Query Board

Investment Horizon : Query-Specific : Subscribers can ask their queries regarding stocks they hold and get our expert guidance. 




Brightcom Group offers online or digital marketing services to direct marketers, brand advertisers and marketing agencies worldwide. Taking into account the company’s quarterly performance, on a consolidated basis it reported strong growth of 41.75 per cent from ₹2,021.33 crore registered in Q3FY22, recording total revenue of ₹2,865.17 crore in Q3FY23. When comparing the net profit for the third quarter of FY23 to the same quarter last year, it surged 46.44 per cent from ₹371.45 crore to ₹543.93 crore. Good ROE and ROCE levels indicate that the business is profitable. On the flip side, the Securities and Exchange Board of India (SEBI) has demanded a forensic audit of Brightcom Group’s financial statements for the financial years 2014-15 to 2019-20. According to the market regulator, it has discovered inconsistencies in Brightcom Group’s disclosures that could be harmful to investors’ interests and the securities markets. SEBI recently issued a show-cause notice-cum-interim order against the company, alleging significant financial statement fraud. Due to intense selling pressure, the shares of the company are hitting back-to-back lower circuits. In the past year, shares have slumped over 88 per cent, and they continue to hit 52-week lows daily. And hence, making an investment now will be like catching a falling knife. Our recommendation is to AVOID. 




Kirloskar Electric Company Limited (KEC) is a leading Indian electrical engineering company based in Pune, Maharashtra. KEC manufactures a wide range of electrical equipment, including motors, generators, transformers, switchgears and control panels, among others. The company caters to various industries such as power generation, transmission and distribution, infrastructure and process industries. KEC’s products are renowned for their quality, reliability and durability, and are used in diverse applications ranging from agriculture and healthcare to oil and gas exploration. In Q3FY23, the company’s net sales zoomed 40 per cent from the December 2021 quarter to ₹115.75 crore. The EBITDA level of the company stood at ₹10.56 crore, witnessing a massive jump of 760 per cent. The quarterly net profit of the company soared 131 per cent from the corresponding quarter last year to `3.38 crore. The stock has experienced significant buying activity, driven by its impressive performance, which has resulted in multi-bagger returns of more than 650 per cent in the last two years. Moreover, in the last year alone, the stock has surged more than 290 per cent. However, this company delivered ROE of -61.7 per cent and ROCE of -1.42 per cent, which is not good for from an investor’s perspective. KEC is not able to generate stable profit. Therefore, we recommend AVOID. 

 

Established in the year 2000, HDFC Life is a leading, listed, long-term life insurance solutions provider in India, offering a variety of individual and group insurance solutions that address various customer needs such as protection, pension, savings, investment and health. The company has more than 60 products and optional riders in its portfolio, catering to a diverse range of customer needs. Taking into account the company’s quarterly performance, on a consolidated basis it reported a considerable growth of 24.6 per cent from ₹15,624.90 crore registered in Q4FY22, recording total revenue of ₹19,468.60 crore in Q4FY23. 

When comparing the net profit for the fourth quarter of FY23 to the same quarter last year, it fell 28.49 per cent from ₹506.19 crore to ₹361.97 crore. In terms of annual performance, the consolidated net profit of company edged up by 3.12 per cent to ₹1,368.28 crore from ₹1,326.93 crore the previous year. On the other side, net sales climbed by 21.53 per cent to ₹56,878.78 crore as against ₹46,800.95 crore during the previous year ended March 2022. At the time of writing, the company had a market value of ₹113,865 crore, with the promoter owning 50.31 per cent stake. 

Institutional investors have sizeable stake of 36.29 per cent, out of which foreign portfolio investors (FPIs) owned a significant 29.84 per cent. The company recently announced that the RBI has given HDFC Bank or HDFC Ltd. permission to raise their shareholding of HDFC Life Insurance Co. to more than 50 per cent. Consequently, shares have experienced a modest rally over the past month. Considering the price movement, the stock has room to grow as it is well below its 52-week high of ₹620.70. With greater consumer awareness, innovative products and more distribution channels, the insurance industry has experienced substantial growth. 

Considering the long-term outlook of the insurance industry and the company’s growth prospects, we recommend BUY. 

 

Rail Vikas Nigam Ltd. was incorporated as a PSU of the Ministry of Railways. It is in the business of implementing a variety of rail infrastructure projects given by the ministry, such as doubling, gauge conversion, new lines, railway electrification, major bridges, electrification and workshops. Taking into account the company’s quarterly performance, on a consolidated basis it reported a minor decline of 0.74 per cent from ₹5,049.24 crore registered in Q3FY22, recording total revenue of ₹5,012.09 crore in Q3FY23. When comparing the net profit for the third quarter of FY23 to the same quarter last year, it soared 30.51 per cent from ₹293.01 crore to ₹382.42 crore. 

