Sel Manufacturing Company

SEL Manufacturing 

I have 375 shares of SEL MCL bought at Rs.47. What should I do ? - D.Balasubramanian 

Company is a multi-product textile company engaged in the manufacturing, processing and trading of fabric, yarn and ready-made clothes. The company also produces T-shirts, inner wears, tops and knitted garments. It caters to the clothing requirements for women, men and kids. The company's manufacturing facilities are in Punjab, Madhy Pradesh and Himachal Pradesh. The company exports a majority of their produce to Russia and the UAE. . On the financial front, the company has not reported its Q4FY18 results. Looking at the results of third quarter of FY18, the numbers are depressing. The net sales of the company has decreased from Rs.433.90 crore in third quarter of FY17 to Rs.237.01 crore in the same quarter of FY18. The net loss of the company has increased from Rs.20.18 crore in the third quarter of FY17 to Rs.223.16 in the same quarter of FY18. The interest of the company stood at Rs.71.64 crore in Q3FY18 as against Rs.11.69 crore in the third quarter of the financial year.

On the annual front, the company posted a drop in net sales, falling to Rs.1710.62 crore in FY17 from Rs.1947.73 in FY16. The net loss of the company has increased from Rs.401 crore in FY17 to Rs.557.55 in FY16. The share price of the company has been falling. Thus we recommend our readers to EXIT the stock.

WEST COAST PAPERS

Can I buy shares of West Coast Papers ? If yes, then at what price? - Venkat 

 West Coast paper Mills produces paper and paperboard. The company's mill is located at Dandeli in Karnataka and serves to the various needs of the companies belonging to the segments of printing, writing, publishing, notebooks and stationary as well as to packaging sectors in India. On the financial front, the company's net sales for the Q4FY18 stood at Rs.493.57 crore, as against Rs.473.30 crore in the same quarter of the previous fiscal, recording a growth of 4.22 per cent in the net sales of the company. The PBDT of the company has increased from Rs.92.20 crore in Q4FY17 to Rs.112 crore in the fourth quarter of FY18. The net profit of the company has increased by 55.3 per cent in Q4FY18 as it recorded net profit of Rs.78.78 crore in Q4FY18, as against Rs.50 crore in the same quarter of the previous year. On the annual front in FY18, the company's net sales decreased by 2.95 per cent from Rs.1762.91 crore in FY17 to Rs.1710 crore in FY18. The PBDT of the company grew from Rs.288.65 crore in FY17 to Rs.338.78 crore in FY18, which represent a growth of 17.3 per cent in a year. The net profit of the company has increased by 74 per cent in 2018 from Rs.128 crore in FY17 to Rs.223 crore in FY18.

We would recommend our readers to HOLD the stock if already bought, but would not recommend fresh buying in the stock.

GENESYS INTERNATIONAL 

I hold 150 shares of Genesys International bought at the rate of Rs.299 per share. Please advise whether to hold the shares or not. - V R Srinivas 

 Genesys International Corporation is engaged in computer programming, consultancy and related activities. The company offers geographical information system (GIS) based services comprising of photogrammetry, cartography, data conversion, terrestrial and three-dimensional geo-content, including location and other computer-based and related services. The company operates seven geospatial production and software development centres in India. The company is engaged in designing and developing complex location-based products and solutions for enterprises, government and consumers. In May 2018, the company was awarded the prestigious TAPI mapping against international competition. The project win is an extension of its expertise in handling complex and mission-critical mapping projects in the infrastructure space using latest mapping technologies.

On the financial front, Genesys posted 81 per cent increase in its net sales to Rs.31.06 crore in the fourth quarter of FY18 as compared to Rs.17.08 crore in the same quarter of the previous year. The company 's PBDT increased by 50 per cent to Rs.9.5 crore in the fourth quarter of FY18 on a year-on-year basis. Also, the net profit of the company increased by over 19 per cent to Rs.6.06 crore in the fourth quarter of FY18 as compared to Rs.5.06 crore in the same quarter of the previous fiscal.

On an annual basis, the company posted a 55 per cent increase in its net sales to Rs.118.89 crore inFY18 as compared to Rs.76.68 crore in FY17. The PBDT of the company increased by over 63 per cent to Rs.45.22 crore in FY18 as against Rs.27.72 crore in FY17. The company posted an increase of 65 per cent in its net profit to Rs.31 crore in FY18 on a year-on-year basis. On the valuation front, the company has a price-to-earnings ratio of 21.95x. It has posted return on equity (ROE) of 7.29 per cent and return on capital employed (ROCE) of 27.38 per cent. The company has a debt-to-equity ratio of 0.06x. The stock is likely to oversome its short term aberrations. We recommend our reader-investors to HOLD the stock.

VA TECH WABAG

I am holding 50 shares of VA Tech Wabag at Rs.516 per share. The stock is on a decline. What should I do? - V R Srinivas 

 VA Tech Wabag is a holding company engaged in the business of water treatment. The company's principal activities include design, supply, installation, construction and operational management of drinking water, waste water treatment, industrial water treatment and desalination plants. The company's product portfolio includes water reclamation, municipal used water treatment, industrial effluent treatment, anaerobic sludge treatment and industrial water reuse and recycling. The company has four clusters: India, Europe, Middle East & Africa, and Latin America. Its India cluster provides end-to-end water solutions for drinking water and waste water plants, both in the municipal as well as industrial sectors.

