Your Stock Queries

PUNJ LLOYD

I am holding about 300 shares of Punj Lloyd, purchased a few years ago. I have held it in anticipation of an appreciation in the long term. Please suggest me the next course of action?
- Vishu Vanhavati, Via Email

BSE/NSE Code	532693/PUNJLLOYD
Face Value	Rs 2
CMP	Rs 45
52-Week high/low	Rs 64/Rs 39
Your Current Profit/(Loss)	N.A

Punj Lloyd provides design, engineering, procurement, construction (EPC), and project management services for the energy, infrastructure, and defence sectors. In a developing country and constantly growing economy like India, EPC companies are always in demand. Also, with the expansion in the defence sector, the business opportunities for the company are enormous.

Punj Lloyd operates in India, South Asia, South East Asia, the Caspian, the Middle East, North Africa, the United Kingdom, and Europe. It is a diversified conglomerate, owing to its foray into aviation, defence and upstream through its subsidiaries and joint ventures.

Though the company has an enviable history, it has failed to impress investors with its financial performance in the last few years. FY13 was also not an exception to this. The topline of the company in FY13 witnessed a growth of 10.62 per cent to stand at Rs 11408.18 crore as against Rs 10312.92 crore witnessed in FY12. The bottomline in FY13 remained in red as the company posted a loss of Rs 7.21 crore as against a profit of Rs 91.85 crore witnessed in FY12. The drop in the bottomline can be attributed to higher interest cost that went up by 23.44 per cent in FY13 to stand at Rs 780.77 crore. However, there has been some improvement at the EBITDA level which went up by 28.18 per cent on a YoY basis in FY13 to stand at Rs 1150.20 crore. The EBITDA margins too witnessed an improvement of 138 basis points. In the last six fiscals, the company has been able to stay in the black only twice. 

The performance of the stock has not been well on the bourses as it has underperformed the broader indices. The company has a debt of Rs 5013 crore, taking its debt to equity ratio to 1.78x. At this juncture, you can exit the stock although we are not aware of the amount of loss that you may be incurring.
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BHARTI AIRTEL

Is it the right time to invest in this stock?
 – Aparna Sahu, Via Email

BSE/NSE Code	532454/BHARTIARTL
Face Value	Rs 5
CMP	Rs 295
52-Week high/low	Rs 371/Rs 216
Your Current Profit/(Loss)	N.A

India's telecommunication network is the second largest in the world in terms of the total number of telephone users. With the increased dependence on telecommunication, companies in this sphere are crowded with customers. However, with a number of scams and regulatory issues, the sector’s prospects are slightly blurred.

Bharti Airtel (Airtel), promoted by Sunil Bharti Mittal, is a well-known name in the telecommunication space in India as also globally. Airtel has a presence in 20 countries across Asia and Africa. It is also one of the top four companies engaged in providing mobile services globally in terms of subscribers. In India, the company's product offerings include 2G, 3G and 4G wireless services, mobile commerce, fixed line services, high speed DSL broadband, IPTV, DTH, enterprise services including national and international long distance services to carriers. In the rest of the geographies, it offers 2G, 3G wireless services and mobile commerce. Bharti Airtel had over 269 million customers across its operations at the end of March 2013.

On the financial front, the performance of the company has been muted for FY13. The topline for FY13 witnessed growth of 12.40 per cent to stand at Rs 80311 crore as against Rs 71450 crore for FY12. The bottomline, however, declined by 46.57 per cent for FY13 to stand at Rs 2275.7 crore as against Rs 4259 crore for FY12. The EBITDA witnessed a growth of mere 4.88 per cent to stand at Rs 24870 crore for FY13 as against Rs 23712.30 crore for the last fiscal. However, the EBITDA margins fell by 222 basis points on a YoY basis for FY13 to 30.96 per cent. For Q4FY13, Bharti’s MOU grew by 4.8 per cent to 455 minutes and it saw a 5.1 per cent QoQ rise in its network traffic. The ARPM declined slightly by 0.5 per cent to 42.3paise/min. In Africa, the company posted a 14.2 per cent QoQ decline in MOU to 123 minutes and its ARPM declined by five per cent QoQ. At present, the stock trades at a PE of 49.24x which looks a bit on the higher side. 

