Query Board

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

Tata Technologies Ltd., a global engineering giant, helps companies navigate the future of mobility and beyond. Founded in 1989, the company has domain expertise in designing and engineering cars, airplanes and industrial machines. Tata Technologies is a subsidiary of Tata Motors and a part of Tata Group. In a spectacular return after a two-decade hiatus, Tata Technologies has created a buzz in the Indian stock market, skyrocketing 180 per cent on its opening day. 

Listed at an IPO price of ₹500 per share, the engineering behemoth soared to ₹1,400, marking a historic debut. The geographical revenue bifurcation for the company shows that India is its leading market with 30 per cent of the revenue in FY23, followed by the UK at 19.5 per cent, North Korea at 21.5 per cent, and Europe at 3 per cent along with the rest of the world at 26 per cent. 

The company prioritises digital transformation and sustainability solutions, aiming for long-term growth, as reflected in its high PE ratio of 79.52. However, moderate growth expectations amidst geopolitical tensions and economic slowdown make it a less appealing option for value investors, despite its debt-free balance-sheet. Hence, we recommend AVOID. 

SpiceJet Ltd. is a major player in both passenger and cargo air transport in India, ranking second domestically with a 13 per cent market share and claiming the same share among domestic competitors internationally – overall the third behind Air India and Indigo. Notably, it also holds the top spot as India’s largest cargo operator. According to the company’s Quarterly Results, its net sales decreased by 26.9 per cent to ₹1,428.8 crore in Q2FY24 compared to Q2FY23. The company reported a net loss of ₹449.4 per cent in Q2FY24 compared to net loss of ₹833.23 per cent in Q2FY23. In its annual results, net sales increased by 34.4 per cent to ₹8,873.6 crore in FY23 compared to FY22. The company reported a net loss of ₹1,513 crore in FY23. Earlier, the company informed that is receiving a major financial boost of over ₹2,240 crore through equity sale and investment from the chairman, paving the way for fleet expansion, infrastructure upgrade and operational improvements. This strategic move strengthens SpiceJet’s financial runway and positions it for a new era of growth in the Indian aviation market. With a substantial 63 per cent gain already bagged, locking in those profits by selling would be a valid risk management strategy. This option becomes particularly attractive for investors prioritising short-term gains and minimising risk in these uncertain times. Hence, we recommend SELL. 

State Bank of India, a 200-year-old titan, dominates the Indian banking scene. This public sector giant, with its headquarters in Mumbai, wears the nation’s largest financial crown and even shines among Fortune 500 stars. Its global reach and vast services cement its status as a true financial behemoth. It is the largest bank in India with over 24,000 branches, reaching every corner of the nation. State Bank of India (SBI) boasts of remarkable market capitalisation exceeding `5.6 lakh crore and an impressive compound annual growth rate (CAGR) of 76.1 per cent in profit over the past five years. 

Committed to rewarding shareholders, SBI maintains a healthy dividend payout of 17.3 per cent. Trading at a PE ratio of 9 times and with a robust ROE of 18.5 per cent, SBI presents itself as an attractive investment proposition. Consistent positive performances in both quarterly and annual results, complemented by a five-year track record of net profit, further solidify its financial stability. SBI’s impressive financial standing makes it a compelling choice for investors seeking a reliable and profitable partner in the Indian market. According to its quarterly results, the bank’s total income increased by 25.7 per cent to ₹144,256 crore and the net profit increased by 10 per cent to ₹16,383 crore in Q2FY24 compared to Q2FY23. 

In its annual results, the total income increased by 16.4 per cent to ₹473,378 crore and the net profit increased by 55.6 per cent to ₹56,558 crore in FY23 compared to FY22. The company’s shareholding is dominated by promoters with a 57.52 per cent stake, followed by DIIs (24.36 per cent), public (7.40 per cent) and FIIs (10.72 per cent). SBI has shown significant stability and growth potential due to its strong brand reputation and extensive network. Its recent financial performance has seen increased profits and declining bad loans. SBI is also investing in digital transformation to improve efficiency and reach new customers. However, we believe that SBI is undervalued based on its price-to-earnings ratio. Hence, we recommend BUY. 

Salasar Engineering Limited, founded in 2006 as a tower manufacturer, has rocketed into a multifaceted infrastructure giant, conquering space not just in the telecom sector but also energy and railways. Beyond mere products, it offers a holistic experience through designing, building, and deploying steel structures with expert precision. The company’s 2017 IPO wasn’t just successful but shattered records by oversubscribing 273 times, thus becoming the most subscribed in Indian history, a testament to its meteoric rise and unwavering commitment to building a stronger world. 

