HUL Result and Sector Analysis

HUL Result and Sector Analysis

Sector Analysis:

India’s personal care industry is composed of hair care, bath products, skincare and cosmetics, and oral care. The sector is driven by rising income, rapid urbanization, and celebrity promotions. This industry accounts for 22% of the country’s fast-moving consumer goods (FMCG), which is the term for Consumer Packaged Goods in India. Worldwide This Industry has grown widely since not 2-3 decades but Some of the companies have a long profit-making history for 2 centuries. Today Companies like Johnson & Johnson as well as P&G are among world TOP 30 companies with a profit of around 1 lakh cr. As Gdp/capital of our country rises we may see growth in premium products. Now E-Commerce is playing a big role in this industry. Y-O-Y FMCG product contribution is increasing in E-Com. Out of 10 cr Indian shoppers, 3 cr are FMCG shoppers. Rising upper Middle class of 54 cr in 2022 from currently just 38 cr will be a key trigger for high growth. Indian Upper Middle class would be more than the Population of North America. 

The majority of the companies are for a long time and hence today they are able to distribute more than 50% of profits in Dividends. Indian companies are also growing internationally showing high growth. It can have 1-2 companies from this industry in the portfolio. 

Total MCap by Personal Care Products is around 7.5 Lakh Cr and out of this HUL, Dabur, Godrejcon, Marico are responsible for 80% Mcap or even Sales & profits. 

Hidustan Unilever Ltd.

If You have heard the name of LifeBuoy, Lux, SurfExcel, Rin, Wheel, VIM, Fair&Lovely, Lakme, Ponds, Dove, ClininPlus, Pepsodent, Brooke Bond, Bru, Pure than this all are brands given by HUL. & Now Horlicks and Boost have added in the list. The leader in the Indian personal care products market for 80 years with a market share of around 50% among listed entities. Vast leadership was maintained by Hul even after 70 years of Independence. They were having revenue and Profit of 10000 cr & 1300 cr during 2001 & today able to generate revenue and Profit of 40000 cr & 6700 cr respectively. Growth of around 7% CAGR for 2 decades. HUL was in Top Weightage of NIfty during 1995 today many other companies with the capability of 20% CAGR since the last 2 decades have overtaken the place. The last decade was good and HUL is still able to maintain its place in top 10, consistent performance since long history otherwise 80% TOP companies of 1990 have been replaced today by others. Investors have gained a consistent 15% CAGR return since the last 25 years along with the majority of profit from Dividend as HUL distributes 75% of the profits in Dividends. Almost Debt free company. 

The spread of COVID 19 impacted the business from mid-March, which culminated into scaling down of operations post the national lockdown. Domestic Consumer Growth declined by 9% with a decline of 7% in Underlying Volume Growth. currently operating at about 70% of normative levels. Demand patterns are changing, and we are likely to see an upswing in categories like health, hygiene, and nutrition. Hence Q1 revenue & Profit have grown by 4% and 6% respectively which were as expected as impacted due to lock down. Excluding GSK growth is -7%. Real EPS has grown by -2% despite profit growth of 6% due to increase in equity by 9%. No doubt a wealth creator company. The merger of Glaxo Smith Kline Consumer has been approved which will help Hul reach faster towards 50000 cr landmark revenue. Such in-organic growth could be seen if we have such debt-free companies with good reserves. Many people in this group are holding this company from 500 during 2014 and many are holding since 800. We have been expecting a multi-year rally. Double-digit growth is seen in homecare and Tea business. For the new buyers, we can again add near 1700 as

ROI as per current price would be just 1.5% which is not attractive. Do not buy during the rally. A SIP stock as a wealth creator. 67% UK Promoter Holding while 20% with FII, MF, and Insurance Companies. 

Net profit of India’s largest consumer goods maker rose 7.2% year-on-year to Rs 1,881 crore in the quarter ended June, according to an exchange filing. That compares with the Rs 1,722-crore consensus estimate of analysts tracked by Bloomberg.

