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Foseco India Limited is engaged in the manufacture of products used in the metallurgical industry which are in the nature of additives and consumables that improve the physical properties and performance of castings. Foseco India is a leading supplier of consumable products, solutions and associated services. The company’s key products and services include industrial dry powders, coating products, resin products, ceramic filters and exothermic sleeves. For the quarter ended December 2022, the company’s standalone sales rose by 20.86 per cent from last year’s same quarter to ₹105.71 crore. The EBITDA level stood at ₹60 crore, witnessing a spike of 60 per cent from the December 2021 quarter. The company’s net profitability shot up by more than 51 per cent from the corresponding quarter last year to ₹12.26 crore. The company is currently trading at very high valuations in terms of PE and PB ratio. Moreover, it has also delivered poor sales growth of 3 per cent over the past five years. The compounded profit growth has also not shown any positive signs as it showcased a growth of only 8 per cent in five years. Several stocks in the chemical sector are actually much better to invest in when valuation and growth aspects are considered. Given the overall scenario of the operations of the company and the prospects that lie ahead, the stock does not seem to be very attractive. Hence, we recommend AVOID. 

 

 

Vedanta Ltd. is a leading global natural resources conglomerate. With interests in oil and gas, zinc-leadsilver, aluminium, iron ore, steel, copper, power and semiconductors, it is a diversified company across the natural resources’ spectrum. The company contributes about 1.4 per cent of India’s GDP. Recently, the company was chosen as a preferred bidder and has managed to secure numerous orders. On a consolidated basis, the company’s financial performance reveals that its revenue remained relatively flat from the ₹34,097 crore recorded in Q3FY22 to ₹34,102 crore recorded in Q3FY23. Comparing the net profit for the third quarter of FY23 to the same quarter last year, it sharply fell by more than 40 per cent from ₹4,164 crore to ₹2,464 crore. In contrast, when considering the company’s annual performance, net profit skyrocketed 62.06 per cent to ₹18,802 crore from ₹11,602 crore the year before. The performance of the metals and mining industry was adversely affected by higher coking coal prices and increased input costs. However, the long-term outlook for the industry is optimistic owing to the reopening of the Chinese market. Significant promoter holding, low PE, stronger ROE and ROCE and attractive earnings per share (EPS) are in favour of the company. Given the stock’s 52-week high of ₹440.75 on the BSE, it has a chance to grow further. Hence, we recommend HOLD. 

 

CRISIL Ltd. is a globally diversified analytical company that provides ratings, research, risk and advisory services. It is India’s leading ratings agency and the provider of high-end research to major banks and corporations. Some of the sectors that the company covers include automobile, energy, financial, infrastructure, IT, media, travel, healthcare and retail. Considering the yearly performance, on a consolidated basis the net profit of the company soared 21.16 per cent to ₹564.39 crore as against ₹465.81 crore during the previous year. Also, net sales climbed by 20.34 per cent to ₹2,768.72 crore as against ₹2,300.69 crore during the previous year ended on December 2021. 
 

The company’s profitability is reflected in healthy ROE and ROCE levels as well as outstanding EPS, whereas a high PE ratio is a cause for concern. CRISIL is among the stocks that offered shareholders sizeable dividend payouts. For many years, the company has distributed a healthy dividend in each financial quarter. The board of directors of the company has recommended final dividend of ₹23 per equity share of face value of ₹1 each, (2,300 per cent) for the financial year ended December 31, 2022, subject to the approval of the shareholders at the annual general meeting. 
 

The total dividend amount distributed in the year 2022 was ₹40 per share, which is 4,000 per cent of the face value of ₹1 per share. Dividend investing is a strategy for purchasing shares of companies that reward shareholders with regular cash distribution as a benefit of shareholdings. The dividend yield is a financial ratio that explains the amount of annual dividend payments a company makes in relation to its stock price. In this case, the company’s dividend yield is less than 1.5 per cent, providing a return that is lower than that of a savings account. There are other stocks that offer a higher dividend yield. As a result, we recommend AVOID.   

 

Indian Railway Finance Corporation (IRFC) serves as the financing subsidiary of the Indian Railways, which is a Government of India enterprise operating under the Ministry of Railways. The company primarily engages in borrowing funds from the financial markets to support the acquisition or creation of assets, which are subsequently leased out to Indian Railways. The company follows a leasing model to finance the rolling stock assets and project assets of Indian Railways. The lease period is typically for 30 years, comprising a primary component of 15 years followed by a secondary period of 15 years.
 

