IBS TIMES 224th ISSUE

Introduction to Penny Stocks By: Anwesa Nayak

What are Penny Stocks?

Penny stocks are a sort of market-traded security with a very low market value. Companies with lower market capitalization rates are more likely to offer these instruments. The stock market determines how much a firm is worth, which is referred to as market capitalization. It is defined as the whole market value of a company's stock.

It is calculated by: Market Capitalization= The total number of shares available in the market × The current market price of one share In India, penny stocks are issued by companies with a market capitalization of less than Rs. 5000 crores. A penny stock is a stock issued by a tiny company that trades for less than $5 a share.

These stocks are not highly liquid and are traded infrequently due to their low market capitalization.

Characteristics of Penny Stocks: Every stock, whether it's a blue-chip, a multi-bagger, or a penny stock, has its own set of attributes and characteristics. A penny stock has three fundamental qualities: Penny stocks can generate high returns: Not all penny stocks are doomed to fail. There are a lot of attractive firms being traded for pennies that have solid financials and growth potential. When compared to other types of securities, these equities offer significantly larger returns. Small and micro-cap companies issue these shares, which have a lot of room for growth. As a result, penny stocks are dangerous due to their high sensitivity to market movements. You may produce good returns and watch your initial investment grow by accurately recognizing these companies and investing in them.

However, one should keep in mind that to receive significant returns, you may need to hold your investment for a longer length of time.

Penny stocks are generally low on liquidity: Because many penny stocks are traded over the counter, their liquidity is limited. Penny stocks are rarely the first option of investment for most investors due to their high speculative character. Penny stocks have a relatively low volume of transactions due to this lack of

willingness to participate. As a result, penny stocks are extremely illiquid (that is, it makes it difficult to buy or sell stocks easily whenever you want to, because of low participation). In India, penny stocks are illiquid because the companies that issue them are largely unknown. It becomes difficult to locate people ready to buy these equities, resulting in little assistance during catastrophes.

Penny stocks are Low-cost: In the Indian stock market, a penny stock can go as low as Rs. 0.5 per share. As a result, with a tiny investment, you may buy a large number of stock units from the penny stock list. Penny stocks are those that trade for a very cheap price (not necessarily a poor valuation), frequently less than their face value.

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Companies that trade for less than their face worth have a poor track record of financial performance. Such businesses have a slim chance of reversing their fortunes.

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Short-term traders with a high-risk appetite choose such stocks because they are highly speculative, allowing traders to make speculative wagers and profit from windfall gains in a short period.

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Investors trying to make long-term bets, on the other hand, should avoid such stocks since the upside potential is restricted (due to poor fundamentals), but the downside risk is considerably larger.

Top 10 Penny Stocks in India: COMPANY NAME

INDUSTRY

ALOK INDUSTRIES LTD

TEXTILES

DISH TV INDIA LTD

BROADCASTING & CABLE TV

MOREPEN LABORATORIES LTD MOREPENLAB GMR INFRASTRUCTURE LTD

AIRPORT SERVICES

HFCL

TELECOM CABLES

VODAFONE IDEA LTD

TELECOM SERVICES

JAMMU&KASHMIR BANK LTD

BANKS

BANK OF MAHARASHTRA LTD

BANKS

INDIAN OVERSEAS BANK

BANKS

MMTC LTD

COMM.TRADING & DISTRIBUTION

Should you invest in Penny Stocks?

Penny stocks, like other stock kinds, can be used as a form of investment. When making such investments, however, a potential investor should be cautious. Because of their extreme volatility and minimal liquidity, the stocks are inherently speculative. Penny stocks offer a high return but also a high level of risk. Some high-quality corporate penny stocks have returned multiples of the cash invested more than 100 times. Penny stocks are all about finding highquality firms with strong management at an early stage. Penny stocks can appear appealing due to their incredibly low stock pricing. They can produce great profits, but one should be aware of the risks that come with them. So, before investing in penny stocks, one must do their homework and learn about the company's fundamentals. While penny stocks might be good investment options for most people, they, like other types of equity, come with inherent risks.

Such stocks' price movements can be erratic at times, raising the risk factor. These dangers, however, can be avoided to some extent if you choose the correct penny stock before buying.

Conducting significant fundamental and technical research is one technique to determine a penny stock's legitimacy and potential for money creation. When it comes to penny stock investment, it's best to avoid putting too much stock in other people's opinions or predictions.