Revenue rose 4.4% over last year to Rs 10,560 crore—higher than the estimated 9,880 crore.

Operating profit fell 0.1% to Rs 2,644 crore.

Margin narrowed to 25% from 26.2% earlier.

Segment-Wise Performance

Home Care YoY (2.1%)
Personal care (12%)
Foods & Refreshments 51.7%
Others 55.5%

Dividend declared INR 9.5 per share

According to Sanjiv Mehta, chairman and managing director of HUL, rural is growing a bit faster than urban. “We’ve seen disruptions in the supply chain in the last 10 days due to localised lockdowns, but we should be able to cover up some of the hiccups.”

Impact: Result is overall good and improved despite Covid -19 outbreak. Good stock to ave in portfolio. 

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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Axis Bank Result Analysis Q1 FY2021

Axis Bank Result Analysis Q1 FY2021

It is the 3rd largest private sector Indian bank which offers a wide range of Financial Products. The bank has its HO situated at Mumbai (The Financial Capital of India). It has 4800 Branches with 17801 ATMs. and 4917 cash recyclers across the country (as on 31st March 2020) along with 9 International offices. 

The bank has strong market position in most digital payment products.  It has is the fourth-largest bank in terms of credit cards issuer, spending from debit cards at point of sales terminals and in transactions through mobile, constituting market share of 8%, 12% and 14%,respectively. In terms of forex cards issued, Axis Bank stood at No. 1 position and has 38% market share.

Axis Bank has robust subsidiaries in financing, capital market and asset management businesses. Axis Finance, in which the bank holds 100%stake,clocked 49% CAGR in loan book over FY 14-19 to INR 80.4 bn. Axis AMC registered ~38% growth in AUMs over FY 15-19 to INR 845 bn. 

Net Profit Down 19% On Higher Provisions 

Net profit declined 19% year-on-year to Rs 1,112 crore in the quarter ended June, according to its filing. It reported a net loss of Rs 1,388 crore in the previous quarter ended March. 

The private sector lender made provisions worth Rs 4,416 crore compared with Rs 3,815 crore a year ago. It set aside Rs 773 crore worth of additional provisions toward Covid-19-related impact on the balance sheet. 

Asset quality improved with outstanding gross non-performing assets at Rs 29,560 crore on June 30 compared with Rs 30,234 crore as on March 31. 

Gross NPA fell to 4.72% from 4.86% in the preceding three-month period 

The bank reported fresh slippages worth Rs 2,218 crore compared with Rs 4,798 crore a year earlier. 

Total advances rose 17% year-on-year to Rs 5.79 lakh crore, while total deposits stood at Rs 6.28 lakh crore, up 16% from a year earlier. The growth in advances includes the amount allocated by the bank under the targeted long-term repo operations during the April-June period. 

Impact: Result is in line with the expectation. Gross NPAs reduced in YoY. On Advances and Deposit front both up in YoY.

Analysis: This stock has shown good correction from its peak, buying can be initiated in this stock between Rs 400 to Rs 430 range for price target of Rs 600 plus by end of year. 

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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ACC Ltd Result Analysis Q1 FY2021

ACC Ltd Result Analysis Q1 FY2021

CMP:  1,379 (As on 21-07-2020 @ 15:39)

Total revenue from operations 2,602 Cr 

4,150 Cr (-37.31%)  YoY | 3,502 Cr (-25.71%)  QoQ 

Six month ending revenue: 6,104 Cr Vs. 8,069 Cr (-24.34%)

Net Profit of 270.9 Cr 

455.7 Cr (-40.72%) YoY 323.02 Cr (-16.41%) QoQ 

Six months ending net profit: 594 Cr Vs.802 Cr (-25.69%)

EPS (in Rs.) 14.39

24.20 YoY |17.16 QoQ 

Six months ending EPS: 31.55 Vs. 42.58

View: Average result and in line with the expectation. YoY and QoQ revenue and profit both have declined but margin improved in this quarter. 

