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ABG Shipyard

I holding 127 shares of ABG Shipyard purchased at Rs 330 apiece. Should I hold these or make an exit?
- Vinayak Sasane,Via Email

BSE/NSE Code	532682/ABGSHIP
Face Value	Rs 10
CMP	Rs 250
52-Week high/low	Rs 413/Rs 228
Current Profit/(Loss)	(24 per cent)

ABG Shipyard builds and repairs ships and rigs in India and internationally. The company also offers ship repair services including ship conversion, refurbishment, modernisation, upgradation, retrofitting and rebuilding for various vessels. In a span of 15 years from 1991, the company has achieved the status of being the country’s largest private sector shipbuilding yard.

An analysis of the financial performance of this company shows it to be fairly disappointing. For the June 2013 quarter, its topline declined by 34.04 per cent on a YoY basis to come in at Rs 422.22 crore as against Rs 640.13 crore for the same quarter last fiscal. The bottomline too declined by 89 per cent for Q1FY14 on a YoY basis. Its net profit stands at Rs 4.25 crore as against Rs 41.31 crore for Q1FY13. This is the fifth consecutive quarter in which the company’s bottomline has declined. The drop in this quarter can be attributed to the interest cost, which has gone up by 43 per cent on a YoY basis. The company’s debt-to-equity stands at 2.43x, which is on the higher side. Also, 69 per cent of the promoter shareholding is pledged, which is certainly not good news. At this juncture, we feel that it is best to exit this stock.

ING Vysya Bank

I am holding 100 shares of ING Vysya Bank bought at Rs 525 per share. Should I continue to hold these?
- C S Lakshmanan, Via Email

BSE/NSE Code	531807/INGVYSYABK
Face Value	Rs 10
CMP	Rs 491
52-Week high/low	Rs 667/Rs 361
Current Profit/(Loss)	(6.48 per cent)

ING Vysya Bank is a private sector bank with retail, private and wholesale banking platforms that serve over two million customers. The bank offers a broad range of innovative and established products and services across its 527 branches. It was formed from the 2002 acquisition of an equity stake in Indian Vysya Bank by the Dutch ING Group. This merger marked the first between an Indian bank and a foreign bank.

ING Vysya Bank has seen faster growth than the industry average over the past eight quarters. This can be attributed to its well-diversified loan book, with the share of corporate loans at 41 per cent, business banking at 33 per cent, consumer banking at 20 per cent and agri-loans at seven per cent as of Q1FY14. The bank expects to continue to grow at a fast pace, with its primary focus being on the SME and retail segments. Its Net Interest Margin (NIM) remains buoyant at over 3.5 per cent. Going forward, while the sharp rise in short-term rates could hit the NIM, this could be partially offset by the recent capital infusion of Rs 1800 crore. Over the past two years, the bank’s focus has been on improving its productivity by leveraging the existing infrastructure. Hence, the cost-to-assets has steadily decreased, reaching 2.5 per cent by FY13 end against 2.8 per cent in FY11. The bank has demonstrated consistent improvement in its asset quality over the past three years despite a tough macro environment. Its Gross Non-Performing Assets (GNPAs) as a percentage of advances declined to 1.75 per cent at June end 2013 from 3 per cent in FY10. We suggest that you hold the counter from a longer-term perspective to garner better returns.

ITC

I have bought 1000 shares of ITC at an average price of Rs 368. Should I hold these or exit this stock?
- Gurpreet Saluja, Via Email

BSE/NSE Code	500875/ITC
Face Value	Rs 1
CMP	Rs 344
52-Week high/low	Rs 380/Rs 220
Current Profit/(Loss)	(6.52 per cent)

The most interesting this about this company is its segment spread. Whether you reach out for stationery or a bottle of cooking oil in a store, you are likely to pick up an ITC product. Of course, ITC is an acknowledged market leader in the cigarettes category, but it is also rapidly gaining market share even in its evolving businesses of packaged foods and confectionery, branded apparel, personal care and stationery. Apart from this, the company is also present in the hotels, paperboards and packaging and agri-businesses.

For Q1FY14, ITC posted robust growth of 18.1 per cent on a YoY basis in its net profit to Rs 1892 crore. The healthy performance on the bottomline front can be attributed to the healthy expansion in its operating profit margins, which went up by 237 basis points on a YoY basis. ITC’s topline for the quarter rose by 10.3 per cent to stand at Rs 7338 crore on a YoY basis. The company’s major segments of operation, viz. cigarettes and the non-cigarette FMCG business, posted lower-than-estimated sales in the fiscal. The cigarettes business posted a topline growth of 7.1 per cent, while the growth in the other FMCG business stood at 18.4 per cent. The non-cigarette FMCG business turned profitable for the first time in Q4FY13, posting a loss of Rs 19 crore in Q1FY14. The agri-business continued with its impressive performance, with a topline growth of 29.4 per cent. The performance of the hotels business continued to remain muted, registering a topline growth of 7.5 per cent for the quarter. The shares are currently trading at a PE of 35.42x. We suggest that you hold the stock and stick around in this counter from a longer-term perspective to garner better returns.

Chennai Petroleum Corporation

I had bought this stock when it was trading at Rs 80. Since then, its prices have nosedived. Please suggest what my next step on this should be.
- Mallika Wahid, Via Email

BSE/NSE Code	500110/CHENNAIPETRO
Face Value	Rs 10
CMP	Rs 57
52-Week high/low	Rs 162/Rs 56
Current Profit/(Loss)	(28.75 per cent)

Chennai Petroleum Corporation (CPCL) engages in the production and sale of petroleum and specialty products in India. The company has two refineries, one at Manali and the other at Nagapattinam, with a combined refining capacity of 11.5 Million Tonnes Per Annum (MMTPA). The Manali refinery has a capacity of 10.5 MMTPA and is one of the most complex refineries in India, with fuel, lube, wax and petrochemical feedstock production facilities. CPCL's second refinery is located in the Cauvery Basin at Nagapattinam. This unit was set up with a capacity of 0.5 MMTPA in 1993 and was later enhanced to 1 MMTPA.

Now, let us take a look at the financial performance of the company. This has been on the muted side for Q1FY14. The company saw yet another quarter of losses, the third in a row. The net loss of the company for the quarter stood at Rs 377.19 crore as against a loss of Rs 968 crore in the corresponding quarter of the previous fiscal. The topline witnessed a flattish jump of a mere 4.38 per cent on a YoY basis to stand at Rs 11521 crore. The company is in the red at the EBITDA levels too.

There is no clear information in the public domain which gives any indication of the future path of the company. Hence, it will be better that you exit your position in the stock even if you have to book losses.