Your Stock Queries
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BHARTI INFRATEL
I have been holding 100 shares of Bharti Infratel purchased at an average price of Rs 170 per share. What should be my next step?
–Prashant Haldikar, Via Email
| BSE/NSE Code | 534816/INFRATEL |
| Face Value | Rs 10 |
| CMP | Rs 156 |
| 52-Week high/low | Rs 216/Rs 126 |
| Current Profit/(Loss) | (8.23 per cent) |
India is the second largest telecom market by users, just behind China. However, lower tariff rates, thanks to competition, and debts have been troubling the sector lately. Following are some of the positive aspects of Bharti Infratel, which is into telecom towers.
It is one of the largest tower operators in India in the telecom space. The company at present has more than 34000 towers across the circles that they operate in. The company builds, owns, operates, and manages towers and related infrastructure for wireless telecommunications service providers.
On the financial front, the company has performed well for FY13. The topline witnessed a growth of 8.67 per cent on a YoY basis to stand at Rs 10272 crore as against Rs 9452 crore for FY12. The bottomline witnessed gains of 33.83 per cent on a YoY basis to stand at Rs 1002 crore for FY13 as against Rs 749 crore for FY12. One fact that needs to be mentioned here and may help us in reaching a conclusion is the strong cash flow of the company. This is a key feature keeping in mind long-term contracts, as 2.5 per cent annual escalation clauses and heavy exit penalties are likely to keep the momentum going for the company. The stock prices have corrected by more than 25 per cent since the start of the calendar year. On the valuation front, the stock trades at a PE of 27.76x. We believe that you must stay invested in the counter and take a decision depending on the Q1FY14 results.
CASTROL INDIA
I have bought 190 shares of this company at Rs 300 per share. Should I continue to hold these?
– Prananjay Das, Via Email
| BSE/NSE Code | 500870/CASTROL |
| Face Value | Rs 10 |
| CMP | Rs 348 |
| 52-Week high/low | Rs 372/Rs 365 |
| Current Profit/(Loss) | 21.66 per cent |
As we can see, you are currently sitting on some decent profit. Let us examine the company before taking a call on your investments in the counter.
Castrol India manufactures and markets automotive and industrial lubricants, and related services in India and internationally. It offers its products through a network of 270 distributors, servicing approximately 91000 retail outlets.
On the financial front, the numbers remained subdued for the company in Q1CY13 (it follows a calendar year). The topline remained flat at Rs 781 crore for Q1CY13 as against Rs 781.70 crore for Q1CY12. The bottomline too remained flat and witnessed growth of a mere 1.14 per cent on a YoY basis to stand at Rs 124.30 crore for Q1CY13 as against Rs 122.90 crore for Q1CY12. On the valuation front, the company is trading at a valuation of 38.37x. We suggest that you book partial profits of at least 50 per cent of your portfolio at the moment and hold the rest for garnering better returns from the counter.[PAGE BREAK]
EXIDE INDUSTRIES
Is this the right time to buy this stock?
– Rakesh Singh, Via Email
| BSE/NSE Code | 500086/EXIDEIND |
| Face Value | Re 1 |
| CMP | Rs 127 |
| 52-Week high/low | Rs 166/Rs 116 |
| Current Profit/(Loss) | NA |
The auto parts and equipment industry is closely related to the automobile industry. The demand in this space is more or less proportional to that in the automobile industry. However, we must take a deeper look at the said company before actually investing in it.
Exide Industries manufactures the widest range of storage batteries in the world from 2.5 Ah to 20400 Ah capacity, covering the broadest spectrum of applications. It has also recently forayed into the manufacture and sale of Home UPS/Inverters. Exide has seven battery manufacturing facilities strategically located across the country – three in Maharashtra, two in West Bengal, one in Tamil Nadu and one in Haryana. In addition, the company also has two Home UPS/Inverter manufacturing facilities in Uttarakhand.
In Q1FY14, Exide’s net sales saw an increase of 4.78 per cent to Rs 1626.34 crore, as compared to the previous year. Its operating profit grew by 13.79 per cent to Rs 232.4 crore. This translates into a 113 basis points improvement in its operating profit margin to 14.29 per cent. Its net profit witnessed growth of 3.13 per cent to Rs 156.8 crore. This resulted in a 16 basis points reduction in its net profit margin to 9.64 per cent. Exide stated better margin management, judicious product mix and cost reduction through value engineering as the reasons for margin improvement. Although there has been an increase in the overall sales and profitability of Exide in the quarter under review, its sales in the OE business, industrial batteries business and home UPS business remained disappointing. Moreover, rupee depreciation has put some pressure on the company’s operating margin since the cost of imported lead has been on the rise. We suggest that you stay away from this counter at present.
CMC
I am holding 75 shares of CMC, purchased more than a year ago. I am sitting on some profit and hence need advice on whether to hold or exit this counter.
– Deeksha V, Via Email
| BSE/NSE Code | 517326/CMC |
| Face Value | Rs 10 |
| CMP | Rs 1320 |
| 52-Week high/low | Rs 1510/Rs 824 |
| Current Profit/(Loss) | NA |
The IT industry is currently one of the major growth drivers of the Indian economy. CMC has recently announced its Q1FY14 results, which haven’t been too great but the outlook still remains positive considering the company’s robust performance in the past. Here is a detailed analysis of CMC.
A subsidiary of Tata Consultancy Services, CMC is a part of the USD 100.09 billion Tata Group, India's best known business conglomerate. CMC is a leading systems engineering and integration company in India, offering application design, development, testing services and asset-based solutions in niche segments through turnkey projects of national importance.
In Q1FY14, the company saw a decline in revenues of 7.13 per cent to Rs 486.61 crore, on a sequential basis. The major drag came from its ‘Customer Services’ segment, revenues from which declined by 38.06 per cent to Rs 96.68 crore. Revenues from Systems Integration and IT Enabled Services grew by 7.81 per cent and 4.31 per cent respectively. However, this didn’t provide support to the company’s overall growth. In Q1FY14, CMC also took a hit on its profitability. Its operating profit declined by 5.47 per cent to Rs 70.88 crore and its net profit by 13.38 per cent to Rs 53.13 crore. The decline in net profit can be attributed to the growth in the tax it paid because of the additional dividend it picked up. The performance of CMC has clearly been disappointing. However, the management is optimistic about the prospects of the company. It is aiming at growth that is ahead of the overall IT industry. It has in the past outperformed the industry. We suggest that you hold the stock for a longer term to garner better returns.