Business Updates & Highlights:

Q2FY21 EBITDA was around INR 513.1 Cr Vs. 783.4 Cr in Q2FY20 Vs. 586.1 in Q1FY21 Cr in QoQ therefore declined by 81.7% in YoY and 12.7% in QoQ. EBITDA margin is around 19.7% Vs. 18.9% in YoY Vs. 16.7% in QoQ. EBITDA margin improved in YoY and QoQ.

EBITDA for six month ending 2020 is around INR 1,110 Cr Vs. 1,314 Cr in six month ending 2019. Therefore declined by 15.5% in YoY. EBITDA margin is around 18.1% Vs. 16.2% in 2019

Financial

ROE and ROCE is around INR 12% and 19% respectively and book value per share is around INR 615 and share is currently trading at 2.2x of its book value. Company is currently trading at annualized PE of 24 which is average as per Industry benchmark. Promoter holding is around 54.5% in the company which is strong and stable.  FIIs and mutual fund hold around 8.1% and 11.7% in the company.  Company is very strong operating cash flow for the six month ended June 2020 which was around INR 558 Cr Vs. 413 Cr in June 2019. Liquidity position is also very sound in the company.

Position: Share support price is INR 1,250. Long term investor should continue with the company. 

Share View: Share price high 1,707 (52 week) and now 1,330. ACC Limited (ACC) is a leading player in the Indian building materials space, with a pan-India operational and marketing presence. Synonymous with cement. The management control of company was taken over by Swiss cement major Holcim (now LafargeHolcim) in 2004. ACC operated as subsidiary of Lafarge Holcim. On 1 September 2006. The company is only cement company to get Superbrand status in India

Opportunities: Strong  operating cash flows for the half year ended June 2020. Due to strict cost control measure company margin was also improved in this quarter as compared to YoY and QoQ. Follow high corporate governance model and holding by LafargeHolcim which is World’s largest cement company. Due to Covid-19 outbreak and strictly lockdown in the month of April 2020 the topline impacted in this quarter.  Govt is planning to increase the infra spending and this can be good for long term perspective. 

Risk: Covid-19 outbreak and continuously strong in country and part of some states have further extended the lockdown can further impact for Q3 as well. Real estate slower growth especially for commercial space can also impact the topline in upcoming quarters. Further company has contingent liabilities of around INR 1,147 Cr which appeal is pending in Hon’ble Supreme court against COMPAT.

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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SBI Card– Result Analysis Q1 FY20-21

SBI Card– Result Analysis Q1 FY20-21

CMP: 775 (As on 21-07-2020 @ 15:33) 

Total income from operations at 2,152 Cr  

2,432 Cr (-11.52%)  YoY | 2,068 Cr (4.05%)  QoQ  

 

Year ending revenue: 9,276 Cr Vs. 7,017 Cr (32.11%) 

Net Profit of 393.2 Cr  

83.5 Cr (373.45%) YoY 345.6 Cr (13.91%) QoQ  

  

Year ending Net profit: 1,249 Cr Vs. 863 Cr (44.73%) 

EPS (in Rs.) 4.15 

0.89 YoY | 3.71 QoQ  

  

Year ending EPS: 13.21 Vs. 11.10 

View: Result is average and below expectation. YoY topline contracted but bottom line significantly improved due to operating expenditure declined by more than 27% and impairment losses & bad debts declined by more than 42% in YoY since in previous quarter Q4FY20 Covid-19 Provision was around INR 489 Cr in books of accounts. GNPA improves by 133bps to 1.35% vs 2.68% for Q1 FY20. 

Business Updates & Highlights:

Interest income increased by INR 363 Cr, or 34.6% to INR 1,412 Cr for Q1 FY21 from INR 1,049 Cr for Q1 FY20. 

Income from fees and services at INR 668 Cr for Q1FY21 vs INR 916 Cr for Q1FY20 therefore declined by 27% in YoY.  

