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ACC Limited is one of India’s leading producers of cement and ready-mix concrete. It has 17 cement manufacturing sites, 82 concrete plants and a nationwide network of over 50,000 channel partners to serve its customers. The company’s quarterly consolidated financials reveal that net sales for Q1FY23 grew by 15.30 per cent on a YoY basis to ₹ 4,393.27 crore. Operating profit for Q1FY23 came in at ₹ 480.09 crore, down by 47.52 per cent in comparison to ₹ 914.88 crore recorded in Q1FY22. Q1FY23 net profit also fell by 60.61 per cent from ₹ 566.18 crore in Q1FY22 to ₹ 223 crore in Q1FY23 on account of moderation in demand and surge in the overall cost of production. On the annual consolidated front, net sales for CY22 stood at ₹ 15,814.40 crore, exhibiting a growth of 17.26 per cent relative to ₹ 13,486.83 crore registered in CY21. Operating profit recorded healthy YoY growth of 24.61 per cent from ₹ 2,571.85 crore in CY21 to ₹ 3,204.79 crore in CY22. Net profit for CY22 came in at ₹ 1,851.45 crore, up by 30.26 per cent versus ₹ 1,421.33 crore in CY21. As on March 31, 2022, ACC’s total installed capacity was 36 million tons per annum (MTPA). Its nationwide presence safeguards operations from demandsupply imbalances and regional price volatility. The company has a fundamentally strong balance-sheet along with healthy cash flows and dividend payout. Hence, we recommend HOLD. 

Varun Beverages Limited is a key player in the beverage industry produces and distributes a wide range of carbonated soft drinks (CSDs). The company’s quarterly consolidated financials reveal that the net sales and other operating profit for Q1FY23 were to the tune of ₹ 5,017.58 crore as compared to the net sales and other operating profit of ₹ 2,483.04 crore for Q1FY22, rising massively beyond 100 per cent. Operating profit for Q1FY23 was at ₹ 1,261.09 crore, recording an increase of 111.87 per cent as compared to net sales of ₹ 595.21 crore in the same quarter last year. The net profit also soared up cheerfully standing at ₹ 802.01 crore since the same period which was at ₹ 318.80 crore, a 150 per cent rise from Q1FY22. The annual performance of net sales reported is ₹ 8,958.29 crore for FY22, which has increased by 36.65 per cent from last year’s value of ₹ 6,555.79 crore. The operating profit for FY22 stood at ₹ 1,722.57 crore as compared to ₹ 1,238.84 crore for FY21, an increase of 39.05 per cent. The company has more than doubled the net profit at ₹ 746.05 crore for FY22 as compared to net profit of ₹ 357.27 crore for FY21. It has recorded an outstanding performance indeed on a quarterly basis and bears a huge scope of growth owing to its strategy towards expanding the distribution network into new territories to add to its market share. We recommend BUY.

Gujarat Gas Limited is India’s largest city gas distribution (CGD) company in terms of sales volume with 27 CGD licenses spread across 44 districts in six states and one union territory which accounts for ~9 per cent of total CGD licenses and ~6 per cent of total areas authorised by PNGRB in India and one transportation pipeline license. The company is engaged in the distribution of natural gas (piped and compressed). It has an expanse of around 1.75 lakh square kilometres of licensed area under its umbrella and supplies natural gas to more than 17 lakh residential consumers and over 13,400 commercial customers. 

The company has erected or commissioned 711 CNG stations which provide clean energy solutions to over 4,300 industrial units. The company’s quarterly consolidated financials reveal that net sales for Q1FY23 grew by a whopping 72.51 per cent on a YoY basis to ₹ 5,303.23 crore. Operating profit for Q1FY23 came in at ₹ 625.61 crore, down by 15.74 per cent in comparison to ₹ 742.47 crore recorded in Q1FY22. On similar lines, net profit also fell by 19.60 per cent from ₹ 474.05 crore in Q1FY22 to ₹ 381.12 crore in Q1FY23. On the annual consolidated front, net sales for FY22 stood at ₹ 16,787.35 crore, exhibiting a growth of 66.92 per cent relative to ₹ 10,057.10 crore registered in FY21. 

Operating profit recorded marginal YoY growth of 0.53 per cent from ₹ 2,155.77 crore in FY21 to ₹ 2,167.17 crore in FY22. Net profit for FY22 came in at ₹ 1,285.75 crore, up by 1.38 per cent versus ₹ 1,268.26 crore in FY21. The Government of India wants to make India a gas-based economy by boosting domestic production and has set a target to raise the share of gas in its primary energy mix to 15 per cent by 2030. Gujarat Gas has a dominant market position particularly in Gujarat, the largest natural gas-consuming state in the country, on account of its high level of entry barriers, first-mover advantage in major areas and continual infrastructure development. The company has also been expanding its horizon by venturing into new geographic areas. Hence, we recommend HOLD.

Gland Pharma has grown over the years from a contract manufacturer of small volume liquid parenteral products to become one of the largest and fastest growing generic injectables manufacturing companies with a global footprint across 60 countries. The company operates primarily under a business-to-business (B2B) model and has an excellent track record in pharmaceutical research and development, manufacturing and marketing of complex injectables. 

