Saturday, July 30, 2011

Stock Idea: Dish TV

As expected,the company has come with a reduced net loss in Q1FY12. Loss was down at Rs.18.32 crore compared to Rs.37 croreloss in Q4FY11 and net loss of Rs.63 crore in Q1FY11. The company has done well on the topline front too. Net sales rose 6% on a sequential basis and 51% on a YoY at Rs.460 crore. OPM has been at its best at 27.33% v/s 25% in Q4FY11 and 13% in Q1FY11.

Margins have improved on the back of improved ARPUs and tight costs control. In current Q1, total operating expenses were at 76% of the topline, which is down from 89% in Q1FY11 and from 79% in Q4FY11. What has also helped is the increased price for set top boxes, improved pack mix, higher contribution from HD which earns a substantial premium over regular subscription packs. These improvements seem sustainable in the current fiscal and before the end of FY12, the company is sure to turnaround. The stock price dropped after results due to profit taking due over the long run, the stock holds promise.
Source: Internet (S P Tulsian)

Stock Idea: Crompton Greaves

For Q1FY12, despite a 6% YoY rise in net sales at Rs.2438 crore, the company reported a 58% fall in net profit at Rs.79 crore. Cost of raw material rose 35%. Contribution from power sector remained poor in the single digit but more sharp was the fall in the consumer sector, which fell from 35% to 2%. The company has blamed it all on the delays in new orders in the domestic market due to a slowdown in project finalisation by customers.International business activity in Middle East was affected by around 5-10%.
More than the poor performance, the market has probably taken other factors  - former CEO SM Trehan selling his entire holding of 1.8 lakh shares during Jun 29-July 1 at an average price of Rs.260/share. And secondly, investors continue to remain miffed with its buy of an aircraft for Rs.270 crore, which is being viewed as an extravagance. The stock has been witnessing a major sell off and for the discerning long term investor, this may be a good level to accumulate. The first half of FY12 could remain tough but second half could start seeing improvement.
Source: Internet (by S P Tulsian)

Stock Idea: Navin Flourine

This Arvind Mafatlal operates the largest integrated fluorochemicals complex in India and it also generates a good source of income from sale of Carbon Credits. Its performance for FY11 was subdued but it has begun current fiscal with a big bang. The company posted an unbelievable four-fold jump in net profit at Rs.60.22 crore v/s Rs.15.23 crore on Q1FY11. This is almost close to its entire FY11 net profit of Rs.72 crore. Net sales doubled up to Rs.195 crore. This performance was mainly on the back of robust sales and higher realisations from its refrigerant gas business. Sale of CERs (Certified Emission Reductions or carbon credits) continued in Q1FY12, earning it Rs.64 crore. If one may recollect, the company did not sell any CERs in Q1FY11 no CERs were sold in Q1FY11 due to a suspension of issuance by the UNFCCC. EBIDTA margin stood at a whopping 46% and PAT margin at 31%.
The company recently completed buying back equity shares at a price of Rs.400/share, which is why the equity capital today stands reduced from Rs.10.09 crore to Rs.9.76 crore. It is in the process of restructuring its Organic Chemicals activities including dismantling and redeploying some of the assets of its Dewas unit in other projects currently under implementation at Surat. The Rewas site is now being utilized to set up another state-of-the-art contract manufacturing facility. EPS for Q1FY12 stands at Rs.62, which discounts the current price by around 6 times. For entire FY11, its EPS was at Rs.71. Clearly a fantastic beginning!
Source: Internet (by SP Tulsian)

Stock Idea: ITC

Just when the Street had got disenchanted with the numbers of HUL, the performance of ITC came in and it spread a lot of cheer. On a 20% rise in net sales at Rs.5768 crore, the company for Q1FY12, on a YoY showed a 24.51% rise in net profit at Rs.1333 crore. Raw material cost was up 26%. The company has other income component of Rs.144 crore v/s Rs.98 crore in Q1FY11. Even if we remove this component, the rise in net profit is over 22%. Clearly, the bottomline has essentially been driven by the topline.
Cigarettes remained its main bread earner. It showed a 16% rise in revenue and 21% rise in EBIT. FMCG products showed a 20% rise in revenue and loss of Rs.76.28 crore, which is 14% lower than the loss of Q1FY11. Hotels revenue registered a 9% rise, 33% rise in EBIT. Agri revenue rose 26% with a 21% rise in EBIT while paper showed a 21% rise in revenue as well as EBIT. Overall, all segments have shown an improvement. The company had declared a 1:1 bonus and equity capital has thus shot up from Rs.381.82 crore to Rs.773.81 crore. And even post the bonus, the company is sitting on a jaw dropping reserve of Rs.15126.12 crore. Another positive point in favour the company is that its interest outgo for Q1FY12 at Rs.16.45 crore was just 0.28% of the net sales of the quarter. Surely a stock to own for long term.
Source: Internet (by S P Tulsian)


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