Other income at INR 43 Cr for Q1FY21 vs INR 236 Cr for Q1FY20 therefore declined by 81.7%.  

Finance costs decreased by INR 27 Cr, or 9.0% to INR 275 Cr for Q1FY21 from INR 302 Cr for Q1FY20. Total Operating cost decrease by INR 166 Cr, or 15.4% to INR 907 Cr for Q1FY21 from INR 1,073 Cr for Q1FY20. 

Total Balance Sheet size as of June 30, 2020 was INR 24,260 Cr as against INR 25,303 Cr as of March 31, 2020. 

Total Gross Advances (Credit card receivables) as of June 30, 2020 were INR 23,330 Cr, an increase of 9.9 % from INR 21,231 Cr as of June 30, 2019. 

Card-in-force grew by 20% to 1.06 Cr vs 0.88 Cr as of Q1 FY20. Spends at INR 19,085 Crore for Q1 FY21 vs INR 30,174 Cr for Q1 FY20 therefore declined by 36.7%. Market share – Card-in-force at 18.3%; Spends at 19.6% (as of Apr’20) 

The Gross non-performing assets were at 1.35% of gross advances as on June 30, 2020 as against 2.68% as on June 30, 2019. The Provision Coverage Ratio at 68.25% as of June 30, 2020 as against 72.00% as of June 30, 2019 

Cost to Income ratio improved by 635bps to 47.2% vs 53.6% for Q1FY20 

Financial 

ROA and ROAE is around 6.3% and 28.3% respectively therefore declined by 11 bps and 783 bps in YoY and book value per share is around INR 38 share is currently trading at 19.3x of its book value. Debt equity ratio maintained at 2.81 times, consolidated CAR is 24.4% up by 551 bps in YoY.  Company is currently trading at annualized PE of around 46 which is high as per Industry benchmark. Promoter holding (SBI) in the company is around 69.5% which is strong and stable, FIIs and mutual fund hold around 4.6% and 1.6% respectively. Net worth as of June 2020 is INR 5,722 Cr as against 5,413 Cr in March 2020.  

Share View: Share price high 769 (52 week) and now 735. SBI Card was launched in October 1998 by the State Bank of India and GE Capital incorporated as SBI Cards and Payment Services Private Limited (SBICPSL). Today, with over 10 million credit cards Customers Company is the second largest credit card issuer in the country. Company has offices in over 145 cities in India extensive product portfolio, which includes premium, classic, travel and shopping, exclusive and corporate cards, to cater to both individual and corporate needs. 

Share support price is INR 700/640. Long term investor should continue with the company any good correction with opportunity to add for long term.  

Opportunities: 2nd Largest credit card issuer in the country. Focus on Digital Application through video KYC, & e-Sign. Grow online spends through e-comm. Partner API Integration. Despite topline corrected in this quarter company has significantly improved the bottom line for using various costs saving technique eg. Finance cost decreased by more than 9% in this quarter. Strong promoter holding (SBI) and also improved GNPA in this quarter and continuously reducing down 1.35% Vs. 2.68% Vs. 2.01% in YoY and QoQ. INR 4,978 Cr (30%) of sanctioned bank lines unutilized and available for draw down as at Jun’20. Credit ratings Short Term A1+ by Crisil & ICRA. Long term: AAA/stable by Crisil and ICRA. Online retail spends in Q1FY21 was around 56.1% which was good.  

Risk: In this quarter No Covid-19 Provision as compare to previous quarter it was around INR 489 Cr. Further in case of spends category which is also declined by more than 36.7% in YoY and the major impact was seen at Travel agents, Hotels, Airline & Railways which was declined by around 78% in YoY (significant impact) this can be further continue due to Covid-19 impact is currently widening spread in all our the country. New accounts were also declined by more than 66% in QoQ and 64% in YoY due to this the membership fees has declined by more than 30% in YoY and 28% in QoQ.  

