58% respectively and book value per share is around INR 32 and share is currently trading at 5.7x of its book value. Company is currently trading at annualized PE of 13 which is very fair as per Industry benchmark. Promoter holding is around 38% in the company which is low but stable.  FIIs and mutual fund hold around 25.8% and 18.2% in the company which is decreased by around 2% by FIIs and 3% by mutual fund. The good thing is company has very small debt. 

Position: Share support price is INR 152. Share has bounced back in short term and long term investor may continue with the company with target price of INR 250.

Share View: Share price high 315 (52 week) and now 180. Bajaj Consumer Care Ltd. is one of the leading player in Hair oil category with brands like Bajaj Almond Drops Hair oil, Bajaj Brahmi Amla Hair Oil, Bajaj Amla Hair oil and Bajaj Jasmine Hair oil. Our flagship Brand Bajaj Almond Drops Hair oil is the No. 1* hair oil in Indian market with Premium positioning and commands one of the highest per unit price in the industry.

Opportunities: Valuation is very reasonable, very low debt. Strong hold by mutual fund and FIIs. Small equity base. Consistent market share for few quarter despite stiff competition from rival Godrej, Dabur etc. Bajaj Almond is still retain no. 1 position in Indian market for Hair oil segment. Launching of new products and sanitizer as per the current market and demand. Strong distribution network in all over country with more than 24 lacs retail outlets in country. 

Risk: Company has successfully managed and pick up growth in May and June 2020 despite Covid – 19 outbreaks but still Covid-19 factor cant be discounted and since every states follow strict guidelines and procedure next two quarter can be very challenging. 

Disclaimer: The information provided herein is based on publicly available information and other sources believed to be reliable, but involve uncertainties that could cause actual events to differ materially from those expressed or implied in such statements. The document is given for general and information purpose and is neither an investment advice nor an offer to sell nor a solicitation. While due care has been exercised while preparing this document, we do not warrant the completeness or accuracy of the information. We will not accept any liability arising from the use of this material. The recipient of this material should rely on their investigations and take their own professional advice.

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Rossari Biotech Ltd IPO Analysis

Rossari Biotech Ltd IPO Analysis

Rossari Biotech Ltd incorporated in 2009 which is a manufacturer of textiles specialty chemicals. It provides customized solutions to the apparel, animal & poultry feed, and FMCG industries by offering a diversified product portfolio. Rossari Biotech operates in 18 countries including India, Bangladesh, Vietnam, and Mauritius. It is the largest textile specialty chemical manufacturer in India. Their business can be classified into following three categories: 

1. Textile Speciallity Chemical
2. Animal Health & Nutrition Products
3. Home Personal care & Performance Chemicals.

Company is having 1948 different products range under above mentioned categories.

Most of the products of the company are manufactured in-house. It has a manufacturing unit located at Silvassa, Dadra & Nagar Haveli with an installed capacity of 100,000 MTPA. The company is also setting up a manufacturing unit at Dahej in Gujarat with an installed capacity of 132,500 MTPA. Rossari Biotech also has two R&D facilities in Silvassa and Mumbai locations to focus on new product development, formulations, and cost competitiveness. It has more than 194 distributors across India and 27 distributors spread in other 17 countries.

Following are Core strengths of Company:

1. Diversified Product Portfolio
2. Well Known Textile specialty chemical manufacturer in India
3. In house Manufacturing unit
4. Strong R&D facility
5. Pan India distribution network.

Objective of the Issue:

1. General Corporate Purpose
2. Funding working capital requirements
3. Repayment or Prepayment of certain indebtness availaed by company. 

   View Point:

In my view this cannot be termed as an IPO it is purely OFS. Moreover the IPO price is little over valued and PE is very high. Seeing the current market condition it is recommended to avoid the IPO, however fresh buying can be done after listing of share in market i.e after 23rd July 2020 for long term view. 

As far as long term view is concerned, company is having good R &D and supply chain, moreover PM focusing on Make in India and Local for Vocal, this company will be benefited by this. 

Sources: Various publications

Disclaimer: The information provided herein is based on publicly available information and other sources believed to be reliable, but involve uncertainties that could cause actual events to differ materially from those expressed or implied in such statements. The document is given for general and information purpose and is neither an investment advice nor an offer to sell nor a solicitation. While due care has been exercised while preparing this document, we do not warrant the completeness or accuracy of the information. We will not accept any liability arising from the use of this material. The recipient of this material should rely on their investigations and take their own professional advice.

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