Your Stock Queries

Raymond Ltd.

I have 95 shares of Raymond Ltd. in my portfolio that I bought at Rs 215 per share. What should my next step be with regard to these?
-Ruhan Singhal, Via Email

BSE/NSE Code	500330/RAYMOND
Face Value	Rs 10
CMP	Rs 250
52-Week high/low	Rs 489/Rs 176
Current Profit/(Loss)	16.27 per cent

Raymond Ltd. manufactures and sells worsted fabric products in India and internationally. The company’s textiles division produces pure-wool, wool-blended and premium polyester viscose worsted suiting as well as blankets and shawls. It also makes denim fabric and cotton yarn products, readymade garments, and designer wear products. Its brand names like Raymond Premium Apparel, Park Avenue, Parx and Colorplus are familiar to most. Apart from clothing, the company’s engineering division manufactures engineering products such as steel files, cutting tools, hand tools, agri tools and construction tools. Raymond Ltd. also engages in real estate activities.

On the financial front, the results for Q1FY14 have not been encouraging for the company. Its topline witnessed flattish growth of a mere four per cent on a YoY basis to stand at Rs 873.79 crore as against Rs 836.94 crore witnessed during the same quarter last fiscal. What is disheartening is that its bottomline, which has slumped into the red after remaining in the green for the past three consecutive quarters, registering a loss of Rs 49.68 crore. The first quarter of the current fiscal has seen a significant rise in the employee costs and purchase of traded goods, which went up by 11 per cent and 30 per cent respectively on a YoY basis.

Looking at the handsome profit that you are sitting on, it is advisable that you book partial profits as per your comfort levels and take a final call after the company declares it Q2FY14 numbers.

Aurobindo Pharma

I have 200 shares of Aurobindo Pharma purchased at Rs 150 per share. Should I hold these for some time?
-Kanika Sethi,Via Email

BSE/NSE Code	524804/AUROPHARMA
Face Value	Re 1
CMP	Rs 209
52-Week high/low	Rs 214/Rs 127
Current Profit/(Loss)	39.33 per cent

Aurobindo Pharma commenced operations in 1988-89 with a single unit manufacturing Semi-Synthetic Penicillin (SSP) at Pondicherry. In addition to being the market leader in Semi-Synthetic Penicillins, it has a presence in key therapeutic segments such as neurosciences, cardiovasculars, anti-retrovirals, anti-diabetics, gastroenterology and cephalosporins, among others.

In the June 2013 quarter, the company has reported a net profit of Rs 18.6 crore against a net loss of Rs 129 crore seen a year ago. It came back to profits despite a notional forex loss of Rs 172 crore. The net revenues for the quarter grew by 42 per cent to Rs 1670 crore owing to strong growth in the exports segment. The company has reported nearly two-fold growth in its US business, and the revenues from there shot up by 90 per cent to Rs 624 crore. The revenues in the rest of the markets (including Europe) also grew by 53 per cent to Rs 284 crore. Overall, its exports grew by 56 per cent to Rs 1266 crore. The anti-retrovirals segment revenues also went up by 37 per cent, which is highly commendable especially because the company had decided to focus on value growth and not on volumes in the segment.

The company has reported EBITDA margins of 18.10 per cent for the quarter against 11.67 per cent a year ago. This was mainly due to the decline in material costs as a percentage of sales. At its CMP of Rs 209, the stock is trading at an adjusted TTM PE of 13x. We believe that the valuation of this stock is lesser as compared to that of its peers. Given these factors and its strong performance, we suggest that you hold the counter to garner further returns if you are not particularly in a hurry to sell off your position.

Suzlon Energy

I have bought 5000 shares of Suzlon Energy at Rs 8 per share. What should I do with these now?
-Pravin Sulakhe,Via email

BSE/NSE Code	532667/SUZLON
Face Value	Rs 2
CMP	Rs 6.61
52-Week high/low	Rs 27/Rs 6
Current Profit/(Loss)	(17.37 per cent)

Suzlon Energy is a wind power company based in India, whose manufacturing footprint covers the gamut of wind power equipment. It is a vertically integrated wind turbine maker, with manufacturing capabilities for all related key components.

You may have been holding on to the 5000 shares you have bought in the hope of the stock bouncing back, but your expectation may have been overly optimistic considering the fact that the stock has not been a favourite in the markets for quite a long time now. The reason is simple – the dismal financial performance of the company and the fact that a significant portion of its promoters’ holding is pledged. As regards its financial performance for Q1FY14, the company has posted a topline of Rs 3851 crore on a consolidated basis as against Rs 4746 crore in Q1FY13, taking a decline of 18.86 per cent. The bottomline too is weak, and the company has extended the loss of Rs 848 crore seen in Q1FY13 to Rs 1058.90 crore in the first quarter of this fiscal.

This is the sixth consecutive quarter in which the company has remained in red. There is no clear indication of the performance of the company improving going forward, at least no such information in the public domain. We suggest that you exit your position in this counter completely even if you have to book losses.

Videocon Industries

Can I enter this stock at the present levels?
-Ashwin C S,Via Email

BSE/NSE Code	511389/VIDEOIND
Face Value	Rs 10
CMP	Rs 176
52-Week high/low	Rs 246/Rs 163
Current Profit/(Loss)	N.A.

Videocon Industries, together with its subsidiaries, has interests in several sectors like consumer electronics and home appliances, oil & gas, telecommunications and power businesses in India and internationally. The company manufactures, assembles and distributes a range of consumer electronics including televisions, home entertainment systems, washing machines, air conditioners and microwave ovens, to name a few. Apart from this, it has also diversified its interests to the exploration and production of oil & gas properties primarily located in India, Brazil, Mozambique, East Timor, Indonesia and Australia. In addition, the company offers mobile phones and telecommunications services such as GSM mobile services. Further, it has developed two coal-fired thermal electricity power projects with a capacity of 1200 MW in the states of Gujarat and Chhattisgarh and a solar photovoltaic power project in the Warora district of Maharashtra.

The company’s financial performance for the quarter ended June 2013 is not on the happy side. The topline remained flat to stand at Rs 3032.45 crore for Q1FY14 as against Rs 3018 crore posted during Q1FY13. The bottomline stood at Rs 10.63 crore for Q1FY14, witnessing a decline of 78 per cent on a YoY basis. The finance costs and raw material expenses, which went up by 54 per cent and 11 per cent on a YoY basis, played spoilsport in its financials. We suggest that you stay away from the counter for the time being and take a decision after the Q2FY14 results are announced.