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Network 18 Media and Investments Limited (Network 18 Group) is one of India’s most diversified media and entertainment conglomerates with interests across television, digital content, filmed entertainment, e-commerce, print and allied businesses. TV 18 Broadcast Limited, a subsidiary of Network 18, manages its primary business of broadcasting. It runs the largest news network in India, spanning business, general and regional news. Its marquee brands like CNBC-TV 18, News 18 India and CNN News 18 are part of this news bouquet. In Q3FY23, the company’s total income rose by 13.4 per cent from last year’s same quarter to ₹1,900 crore. The company’s continued investments in content led to EBITDA of ₹2 crore for the quarter ended December 2022, compared with ₹373 crore a year ago. Its consolidated net profit was ₹9 crore compared to ₹307 crore in the corresponding period of the last fiscal year. Viacom 18 took a big step towards scaling up its digital business with FIFA World Cup as more than 110 million viewers tuned in to watch the football spectacle on the Jio Cinema app. Viacom 18 further expanded its sports portfolio with addition of Women’s IPL, SA 20, South Africa cricket and Olympics 2024 rights. The viewership share of entertainment network increased 50 bps to 10.5 per cent in the non-news genre. Hence, we recommend HOLD.






Deep Diamond India has been in business for nearly 30 years, offering a diverse range of 18 K real diamond jewellery to men and women. Taking into account the company’s quarterly performance, it reported a growth of 232.3 per cent from ₹0.45 crore registered in Q3FY22, recording total revenue of ₹1.50 crore in Q3FY23. When comparing the net profit for the third quarter of FY23 to the same quarter last year, it is found to have soared to ₹0.61 crore. 

In terms of annual performance, the company’s net profit grew to ₹0.20 crore from a loss of ₹0.05 crore the year before. Also, net sales climbed by 172.41 per cent to ₹1.39 crore as against ₹0.51 crore during the previous year ended March 2021. At the time of writing, the company had a very modest market value of ₹50 crore, with the promoter owning less than 1 per cent of the equity, which is a cause for worry. According to BSE data, the stock’s price-to-earnings (PE) ratio is extremely high but its return ratios such as ROE and ROCE, which indicate profitability, are low in comparison to those of its competitors. We advise you to look for co mpanies in the same industry that are available at much lower valuations and have better growth and return ratios. As a result, in the case of Deep Diamond India, we recommend AVOID. 






The Government of India incorporated Rail Vikas Nigam Ltd. in 2003 and it is engaged in the business of installing various rail infrastructure projects such as doubling, gauge conversion, new lines, railway electrification, bridges, and workshops and production units into action. According to the concession agreement made with the Ministry of Railway, it also shares freight revenue with the Indian Railways. Taking into account the company’s quarterly performance, on a consolidated basis it reported growth of 21.94 per cent from ₹4,025.82 crore registered in Q2FY22, recording total revenue of ₹4,908.90 crore in Q2FY23. It has reported strong EBITDA growth of 39.13 per cent.

When comparing the net profit for the second quarter of FY23 to the same quarter last year, it is found to have increased by a significant 36.52 per cent from ₹279.24 crore to ₹381.22 crore. In terms of annual performance, the net profit surged by 19.27 per cent to ₹1,182.69 crore from ₹991.57 crore the previous year. Also, net sales climbed by 25.82 per cent to ₹19,381.71 crore as against ₹15,403.76 crore during the previous year ended March 2021. At the time of writing, the company had a market value of ₹16,250 crore with the promoter owning a massive 78.20 per cent stake. The company’s strengths are its sizeable promoter holding and strong government backing.

It has the lowest PE and a relatively high ROE and ROCE among its competitors. The company recently announced that it was the lowest bidder for the supply, erection, testing and commissioning of power supply receiving and distribution system, 750 V DC third rail traction electrification and SCADA system for Surat Metro Rail Project Phase I and Ahmedabad Metro Rail Project Phase II. The stock has also enjoyed a strong rally as the company has been awarded back-to-back significant orders and has soared more than 150 per cent in the last six months. As a result, given the stock’s potential for the future, we recommend BUY.



 


Adani Green Energy Limited (AGEL) is one of the largest renewable companies in India with a current project portfolio of 20,434 MW. AGEL is part of the Adani Group’s promise to provide a better, cleaner and greener future for India. Driven by the group’s philosophy of ‘growth with goodness’, the company develops, builds, owns, operates and maintains utilityscale grid-connected solar and wind farm projects. The electricity generated is supplied to central and state government entities and government-backed corporations. On the back of long-term power purchase agreements (PPAs) of 25 years with central and state government entities, AGEL has leveraged its capabilities and expanded its presence across 12 Indian states. 

