Query Board

This section gives decisive investment rationales to our subscribers on the stock queries they have raised to our research team.

Prince Pipes and Fittings Private Limited is recognised as one of the leading polymer pipes and fittings manufacturers in India in terms of number of distributors. It currently manufactures polymer pipes using four different polymers viz. UPVC, CPVC, PPR and HDPE and fittings using three different polymers viz. UPVC, CPVC and PPR. The company’s quarterly consolidated financials reveal that the operating profit for Q4FY22 was ₹140.61 crore as compared to ₹151.29 crore for Q4FY21, a decrease of 7.06 per cent. Net sales for Q4FY22 were at ₹901.20 crore, recording a decrease of 18.37 per cent as compared to ₹761.36 crore in the same quarter last year. The net profit has also reduced and stands at ₹88.23 crore which was at ₹97.22 crore in Q4FY21, down by 9.24 per cent. The annual performance of net sales is ₹2,656.83 crore for FY22, which has increased by 28.26 per cent from last year’s value of ₹2071.52 crore. The operating profit stood at ₹421.08 crore as compared to ₹379.23 crore for FY21, which has increased by 11.04 per cent. The net profit was at ₹249.40 crore for FY21 as against net profit ₹221.83 crore for FY21, a marginal rise by 12.43 per cent. The company expects the recent softening in resin prices to boost agricultural demand. It promises to focus on retail distribution expansion, new product launches, and increased penetration in the project sales. Hence, we recommend BUY. 

Ashoka Buildcon Ltd. is engaged in engineering, procurement and construction, operations and maintenance of roads and highways. Ashoka Buildcon has worked in many states across the country, and completed prestigious projects for central as well as state governments. The company’s quarterly consolidated financials reveal that the operating profit for Q4FY22 is ₹632.62 crore as compared to ₹524.54 crore for Q4FY21, an increase of 20.6 per cent. Net sales for Q4FY22 were at ₹1,957.29 crore, recording an increase of 12.78 per cent as compared to net sales of ₹1,735.57 crore in the same quarter last year. The net profit has also improved and stands at ₹220.89 crore as against ₹149.63 crore in Q4FY21, a rise of 47.63 per cent. The annual performance of net sales reported is ₹5,945.80 crore for FY22, which has increased by 19.11 per cent from last year’s value of ₹4,991.70 crore. The operating profit stood at ₹1,937.30 crore as compared to ₹1,665.67 crore for FY21, which has increased by 16.31 per cent. The net profit was at ₹760.51 crore for FY21 as against ₹256.04 crore for FY21, a phenomenal rise by 197.03 per cent. Though the company is reporting repeated profits, it is not paying out dividend. Also, the company has low interest coverage ratio and has high cost of borrowing. Hence, we recommend EXIT.

Greenpanel Industries is India’s largest manufacturer of wood panels. Its state-of-the-art manufacturing plants in Uttarakhand and Andhra Pradesh produce medium density fibreboards (MDFs), plywood, block boards, veneers, wood floors and doors. It is a leader within the vast market of India in the manufacture of wood panels. The company’s principal product is MDF and is a market leader in this segment. The company was the erstwhile MDF division of Greenply Industries. It was de-merged on April 1, 2018 into an independent company that focuses largely on the manufacture, distribution and marketing of MDF.

The company is primarily involved in the manufacturing of plywood, medium density fibreboards (MDFs) and allied products. The company has an overseas wholly-owned subsidiary company namely Greenpanel Singapore Pte. Limited, incorporated in Singapore, which is engaged in the trading of medium density fibreboards and allied products. The company’s quarterly standalone financials indicate that net sales for Q4FY22 were at ₹470.08 crore as compared to net sales of ₹388.79 crore for Q4FY21. Operating profit for Q4FY22 stands at ₹141.50 crore as compared to the operating profit in last year’s same quarter which was ₹99 crore, up by 42.93 per cent.

The net profit has also been on the higher side and stands at ₹80.59 crore since the same period last year which was at ₹56.45 crore, a jump of 42.76 per cent. The annual performance of net sales is at ₹1,625.04 crore for FY22, which has increased by 59.2 per cent from last year’s figure of ₹1,020.75 crore. The operating profit in FY22 stood at ₹439.39 crore as compared to ₹112.46 crore for FY21. The company has delivered exceptional net profit of ₹240.47 crore for FY22 as compared to profit after tax of ₹68.81 crore for FY21, reflecting growth of 249.48 per cent. The company plans to expand its MDF capacity at its Andhra Pradesh plant by a tentative 180,000-240,000 cbm. The management expects MDF volume growth of 15-18 per cent in FY23 and 15 per cent in FY24. Hence, we recommend HOLD

Kajaria Ceramics Limited is the largest manufacturer of ceramic and vitrified tiles in India. Equipped with cutting-edge technology, the company strives to deliver quality products and services to its customers. Its team of experts work around the clock to ensure that the quality of its products is never compromised. In order to cater to the specific needs of its customers, the company produces various categories of tiles, including kitchen tiles, bathroom tiles, wall tiles, floor tiles and exterior wall tiles. It aims at producing tiles that complement the distinctive style of its customers and cater to the vast needs of the Indian consumers.