According to its quarterly results, the company’s net sales increased by 6.42 per cent to ₹275.35 crore and the net profit increased by 20.5 per cent to ₹9.05 crore in Q2FY24 compared to Q2FY23. According to the half-yearly results, the net sales increased by 14.5 per cent to ₹537.21 crore and the net profit increased by 29.5 per cent to ₹19.20 crore in H1FY24 compared to H1FY23. As of September 30, 2023, STEL has a strong diversified order book worth ₹1,440 crore, providing strong revenue visibility. 

STEL’s order book comprises domestic EPC orders valued at ₹1,090 crore, international EPC orders worth ₹211 crore, orders under the heavy steel structure division worth ₹130 crore, monopoles worth ₹53 crore, and telecom tower and pole exports worth ₹37 crore. Additionally, STEL receives recurring monthly orders for telecom towers worth approximately ₹30-35 crore. Presently, the shares of the company have a PE of 48 times and an ROE of 12 per cent. 

Therefore, although the company has posted strong financial performance and has the potential for growth in the industrial sector with its sustainable solutions, its PE ratio is high and market volatility could lead to short-term price fluctuations. The company’s revenue is heavily reliant on the industrial sector, and limited analyst coverage may hinder future prospects. Hence, we recommend SELL. 

Zydus Lifesciences Ltd. born from a restructuring exercise in 1995, has blossomed into a global pharmaceutical powerhouse. From its modest beginnings with a turnover of ₹250 crore, the company has achieved remarkable financial growth, exceeding ₹17,237 crore by FY23. According to its management, “This success stems from an unwavering commitment to innovation and a dedication to improving lives. Zydus Healthcare remains focused on addressing unmet healthcare needs, driven by the noble mission of creating healthier and happier communities around the world.” 

According to its quarterly results, the company’s net sales increased by 9 per cent to ₹4,368.8 crore and net profit increased by 52 per cent to ₹779.8 crore in Q2FY24 compared to Q2FY24. Its net sales growth in Q1FY24 was significantly higher than in Q2FY24. While Q1FY24 boasted double-digit growth in both net sales and net profit, Q2FY24 saw a more modest single-digit increase in net sales, though net profit still managed a double-digit jump. 

The company has delivered poor sales growth of 7.68 per cent over the past five years and the stock is trading at 3.67 times its book value. Zydus Lifesciences Ltd. has reduced debt and has been maintaining a healthy dividend payout of 17.8 per cent. The dark side is that the pharmaceutical industry, plagued by high drug prices, questionable pricing practices and allegations of unethical marketing tactics, often leaves patients struggling for access to care. Zydus Lifesciences Ltd, while contributing to affordable medications, has faced controversy over contaminated drugs and misbranded products, raising concerns about patient safety and regulatory compliance. Additionally, the company’s financial performance was poor in the last quarter. Meanwhile, the stock has a PE of 21.9 times, which is less than the industry PE. The volatile stock market could potentially impact its price, and a potential macroeconomic slowdown could affect the pharmaceutical industry. Hence, we recommend SELL. 

Bharat Heavy Electricals, a government-owned organisation, reigns as India’s leading engineering and manufacturing giant, specialising in power plant equipment and catering to crucial sectors like power, transmission, industry, transport, renewable energy, oil and gas, and even defence, through an extensive spectrum of design, engineering, manufacturing and support services. According to its quarterly results (Q2FY24), the company’s net sales increased 1.2 per cent year-on-year to ₹4,009.1 crore from ₹3,961.6 crore in Q2FY23 while the operating profit increased by 22.2 per cent to ₹1,151.2 crore from ₹942.1 crore in Q2FY23. 

Its net profit increased 27 per cent to ₹780.8 crore in Q2FY24 compared to ₹614.8 crore in Q2FY23. In its annual results, net sales increased by 15.4 per cent to ₹17,734.4 crore in FY23 as compared to ₹15,368.2 crore in FY22. The operating profit increased by 22.2 per cent from ₹3,572.4 crore in FY22 to ₹4,366.7 crore in FY23. The net profit increased by 25 per cent to ₹2,940.4 crore in FY23 compared to ₹2,354.5 crore in FY22. Recently, the company has bagged huge orders from the Ministry of Defence. 

BEL has cumulatively received orders worth ₹23,176 crore excluding taxes in the current financial year 2023-24. With strong momentum and potential for further orders from the Ministry of Defence. As of September 30, 2023, the company’s order book was at over ₹68,000 crore which includes hundreds of small or medium-sized orders. BEL is planning capital expenditure of approximately ₹700–800 crore. The company’s rising stock price suggests positive market sentiment and potential future growth. Securing new contracts with the Indian Army strengthens BEL’s order book and suggests revenue growth. Its strong fundamentals, profitability and high demand in the defence sector make it a stable and growth-oriented enterprise. Government support and resource access also contribute to its stability. Hence, we recommend BUY.

(Closing price as of January 20, 2024)