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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HDFC Bank – Result Analysis Q1 FY20-21

HDFC Bank – Result Analysis Q1 FY20-21

CMP: 1,136 (As on 20-07-2020 at 12:45 PM)

Total Income at 36,699 Cr

34,324 Cr (6.93%) YoY | 38,287 Cr (-4.11%) QoQ

Year ended 147,068 Cr Vs. 124,107 Cr (18.51%)

Net Profit of 6,927 Cr

5,676 Cr (22.04%) YoY | 7,280 Crs (-4.84%) QoQ

Year ended 27,254 Cr Vs. 22,332 Cr (22.03%)

EPS (in Rs) 12.6

10.3 YoY | 13.2 QoQ

12 months ended EPS: 49.5 Vs. 41.3

Gross NPA 13,773 Cr

11,769 Cr YoY | 12,650 Cr QoQ

Net NPA at 3,280 Cr

3,568 Cr YoY 3,542 Cr QoQ

GNPA(%) 1.36 vs 1.40 YoY 1.26 QoQ

NNPA(%) 0.33 vs 0.43 YoY 0.36 QoQ

Return on asset (%) 0.44 Vs 0.46 YoY 0.49 QoQ

View: Result is above expectation and strong result. YoY total income increased and profit also up. However QoQ total income and profit both have decreased due to other Income impact, other income recorded around INR 4,075 Cr Vs. 6,033 Cr in QoQ. HDFC Bank set aside provisions and contingencies worth INR 3891.5 crore during the first quarter of this fiscal.

Business Updates & Highlights:

The bank did not disclose the proportion of loans under moratorium. The Reserve Bank of India has permitted banks to offer a six-month moratorium on loan repayments.

Net interest income (interest earned less interest expended) for the quarter ended June 30, 2020 grew by 17.8% to INR 15,665.4 crore from INR 13,294.3 crore for the quarter ended June 30, 2019, driven by growth in advances of 20.9%, and a growth in deposits of 24.6%. The net interest margin for the quarter was at 4.3%.

Other income (non-interest revenue) at INR 4,075.3 crore was 20.6% of the net revenues for the quarter ended June 30, 2020 as against INR 4,970.3 crore in the corresponding quarter ended June 30, 2019. ‘Fees & commissions’, which goes into other income of stood at INR 2,230.7 crore compared to INR 3,551.6 crore in the corresponding quarter of the previous year therefore declined by 37.2%.

Provisions and contingencies for the quarter ended June 30, 2020 were INR 3,891.5 crore (consisting of specific loan loss provisions of INR 2,739.8 crore and general provisions and other provisions of INR 1,151.7 crore) as against INR 2,613.7 crore (consisting of specific loan loss provisions of INR 2,248.0 crore and general provisions and other provisions of INR 365.7 crore) for the quarter ended June 30, 2019. Total provisions for the current quarter included contingent provisions of approximately INR 1,000 crore.

Total balance sheet size as of June 30, 2020 was INR 1,545,103 crore as against INR 1,265,253 crore as of June 30, 2019, a growth of 22.1%.

Total deposits as of June 30, 2020 were INR 1,189,387 crore, an increase of 24.6% over June 30, 2019. CASA deposits comprising 40.1% of total deposits as of June 30, 2020.

Total advances as of June 30, 2020 were INR 1,003,299 crore, an increase of 20.9% over June 30, 2019. Domestic advances grew by 21.0% over June 30, 2019. While total retail advances rose 7.2% to Rs 4.75 lakh crore as of June 30 over the last one year, loans in the auto, two-wheeler, commercial vehicles and commercial equipment categories declines. Loans against securities also contracted. Retail loans comprise 48% of the banks’ total lending book

The Bank’s total Capital Adequacy Ratio (CAR) as per Basel III guidelines was at 18.9% as on June 30, 2020 (16.9% as on June 30, 2019)

Bank has two subsidiaries: HDFC Securities Limited (HSL) is among the leading retail broking firms in India. As on June 30, 2020, the Bank held 96.5% stake in HSL.

