Query Board
This section gives decisive investment rationales to our subscribers on the stock queries they have raised to our research team.
Cholamandalam Investment and Finance Company, is the financial services arm of the Murugappa Group. It commenced business as an equipment financing company and has today emerged as a comprehensive financial services provider. On a quarterly consolidated financial front, the income from interest was reported at ₹2,346.78 crore for Q2FY22 which is a decrease of 0.47 per cent as compared to ₹2,357.95 crore reported for Q2FY21. The total income calculated for Q2FY22 rose by 14.07 per cent to ₹2,470.69 crore from ₹2,436.40 crore in Q2FY21. For Q2FY22, the company earned a net profit of ₹606.54 crore as compared to a net profit of ₹431.91 crore gained in Q2FY21. On the annual front, for FY21 the company posted interest income of ₹9,224.16 crore which is an increase of 13.53 per cent as compared to ₹8,124.16 crore for FY20. The total income for FY21 improved by 10.02 per cent to ₹9,519.62 crore from ₹8,652.29 crore for FY20. For FY21, the company reported a net profit of ₹1,514.91 crore in comparison with net profit of ₹1,052.37crore gained in FY20. The company’s Q2FY22 performance was led by a strong pick-up in disbursements (up 35 per cent YoY), NIM traction (7.7 per cent) and asset quality improvement. The company with its conservative management, comfortable liquidity position and diversified portfolio mix is well-placed to ride on the demand recovery. Hence, we recommend HOLD.
Orient Electric has established itself in the market as a one-stop brand for lifestyle electrical solutions which include fans, lighting, home appliances and switchgears. The company’s quarterly performance shows net sales of ₹594.38 crore in Q2FY22 as compared to ₹433.77 crore in Q2FY21. The operating profit stood at ₹63.22 crore in Q2FY22 as compared to ₹58.50 crore in Q2FY21. The net profit increased by 7.25 per cent to ₹34.77 crore in Q2FY22 as opposed to ₹32.42 crore in Q2FY21. Analysing the annual numbers, the net sales for FY21 is ₹2,032.60 crore, a slight decline from ₹2,061.82 crore in FY20. The operating profit was ₹225.78 crore in FY21, an increase of 25 per cent from ₹180.51 crore in FY20. The net profit for FY21 stood at ₹119.74 crore as opposed to ₹78.62 crore in FY20, a 52.3 per cent jump. All segments performed well during Q2FY22. Revenue for Q2FY22 grew 37 per cent on a YoY basis with similar range-bound growth from every segment. Premium products recorded an upsurge in demand in the quarter. Export markets have also opened up with new orders. Its tender business remained quite sluggish. The strong growth momentum in electric consumer durables (ECD) business was primarily led by premium, economy and portable fans, driving the value share of the business. Hence, bearing optimistic views regarding the future growth of the company, we recommend BUY.
Hindalco Industries is a metal flagship company of the Aditya Birla Group which is the industry leader in aluminium and copper. In aluminium, the company caters to the entire value chain starting from mining of bauxite and coal. The company also has one of the largest single location copper smelting facilities in India. Hindalco Industries’ copper facility in India comprises a world-class copper smelter, downstream facilities, a fertiliser plant and a captive jetty.
The copper smelter is among the world’s largest custom smelters at a single location. Hindalco Industries is one of the largest suppliers of copper to the Indian Railways. The company’s quarterly numbers show net sales of ₹47,665 crore in Q2FY22 as compared to ₹31,237 crore in Q2FY21. The operating profit shows the same story with 57.77 per cent increase to ₹7,953 crore in Q2FY22 from ₹5,041 crore in Q2FY21. The net profit showed an outstanding jump to ₹3,417 crore in Q2FY22 from ₹387 crore in Q2FY21. The annual numbers show net sales of ₹1,31,985.00 crore in FY21, a 11.72 percent jump from ₹1,18,144.00 crore in FY20. The operating profit climbed to ₹18,758 crore in FY21 from FY20 which was ₹15,492 crore. The net profit slipped by 7.57 per cent at ₹3,478 crore in FY21 as compared to ₹3,763 in FY20.
Hindalco Industries’ acquisition of Hydro’s aluminium extrusions business in India at Kuppam in Andhra Pradesh for ₹2.5 billion comes under the company’s ‘doubling the downstream’ strategy wherein the company has entailed a capex of USD 1.1 billion. The plant will also serve as an archetype for Hindalco Industries’ upcoming extrusions plant in Silvassa. Once commissioned, the Kuppam and Silvassa units are expected to boost the company’s total aluminium extrusions capacity from 60 KTPA to 109 KTPA. The rise in solar panel manufacturing within the country is also predicted to give a push to aluminium extrusion demand. Hence, we recommend HOLD.
Godrej Consumer Products is an Indian consumer goods company. In line with its ‘3 by 3’ approach to international expansion, it is building a presence in three emerging markets of Asia, Africa and Latin America across the three categories of home care, personal care and hair care. The company ranks among the largest household insecticide and hair care players in the emerging markets. GCPL’s research and development department is focused on developing new products, standardising new analytical methods and finding cheaper and more abundant alternatives to key raw materials.
Through this research and development centre, GCPL continuously interacts with consumers to obtain feedback on its products and the information obtained is leveraged to complement new product development activities. The net sales for the quarter were ₹3,143.61 crore in Q2FY22 as compared to ₹2,893.86 crore in Q2FY21. The operating profit in Q2FY22 is ₹682.33 crore as compared to ₹686.79 in Q2FY21, a slight decline of 0.66 per cent. The net profit rose by 4.54 per cent in Q2FY22 to ₹478.68 crore as opposed to Q2FY21 which stood at ₹457.87. The annual performance of net sales stood at ₹10,936.01 crore in FY21, indicating 11.29 per cent increase. Also, the operating profit increased in FY21 by 8.87 per cent to ₹2,455.32 crore and in FY20 it stood at ₹2,255.33 crore.
The net profit stood at ₹1,720.83 crore in FY21 as compared to ₹1,495.77 crore in FY20 i.e. a staggering 15.05 per cent jump. Its recent sales growth momentum has been very attractive. The management has been able to achieve its stated targets of double-digit top-line growth and 17–18 per cent margins for the business. There is good recovery from Africa, USA and the Middle East (GUAM), which accounted for approximate 22 per cent of FY21 sales. GUAM countries have turned out to be a significant growth component for GCPL. It is expected to deliver good results owing to sustained healthy top-line growth with improvements in margins and RoCE attributable to rapid growth in the domestic business. Hence, we recommend BUY.