We would suggest you to refrain from investing in the scrip for the moment till some clarity on its regulation and international business is achieved.
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CADILA HEALTHCARE

I have bought 200 shares of Cadila at Rs 725 an year ago. Should I continue to hold the stock or book profit?
– Keshav Karnatak, Via Email

BSE/NSE Code	532321/CADILAHC
Face Value	Rs 5
CMP	Rs 778
52-Week high/low	Rs 975/Rs 710
Your Current Profit/(Loss)	7.45 per cent

The March 2013 quarter has been positive for most Pharma companies and this has bided well for stocks in the sector. Cadila has been no exception. It is, however, advisable to go through the details of its profile as also its financials before taking a call on your investment.

Zydus Cadila is an innovative global pharmaceutical company that discovers, develops, manufactures and markets a broad range of healthcare products. The group’s operations range from API to formulations, animal health products and cosmeceuticals.

On the financial front, the performance of the company has been a mixed bag. It has posted a topline of Rs 1565.76 crore for Q4FY13, witnessing a growth of 16.47 per cent on a YoY basis, which is certainly better than the street's expectation. On the EBITDA front, it witnessed a flattish growth of a mere 1.27 per cent on a YoY basis to stand at Rs 286.39 crore. The EBITDA margins witnessed a decline of 275 basis points on a YoY basis to stand at 18.29 per cent. The OPM stood at 15.3 per cent, which is a dip of 175 basis points. During the quarter, the company has seen tax write-back to the tune of Rs 583 crore. The net profit witnessed a growth of 53.59 per cent on a YoY basis to come in at Rs 262 crore for Q4FY13, but this slips down to 19.48 per cent if the tax write-back is adjusted. Cadila's domestic formulation business has witnessed a growth of 15 per cent on a YoY basis to post revenues of Rs 7411 crore, while the exports rose by 19.7 per cent for the same period, amounting to revenues of Rs 7429 crore. The company has strengthened its position with regard to pipelines. The group filed 33 ANDAs during the year 2012-13, with its cumulative filings now at 173. It received approvals for 15 ANDAs during the year, taking the total to 76. Cadila trades at a PE of 20.47x. 

We suggest you to hold the stock in order to garner better returns in the longer term.
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EROS INTERNATIONAL MEDIA

I am holding shares of Eros International Media and the stock is currently trading at a rate which is 10 per cent above my purchase price? Should I book profit or wait for some more time?
 – Jayesh Vitthlani, Baroda

BSE/NSE Code	533261/EROSMEDIA
Face Value	Rs 10
CMP	Rs 162
52-Week high/low	Rs 230/Rs 153
Your Current Profit/(Loss)	10 per cent

A recent report by KPMG, a consultancy firm, said that the media and entertainment industry in India is expected to grow by 11.8 percent in 2013, driven by digitisation and growth in new media. With increased advertising spends and an ever-increasing consumer base, the industry is likely to propel forward in the near term.

A part of the Eros International Plc. Group, the company is one of the leading players in the Indian film entertainment industry. It co-produces, acquires and distributes Indian language films in multiple formats worldwide across theatrical, television syndication and digital platforms. It has a history of over three decades and has cultivated talent, production companies, exhibitors and other key participants in the industry. The group has a distribution network that spans over 50 countries, with offices in India, UK, USA, Dubai, Australia, Fiji, Isle of Man and Singapore.

On the financial front, the performance of the company remained muted for FY13. The topline witnessed a growth of 13.14 per cent for FY13 to stand at Rs 1068 crore as against Rs 944 crore for FY12. The bottomline remained almost flat witnessing a growth of 4.53 per cent to stand at Rs 154 crore as against Rs 148 crore for FY12. On the EBITDA front, the company witnessed growth of 6.54 per cent to stand at Rs 226 crore for FY13, while the EBITDA margins witnessed a drop of 131 basis points on a YoY basis to stand at 21.19 per cent. There has been a significant drop in the interest payment which fell by 31.40 per cent to stand at Rs 9.22 crore. The stock is trading at a PE of 9.21x. 

You should hold on to your investment to garner better returns in the longer term.