HDB Financial Services Limited (HDBFSL) is a non-deposit taking non-banking finance company (‘NBFC’) offering wide range of loans and asset finance products to individuals, emerging businesses and micro enterprises. As on June 30, 2020, the Bank held 95.3% stake in HDBFSL. The consolidated net profit for the quarter ended June 30, 2020 was INR 6,927 crore, up 22.0%, over the quarter ended June 30, 2019. Consolidated advances grew by 19.6% from INR 880,939 crore as on June 30, 2019 to INR 1,053,683 crore as on June 30, 2020

Financial

ROE and ROCE is around 17% and 7.3% respectively and book value per share is around INR 325 and share is currently trading at 3.4x of its book value. Bank is currently trading at annualized PE of around 23 which is average as per industry benchmark. Promoter hold around 26.1% in the bank, FIIs and mutual fund hold around 37% and 14% respectively. The Bank held floating provisions of Rs 1,451 crore and contingent provisions of Rs 4,002 crore as on June 30, 2020

Share View: Share price high 1,304 (52 week) and now 1,100. HDFC Bank Limited is a publicly held banking company engaged in providing a range of banking and financial services including retail banking, wholesale banking and treasury operations

Strong support at INR 1,050/950. Long term investor should continue with the company and any correction with good opportunity to add on SIP basis. 

Opportunities: Strong Balance sheet and continuously showing strength in YoY and QoQ especially for deposit, advances all grew in YoY and QoQ. CASA deposit ratio is also improved around 40.1% of total deposits. Despite Covid – 19 outbreak HDFC has increased NII and also bottom line improved in YoY. Further after Yes bank Fiasco retail banking / customer are also looking for big bank like HDFC. Strong brand network: As of June 30, 2020, the Bank’s distribution network was at 5,326 branches and 14,996 ATMs / Cash Deposit & Withdrawal Machines (CDMs) across 2,825 cities / towns as against 4,990 branches and 13,727 ATMs / CDMs across 2,764 cities / towns as of June 30, 2019. Number of employees were at 115,822 as of June 30, 2020 (as against 104,154 as of June 30, 2019).

Risk: QoQ result is down NII and profit declined due to other income impact. Other income down in YoY and QoQ. The main components of other income Fee & Commission declined by more than 37% in this quarter. The continued slowdown in economic activity has led to a decrease in loan originations, the sale of third party products, the use of credit and debit cards by customers, the efficiency in collection efforts and waiver of certain fees. The continued slowdown may lead to a rise in the number of customer defaults and consequently an increase in provisions there against.

Analysis:

One of the best among the Indian banking Industry. This bank was not even in the TOP 15 companies a decade back and today is No#1 as per the free-float Market Cap. Very high growth, best margin and least NPA. Consistently giving good results for the last 2 decades. Far further than 2nd Biggest bank Icici Bank. India has transformed from a 0.5 trillion to 2.8 Trillion economy and the major Bank has cashed this Boom. HDFC Bank was having revenue and profits of around 1500 cr and 200 cr during the year 2000. We may see HDFC Bank enter the elite club companies of India with Profit of more than 1 lakh cr till 2030, 1st Indian bank to see this profit. Today HDFC bank generates around 1.5 lakh cr revenue. Better managing sales along with professionally managed Gross NPA (around 1.3%) has helped HDFC bank cross 25000 cr profit-making club where just 3-5 Indian Companies are there. Investment of 1 Lakh done 2 decades back is today 2.75 crore along with consistent dividends. All those holding for a long time, no need to worry as Economy if moving from 3 tr to 5 tr till 2025, majority of the banks with good management will be again able to cash the boom.

This is a must have stock in portfolio. It can be purchased around 1025 to 1045 levels with a target of Rs 1400 in near future. 

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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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.

#Britannia #Result #Analysis #FY21 #Investment #Infyture #StockMarket #Money #ETF #SIP #Investing #NEWS #Stocks #Trading #StockAction

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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