Recommendation from IT Service Management Company and Roasted Coffee Company

The scrips in this column have been recommended with a 15-day investment horizon in mind and carry high risk. Therefore, investors are advised to take into account their risk appetite before investing, as fundamentals may or may not back the recommendations. 
 

DEV INFORMATION TECHNOLOGY LTD

CMP ₹222.90
BSE CODE : 543462
Volume : 3,295
Face Value : ₹10
Target : ₹244-260
Stoploss : ₹202 (CLS)

The company is one of the leading IT enabled services providers, having a remarkable track record of consistently delivering workable and robust solutions. The company’s quarterly consolidated financials reveal that the operating profit for Q1FY23 is ₹2.34 crore as compared to ₹1.74 crore for Q1FY22. Net sales for Q1FY23 were at ₹26.57 crore, recording a jump of 15.42 per cent as compared to net sales of ₹23.02 crore in the same quarter last year. The net profit has soared and stands at ₹1.69 crore against the net profit of ₹0.36 crore recorded in Q1FY22. The company has maintained a healthy dividend ratio of 155 per cent. The PAT and the net profit have been seeing a rise quarter after quarter. FIIs were also buying this stock as was observed in the June quarter. The company’s top-line has improved due to increased focus on products sale on account of better opportunity from a few customers including the government Dev IT has been rated by CARE Rating as ‘CARE SME1’ indicating the highest creditworthiness in relation to other SMEs. Hence, we recommend BUY.

TATA COFFEE LTD

CMP - ₹242.90
BSE CODE : 532301
Volume : 92,806
Face Value : ₹1
Target : ₹267-274
Stoploss  : ₹227 (CLS)

Tata Coffee Ltd. is primarily engaged in the production, trading and distribution of coffee, tea and allied products. It is Asia’s largest integrated coffee company, the second-largest exporter of instant coffee, and the foremost producer of specialty coffee in India. The company’s quarterly consolidated financials reveal that the operating profit for Q1FY23 is ₹120.46 crore as compared to ₹95.61 crore for Q1FY22. Net sales for Q1FY23 were at ₹662.23 crore, recording a jump of 24.33 per cent as compared to net sales of ₹532.65 crore in the same quarter last year. The net profit has soared and stands at ₹65.49 crore against the net profit of ₹46 crore recorded in Q1FY22, an increase of 42.33 per cent. The company has been witnessing a robust order book both in India and Vietnam coupled with favourable weather for coffee production. The company is also facing the heat of rising fuel and power prices but remains optimistic about the revenue growth and production of tea, coffee and green bean businesses. Hence, we recommend BUY.

(Closing price as of Sept. 05, 2022)