All of its tiles are crafted with intense care using state-of-the-art technology to ensure that they live up to the expectations of its buyers. The choicest of materials are used to produce the company’s magnificent range of products. The consolidated quarterly performance shows net sales and operating income of ₹1,101.75 crore in Q4FY22, which is a 15.67 per cent increase from ₹952.51 crore reported in Q4FY21. The operating profit also squeezed by 12.8 per cent in Q4FY22 to ₹172.97 crore. The quarterly net profit reduced by 25.87 per cent to ₹97.23 crore in Q4FY22 as compared to ₹131.17 crore reported in Q4FY21. The annual performance of net sales increased to ₹3,705.19 crore in FY22 from ₹2,780.90 crore in FY21.

The operating profit climbed by 20.4 per cent to ₹638.26 crore in FY22 as compared to ₹530.12 crore in FY21. The net profit also jumped to ₹382.74 crore in FY22 as opposed to ₹308.90 crore reported in FY21. We continue to like KJC for its market share gain and healthy margin in the tiles segment (a function of its robust distribution and cost controls) and its fast expansion in the bath ware and ply businesses. It expanded its tiles capacity by ~20 per cent in Q1FY23, which will boost its volume growth. It is also acquiring a 51 per cent stake in a Telangana-based floor tiles company (capacity of 4.79 MSM) by the end of FY23 to increase its foothold in the southern market. Hence, we recommend BUY.

HG Infra Engineering is an infrastructure construction, development and management company with extensive experience in its focus area of road projects, including highways, bridges and flyovers. The company’s main business operations include providing engineering, procurement and construction (EPC) services on a fixed-sum turnkey basis and undertaking civil construction and related infrastructure projects on item rate and lump sum basis, primarily in the roads and highway sector. It has also forayed into executing water pipeline projects and is currently undertaking two water supply projects in Rajasthan on turnkey basis.

The company’s quarterly consolidated financials reveal that the operating profit for Q4FY22 was ₹195.06 crore as compared to ₹199.98 crore for Q4FY21, a decrease of 2.46 per cent. Net sales for Q4FY22 were at ₹249.40 crore, recording an increase of 12.43 per cent as compared to ₹221.83 crore in the same quarter last year. The net profit has reduced and stands at ₹103.95 crore which was at ₹111.11 crore in Q4FY21, down by 6.44 per cent. The annual performance of net sales is ₹3,751.43 crore for FY22, which has increased by 43.75 per cent from last year’s value of ₹2,609.72 crore. The operating profit stood at ₹717.42 crore as compared to ₹490.59 crore for FY21, which has increased by 46.24 per cent.

The net profit was at ₹380.04 crore for FY21 as against net profit ₹236.65 crore for FY21, a marginal rise by 60.59 per cent. The company secured orders worth ₹4,328 crore during the year comprising road projects (EPC and HAM). As of March 31, 2022, the company has 35 projects comprising nine HAM and other EPC projects spread across nine states with Odisha and Telangana forming 28 per cent and 20 per cent of the total order book. The company is strategically positioned to grow by taking advantage of favourable industry tailwinds brought on by the government’s emphasis on infrastructure development, particularly for highways, expressways and other road projects. Hence, we recommend BUY.

Devyani International is the largest franchisee of Yum! Brands in India and is among the largest operators of chain quick service restaurants (QSR) in India on a non-exclusive basis, operating 655 stores across 155 cities in India as of March 31, 2021 and 696 stores across 166 cities in India as of June 30, 2021. Yum! Brands Inc. operates brands such as KFC, Pizza Hut and Taco Bell and has presence globally with more than 50,000 restaurants in over 150 countries, as of December 31, 2021. In addition, it is a franchisee for the Costa Coffee brand and stores in India.

The company’s quarterly consolidated financials reveal that the operating profit for Q4FY22 was ₹142.06 crore as compared to ₹102.26 crore for Q4FY21, an increase of 38.92 per cent. Net sales for Q4FY22 were at ₹590.75 crore, recording an increase of 36 per cent as compared to ₹433.10 crore in the same quarter last year. 

The net profit has also reduced and stands at ₹75.94 crore which was at ₹62.17 crore in Q4FY21, up by 22.14 per cent. The annual performance of net sales is ₹2,084.01 crore for FY22, which has increased by 83.64 per cent from last year’s value of ₹1,134.84 crore.

The operating profit stood at ₹488.57 crore as compared to ₹250.66 crore for FY21, which has increased by 94.91 per cent. The net profit was at ₹1,155.12 crore for FY21 as against net loss of ₹62.99 crore for FY21. DIL has shown a resilient performance in a challenging macro environment and continues to add stores in core brands, thus helping the company grow at a faster rate. DIL’s focus on new products and innovative campaigns coupled with efficient sourcing strategy will help it to register strong growth in the years to come. However, the stock is trading 28.77 times its book value and seems to be overvalued. Hence we recommend AVOID.