The company deploys the latest technologies in its projects. In Q2FY23, the company’s total income declined by 38.68 per cent from last year’s same quarter to ₹3,042 crore. Its consolidated net loss was ₹93 crore compared to net profit of ₹91 crore in the corresponding period of the last fiscal year. The company’s management believes that they are on track to meet their renewable energy target of 45 Gigawatt by 2030 led by robust capacity addition, increased visibility of growth with the firm PPAs and consistent operational performance. As per the company’s last conference call transcript, the net debt to EBITDA is about four and a half times, which is quite huge. 

With significant debt on books and rising interest cost scenario globally, it’s difficult to predict how the company plans to tackle the same. Abu Dhabi-based investor Nomura has injected USD 500 million into the company, which is expected to bring down the debt to capital ratio from 95.3 per cent to 60 per cent, which is still considerably high as per global standards. In general, leverage is going to be a major challenge for the Adani Group. For instance, the group as a whole has committed USD 70 billion of investments in green energy by the year 2030. Currently, Adani Green Energy has a debt and equity ratio of 20:1 times, which makes Adani Green Energy the second most leveraged company in Asia. Hence, we recommend AVOID.   

Maharashtra Seamless Limited, incorporated in 1988, is engaged in the business of manufacturing steel pipes and tubes. It is also engaged in power generation. Its seamless pipes manufacturing capacity is 650,000 MT per annum. High-frequency ERW pipes manufacturing capacity is 125,000 MT per annum. Its renewable energy portfolio is 59.5 MW. The company’s quarterly consolidated financial results reveal that net sales and other operating income for Q1FY23 was ₹1,1414.21 crore as compared to ₹951.42 crore for Q1FY22, an increase of 48.64 per cent.

Operating profit for Q1FY23 stood at ₹271.43 crore, recording a growth of 56.48 per cent as compared to ₹173.46 crore in the same quarter last year. The net profit was recorded at ₹183.73 crore in Q1FY23 and ₹101.58 crore in Q1FY22, thus increasing to 80.87 per cent. On an annual basis, the company reported a positive performance of net sales with ₹4,200.29 crore for FY22, zooming 81.96 per cent from the previous year’s value of ₹2,308.34 crore. The operating profit reached ₹723.06 crore in FY22 as compared to ₹552.81 crore for FY21, which rose by 30.8 per cent.

The net profit made was ₹433.31 crore for FY22 as compared to a net profit of ₹147.75 crore for FY21, an increase of 193.27 per cent. India’s capital goods manufacturing industry serves as a strong base for its engagement across sectors such as engineering, construction, infrastructure and consumer goods, amongst others. The shares of Maharashtra Seamless have a PE of 8.16 per cent whereas sectoral PE is 9.59 per cent, ROE of 12.40 per cent and ROCE of 13.58 per cent. In the financial year 2022- 2023, the firm issued bonus shares in a ratio of 1:1 and a dividend of ₹5 per equity share of the face value of ₹5. The compounded sales growth and compounded profit growth are 24 per cent and 30 per cent in the last five years. Hence, we recommend HOLD.  

Karnataka Bank is engaged in providing a wide range of banking and financial services involving retail, corporate banking and para-banking activities in addition to treasury and foreign exchange business. Karnataka Bank is a scheduled commercial bank in the private sector, serving customers across India. It has a presence across the metro, urban, semi-urban, and rural centres. The bank’s quarterly consolidated financial results reveal that the interest earned for Q1FY23 was ₹1.771.05 crore as compared to ₹1,554.28 crore for Q1FY22, an increase of 11.04 per cent.

Total income for Q1FY23 stood at ₹2,031.09 crore, recording a growth of 56.48 per cent as compared to ₹1,829.13 crore in the same quarter last year. The net profit was recorded at ₹411.47 crore in Q1FY23 and ₹125.45 crore in Q1FY22, thus increasing to 228 per cent. Its annual consolidated financial statements reveal that the company has earned interest of ₹6,221.66 crore for FY22, a decrease of 0.17 per cent from the previous year’s value of ₹6,232.41 crore. The total income of the company reached ₹7,175.54 crore in FY22 as compared to ₹7,636.61 crore for FY21, which plunged by 6.04 per cent.

The net profit made was ₹507.99 crore for FY22 as compared to a net profit of ₹482.86 crore for FY21, an increase of 5.29 per cent. The bank’s net profit soared on the back of healthy loan growth and higher margins in the July-September (Q2FY23) quarter. Karnataka Bank has a market capitalisation of over ₹4,500 crore. The stock has a PE multiple of 5.85 whereas the sectoral PE multiple is 19.75. It has revised interest rates on fixed deposits of less than ₹2 crore. As per the website of the bank, the new rates are effective as of January 1, 2023. The bank is now giving a maximum interest rate of 7.30 per cent for the general public and 7.70 per cent for senior citizens on a deposit tenure of 555 days. Hence, we recommend HOLD.