The company’s quarterly consolidated financial results reveal that the operating profit for Q1FY23 was ₹ 3,44.31 crore as compared to ₹ 498.12 crore for Q1FY22, a decrease of 30.88 per cent. Net sales for Q1FY23 stood at ₹ 856.90 crore, recording a degrowth of 25.74 per cent as compared to ₹ 1,153.9 crore in the same quarter last year. The net profit was ₹ 229.17 crore, which was reported to be ₹ 350.65 crore in Q1FY22, squeezing by 34.64 per cent. 

On an annual basis, the company reported a positive performance of net sales with ₹ 4,400.71 crore for FY22, zooming 27.08 per cent from the previous year’s value of ₹ 3,462.88 crore. The operating profit reached ₹ 1,734.09 crore as compared to ₹ 1,437 crore for FY21, which has increased by 20.67 per cent. The net profit made was ₹ 1,211.66 crore for FY22 as compared to net profit of ₹ 996.96 crore for FY21, a decent rise of 21.54 per cent. The quarterly performance of the company, considering other financial aspects, shows that it has been able to maintain profitability despite the supply chain disruptions. 

The net worth and net cash balances have improved on a YoY basis in FY22 as compared to FY21. The company is also focusing on capital efficiency and heightening new capacities. It is also investing in new manufacturing lines in technologies involving microspheres and combi-vials to support its complex development portfolios. Considering the growth drivers for the company’s future on the front of geographical expansion and portfolio development, we recommend HOLD. 

Forbes & Company, established in 1919, is one of the oldest companies of the world that is still in business. The company traces its origin to the year 1767 when John Forbes of Aberdeenshire, Scotland, started his business in India. Over the years, the management of the company moved from the Forbes family to the Campbells, to the Tata Group and finally to the well-known Shapoorji Pallonji Group. They are leaders in infrastructure, construction and real estate businesses, amongst many others. Forbes & Company has three main businesses: engineering, shipping and logistics and business automation. 

It serves a wide range of industry segments from refineries to chemical/process plants and sugar manufacturing units, pharmaceuticals, paper, food processing, oil production, carbon black, steel plants, cogeneration plants, etc. The company’s quarterly consolidated financials reveal that the operating profit for Q1FY23 was ₹ 208.66 crore as compared to the operating profit of ₹ 6.21 crore for Q1FY22, which has improved by 3,260.06 per cent. Net sales for Q4FY22 were at ₹ 121.85 crore, recording a decrease of 6.36 per cent as compared to net sales of ₹ 130.12 crore in the same quarter last year. The net profit has also been on the lower side and stands at ₹ 143.84 crore since the net loss incurred for the same period last year which was at ₹ 6.73 crore. 

The annual performance of net sales reported is ₹ 514.73 crore as compared to last year’s value of ₹ 932.42 crore. The operating profit for FY22 stood at ₹ 83.88 crore as compared to ₹ 210.93 crore for FY21, a decrease of 60.23 per cent. The company has delivered net profit of ₹ 4,212.76 crore for FY22 as compared to the net loss of ₹ 121.43 crore for FY21. The company has recently incorporated its wholly owned subsidiary company in the name of Forbes Precision Tools and Machine Parts Limited on August 30, 2022. The company has successfully managed to reduce its debt component and has been consistently improving its profit margins. Hence, we recommend HOLD.

GIC was formed for the purpose of superintending, controlling and carrying on the business of general insurance. As soon as GIC was formed, the Government of India (GOI) transferred all the shares it held of the general insurance companies to GIC. Simultaneously, the nationalised undertakings were transferred to Indian insurance companies. The company provides reinsurance across many key business lines including fire (property), marine, motor, engineering, agriculture, aviation/space, health, liability, credit and financial and life insurance. As a sole reinsurer in the domestic reinsurance market, it provides reinsurance to the direct general insurance companies in the Indian market. 

The company’s quarterly consolidated financials reveal that the operating profit for Q1FY23 was ₹ 1,025.69 crore as compared to the operating loss of ₹ 1,510.96 crore for Q1FY22. Net sales for Q4FY22 were at ₹ 10,734.29 crore, recording a decrease of 3.42 per cent as compared to net sales of ₹ 11,113.95 crore in the same quarter last year. The net profit has also been on the lower side and stands at ₹ 708.85 crore since the net loss incurred for the same period last year which was at ₹ 1,117.89 crore. The annual performance of net sales for FY22 reported is ₹ 39,556.83 crore compared to last year’s value of ₹ 39,984.66 crore. The operating profit for FY22 stood at ₹ 3,754.65 crore as compared to ₹ 3,069.31 crore for FY21, an increase of 22.33 per cent. The company has delivered net profit of ₹ 2,198.76 crore for FY22 as compared to net profit of ₹ 1,824.99 crore for FY21, which is a worthy gain of 20.48 per cent. 

The company is almost debt-free and is expected to give a better performance in the future. It has made a provision of ₹ 163 crore for equity investments for the upcoming quarters. The company is also aggressively pruning its portfolio in order to reduce underwriting losses in loss-making areas. The company hopes that this move will make its balance stronger and improve its margins in the upcoming quarters. Hence, we recommend HOLD. 

(Closing price as of Sept 20, 2022)