In terms of annual performance, the consolidated net profit of company surged 19.27 per cent to ₹1,182.69 crore from ₹991.57 crore the previous year. On the other side, net sales climbed by 25.82 per cent to ₹19,381.71 crore as against ₹15,403.76 crore during the previous year ended on March 2021. In addition to having impressive ROE and ROCE ratios that demonstrate the company’s strong profitability position, it also has a considerably lower PE ratio than its competitors and the industry average. The company is constantly in the limelight as it has been receiving numerous massive orders. 

Among the company’s major projects are the elevated Kona expressway, the Varanasi-Ranchi-Kolkata highway, projects of the North Western Railway, Mumbai metro line 2B of MMRDA, and the manufacturing and maintenance of Vande Bharat train sets. The company also announced that it has incorporated a subsidiary company named Kinet Railway Solutions Ltd. The Ministry of Finance recently approved the status of Rail Vikas Nigam Limited (RVNL) as a Navratna Central Public Sector Enterprise (CPSE). The shares of the company soared more than 55 per cent in just one month, resulting in outstanding returns of nearly 220 per cent over the last year! Given the investor optimism in railway stocks and the company’s outstanding growth potential, we recommend BUY. 

 

Vishnu Chemicals is a leading Indian manufacturer and exporter of inorganic chemicals with a focus on specialty chemicals and custom manufacturing solutions. The company was founded in 1995 and is headquartered in Hyderabad, Telangana. Vishnu Chemicals has a strong reputation for quality and reliability, and its products are used in a wide range of industries including pharmaceuticals, agrochemicals, textiles and water treatment, among others. Its product portfolio includes a wide range of inorganic chemicals such as sodium bisulphite, sodium metabisulphite, sodium sulphite and sulphuric acid, among others. The company has a strong focus on research and development and invests heavily in innovation and technology to develop new products and applications. 

In Q3FY23, the net sales of the company went up by 9.2 per cent from last year’s same quarter to ₹325.23 crore. The EBITDA level surged 26.34 per cent from the December 2021 quarter to ₹58.09 crore. The net profit of the company zoomed by 29 per cent from corresponding quarter last year to ₹31.74 crore. The company has built world-class infrastructure in an industry with high barriers to entry, and customers rely on it for consistent supply as performance ingredients are critical to their end products. Vishnu Chemicals also has a strong moat of being a leader in a niche industry and its products continue to see robust demand across varied end-user applications in domestic and export markets.

Additionally, the company has a unique backward integration plant that is a milestone for the company and implies that it will be healthy and profitable while focusing on sustainability. The company has also generated strong cash flows over the years, which has helped in its growth. Currently, Vishnu Chemicals is generating good sales and making handsome profits. In terms of valuation, it is trading at 14.4 times against the industry PE of 27.5 times. And even though company has high book value, you can hold the stock for some time. Our recommendation, therefore, is to HOLD.   

 

Saksoft Ltd. is an information technology company that provides digital transformation services and solutions to clients across various industries. Headquartered in Chennai, Saksoft has a global presence with offices in the United States, Europe and Asia-Pacific regions. The company’s services include application development, data analytics, cloud computing and cyber security. Saksoft has been recognised for its quality of services and expertise in technology and has won several awards and accolades over the years. It focuses on mining customers to move them upwards in terms of revenue with a strategy to target the 100 million to 2 billion market and get customers to a million dollar plus engagement.

In Q3FY23, the net sales of the company surged by more than 37 per cent from last year’s same quarter to ₹171.68 crore. The EBITDA level of the company stood at ₹29.89 crore, witnessing a surge of more than 32 per cent from the December quarter 2021. The net profit of the company zoomed by more than 33 per cent from the corresponding quarter last year to ₹19.86 crore. The company had previously achieved its highest half-yearly revenue of ₹312 crore, witnessing growth of 44 per cent on a YoY basis. The stock has experienced significant buying activity, driven by its impressive performance, which has resulted in multi-bagger returns of over 1,300 per cent in the last three years.

Moreover, in the last year alone, the stock has surged more than 145 per cent. The company has given outstanding returns in the past and generated good profits consistently. It has a high price-to-book value of 6.31 times. However, it is still fundamentally strong with high ROCE of 26.2 per cent and ROE of 21.9 per cent. Moreover, the company aims to become a USD 100 million company by FY25, with a mix of organic and inorganic growth. The company will continue to explore the inorganic route which will further strengthen Saksoft’s business model. Hence, we recommend HOLD.