On the financial front, Va Tech Wabang posted a 24 per cent decline in its net sales to Rs.534.5 crore in the fourth quarter of FY18 as compared to Rs.703.7 crore in the same quarter of the previous year. The company 's PBIDT decreased by 14.63 per cent to Rs.46.49 crore in the fourth quarter of FY18 on a year-onyear basis. Also, the net profit of the company declined by over 7 per cent to Rs.26.48 crore in the fourth quarter of FY18 as compared to Rs.28.61 crore in the same quarter of the previous fiscal. On an annual basis, the company posted a 3.22 per cent decline in its net sales to Rs.1856.33 crore in FY18 as compared to Rs.1798.38 crore in FY17. The PBIDT of the company declined by over 5 per cent to Rs.201.98 crore in FY18 against Rs.473.10 crore in FY17. The company posted an increase of 56.21 per cent in its net profit to Rs.117.13 crore in FY18 on a year-on-year basis.

On the valuation front, the company has a price-to-earnings ratio of 14.43x. It has posted return on equity (ROE) of 10.70 per cent, return on capital employed (ROCE) of 25.76 per cent and debt-to-equity ratio of 0.32x. The company has been maintaining a healthy dividend payout of 21.69 per cent. The stock is likely to gain in the coming period.

We recommend our reader-investors to HOLD the stock.

SIL INVESTMENT

I have some shares of SIL Investment at Rs.510. The stock is currently trading at Rs.238.35. Should I keep holding the stock for the long term or book my loss? -John Jacob 

 SIL Investments Limited is a non-banking financial company registered with RBI since 2009. The company focuses on two broad categories, namely, commercial finance and investments. The commercial finance includes inter-corporate deposits. The core investments of SIL are mainly in shares, securities and real estate.

The company has investments in financially sound companies and has immovable properties in Maharashtra, Uttar Pradesh and other states. The company is expected to continue to earn good dividend and rent income. The company's subsidiaries include RTM Investment & Trading Co Ltd, SCM Investment & Trading Co Ltd, RTM Properties Limited and SIL Properties Limited.

On the financial front, the net sales of SIL Investments increased tremendously from Rs.6.74 crore in Q4FY17 to Rs.46.4 crore in Q4FY18. The company 's PBDT soared to Rs.44.61 crore in the fourth quarter of FY18 from Rs.3.28 crore in the fourth quarter of FY17. Also, the net profit of the company increased hugely to Rs.35.05 crore in the fourth quarter of FY18 from Rs.2.79 crore in the same quarter of the previous fiscal. On an annual basis, the company posted significant growth in net sales from Rs.29.65 crore in FY17 to Rs.168.68 crore in FY18. The PBDT of the company increased from Rs. 20.30 crore in FY17 to Rs.161.84 crore in FY18. The company posted tremendous growth in its net profit to Rs.128.80 crore in FY18 from Rs.20.30 crore in FY17.

On the valuation front, the company is trading at a price-toearnings ratio of 1.50x. It has posted a return on equity (ROE) of 8.78 per cent and a return on capital employed (ROCE) of 19.28 per cent. The company has a debt-to-equity ratio of 0.35x. The market value of its investments of about Rs.492 crore is more than the market capitalisation of the company (about Rs.192.97 crore).

The stock is trading at 0.58 times its book value. We recommend our reader-investors to HOLD the stock.

RURAL ELECTRIFICATION CORP.

I have bought 225 shares of Rural Electrification Corporation at Rs.148 . Kindly suggest your advise on the stock. - LSS Kumar 

 Rural Electrification Corporation Limited finances and promotes rural development through electrification projects across India. It provides loans to both central and state sector power utilities, rural electric cooperatives, NGOs and private power developers as well. The company was founded in 1969 when India faced critical drought situation. The main objective of the company was to boost agriculture by helping the state electricity boards to energise the pump sets across India. Apart from this, the company provided finance to hasten the pace of rural electrification.

On the financial front, the company's net sales for Q4FY18 declined slightly to Rs.5444.59 crore as against Rs.5717.39 crore in the fourth quarter of the previous financial year. The company is performing consistently. In terms of PBDT, the company posted a 32.9 per cent drop, falling from Rs.1,888 crore in Q4FY17 to Rs.1,266 crore in Q4FY18. The net profit has also taken a hit, declining to Rs.834.79 crore in Q4FY18 as against Rs.1319 crore in the same quarter of FY17.

On the annual front, the company has remained stable and the drop in net sales was just 5 per cent from Rs.22935 crore in FY17 to Rs.21748 crore in FY18. The PBDT of the company has also declined from Rs.8865 crore in FY17 to Rs.6857 crore in FY18. The net profit of the company has also slipped by 25 per cent in FY2017-18. The company's FY18 earnings were impacted due to the conservative application of RBI's reclassification norm. Although the performance of the company is not showing good numbers, this is likely just for the short term. There are structural developments across the power value chain through which REC has a huge potential to deliver in the near future.

Keeping the long term in mind, we would suggest our reader investors to HOLD the stock and reap the long term benefits.