For the quarter ended December 2022, the company’s standalone net sales rose by 22 per cent from last year’s same quarter to ₹6,217.96 crore. The EBITDA level rose by 21.68 per cent from the December 2021 quarter to ₹6,191.51 crore. The company’s net profit increased 2.48 per cent from the corresponding quarter last year to ₹1,633.45 crore. At present, the company’s ROE exceeds 15 per cent while its price-to-book value ratio is less than 1. IRFC’s dividend yield is more than 4 per cent according to information available on the NSE website. It has paid dividends on four occasions since its listing, amounting to ₹3.25 per share. 
 

In the last six months the stock has shown positive positive performance as it has surged more than 29 per cent and close to 14 per cent since its listing on January 29, 2021. In the Union Budget 2023, the finance minister announced a capital outlay of ₹2.40 lakh crore, which is nearly nine times the outlay provided in 2013-2014, indicating positive action for the entire railway industry. The PM Gati Shakti Policy and National Logistics Policy would also get a boost with the enhanced government outlay. Due to the company’s strong financials and sufficient funds to continue operations in 2023-24, no additional capital infusion will be necessary in the upcoming fiscal year. Hence, we recommend BUY.   

 

Vodafone Idea is one of the leading telecom service providers in India. The company is engaged in the business of mobility and long-distance services, and trading of handsets and data cards. The company’s business services include voice business and services, broadband services, content services, enterprise services and other VAS offerings like entertainment, SMS, utility, etc. For the quarter ended December 31, 2022, the net sales of the company rose by 9.3 per cent from last year’s same quarter to ₹10.620.60 crore. The EBITDA level stood at ₹4,218.80 crore, up 9.55 per cent from the December 2021 quarter. The net loss of the company rose by 10.5 per cent from the corresponding quarter last year to ₹7,990 crore. 
 

The total gross debt as of December 31, 2022 was ₹2.22 lakh crore, which included deferred spectrum payment obligations of ₹1.39 lakh crore and the government’s adjusted gross revenue liability of ₹69,910 crore. Its bank and financial institution debt totalled ₹13,190 crore. According to data released by the Telecom Regulatory Authority of India, the company lost 2.47 million subscribers in December while rivals Reliance Jio and Bharti Airtel gained 1.70 million and 1.53 million, respectively. As of December 31, Vodafone Idea had 241.32 million subscribers, of which 86.85 per cent, or 209.58 million, were active. 
 

After converting the company’s interest dues into equity, the government now owns 33.1 per cent of Vodafone Idea, with promoters UK’s Vodafone Group and India’s Aditya Birla Group holding around 32 per cent and roughly 18 per cent, respectively. The company is nearing the end of discussions with various network vendors to finalise its 5G rollout strategy. The company continues to lose subscribers, which has a negative impact on revenue growth. The growth of 4G subscribers has been slow. It requires capital infusion to supplement capital expenditure in order to catch up with peers in terms of 4G coverage. It has yet to announce a timeline for the implementation of 5G. Hence, we recommend AVOID.   

 

Info Edge is a leading online classified company in India with a diverse brand portfolio. It owns a number of brands in various fields, including recruitment, matrimony, real estate, education, and related services such as portals like naukri.com, shiksha.com, 99 acres.com and jeevansathi.com. Taking into account the company’s quarterly performance, on a consolidated basis it reported an outstanding growth of 39.89 per cent from ₹421.42 crore registered in Q3FY22, recording total revenue of ₹589.52 crore in Q3FY23. The company delivered strong revenue growth with a standalone revenue increase of 33 per cent year-on-year, led by 40 per cent growth in the recruitment vertical. When the net earnings for the third quarter of FY23 were compared to the same quarter last year, a significant loss of ₹116 crore was reported. 
 

In terms of annual performance, the consolidated net profit of the company skyrocketed by 800 per cent to ₹12,759.57 crore from ₹1,416.31 crore the previous year. It has reported strong EBITDA growth of 56.17 per cent. Also, net sales climbed by 40.87 per cent to ₹1,589.03 crore as against ₹1,128 crore during the previous year ended on March 2021. At the time of writing, the company had a market value of ₹45,375 crore with the promoters owning 38.05 per cent stake. Institutional investors have a sizeable stake of 49.07 per cent, out of which foreign portfolio investors (FPIs) owned a significant 31.87 per cent.
 

Considering its significantly high revenue contribution from the naukri.com business, signs of a slowdown in IT hiring with supply pressure easing and attrition moderating, the risk factor is high. Although the stock has a high PE ratio, return ratios like ROE and ROCE are also noticeably high, indicating the company’s overall profitability. With a healthy level of earnings per share, the company declared an interim dividend of ₹10 per share in the previous quarter. Considering the price movement, the stock has room to grow as it is well below its 52-week high of ₹4,912.90. Hence, we recommend HOLD