One should always do theirr due investigation on the stocks they are considering.

Lloyds Steel By: Palak Kaur “There's never a perfect time to invest in stocks or the stock market, but there is a right time and a wrong time! ― James Pattersenn Jr

Introduction: Lloyds Steel was set up in Mumbai in the year 1974. The company is into the manufacturing of Heavy Equipment, Machinery, and Systems for Hydro Carbon Sector, Oil & Gas, Steel Plants, Power Plants, Nuclear Plant Boilers, and Turnkey Projects. It has a market cap of Rs247 crore and is considered to be a small-cap company. It is listed on both NSE and BSE. It is under the segment of the manufacturing of steel. The employment in the company is of just around 500 people approximately. The main aim of the company is seen to be the production of Sponge Iron and Steel Products. They also look at managing the market trends to their optimum advantage. Their mission is to provide product satisfaction to their customers and also to provide a good working environment to their employees.

Current price

₹3.05 52 weeks high ₹3.90

Book value per share 1.26

52 weeks low

₹0.65

Beta

0.46

Market cap

₹274 crores

P/B

2.42

Volume

1,058,180

P/E

-333

Sector P/E

14.21

Financial Analysis: Financial Year

FY 2016-17

FY 2017-18

FY 2018-19

FY 2019-20

FY 2020-21

Total Revenue (in Crs)

81.89

156.26

107.76

122.76

83.14

EBITDA

2.53

4.27

4.55

5.38

3.06

PBIT

1.4

3.26

3.5

3.81

1.47

PBT

1.09

2.97

3.17

3.27

0.7

Net Income (in Crs)

0.89

2.06

2.89

2.49

0.51

EPS

0.01

0.02

0.03

0.03

0.01

There has been an increase in the values of total revenue, net income, EBITDA, EPS before covid.

The company has seen a decrease in the above values after covid-19. The price to book ratio of the company is 2.42. It has always been seen that the companies which have a comparable price to book ratio can outperform the market in the long run. But, it is seen that the company has not been able to provide dividends to its shareholders in recent years.

There is a discrepancy in thought process among the various investors since the market is volatile, this condition makes it favourable to purchase more stocks at a reasonable price or to reduce the purchase to decrease the amount of profit that could have been earned by the investment. The investment alerts of the company may identify the risk of investment in the company. Even today, to reduce risk, the investors make a portfolio having a diverse range of stocks. But as a matter of fact, the investors looking for lesser risk invest in companies with a large market cap and the investors looking for more risk invest in companies with a low or midmarket cap. The fundamental financial ratios of the company show that Lloyds Steel can generate profits in the future. If the revenues generated exceed the expenses of the company, an analysis should be done so that to know which areas need improvement so that the investors get the most profit.

On the other hand, if the company is incurring losses, the management should look into the matter and try and reverse the situation. The company’s profit margin is very less nearly about 2.33%. This means that even if there is a small decrease in revenue, the company would soon go to losses as the profit margins would decrease.

Shareholding Pattern:

The percentage shareholdings of promoters have been constant since last four financial quarters but there has been an increase in the current quarter. But the DII holdings have been decreased over the years. Changes in public shareholdings have also been observed before and after covid.

The management efficiency of a company states that how well it manages its assets and liabilities. The last financial year’s return on assets of the company is 0.33%. This means that there is a loss of Rs.0.33 on every Rs100 that is spent on the asset. The last financial year’s return on equity is 1.20%. This states that Rs.1.20 is generated on every Rs100 that is invested by the stockholders.

Competition: The competition in the steel sector is increasing rapidly due to changes in technology. A lot of foreign investments in this sector are also expected to give huge growth. The cost of production might increase and will thus give a strong competition in the global market. The past one-year performance of Lloyds Steel can be seen to be the best among its peer companies. The value of sector PE is 14.21. Since the PE ratio is the same as the top-performing companies in the steel sector like Tata Steel (14.21) and JSW Steel (14.21), it is predicted by Wallet Investor that the company will do well in the long run. The advanced chart also shows that the stock prices are continuing to rise after covid.

The risk factors of the company related to finances, labour cost, and many more are less in the long run as compared to other companies in this sector. The company has also secured its supply of raw materials in the long run. It is also coming up with open access market and good energy market schemes to do well in the short as well as the long run.

Mergers: Merging with Uttam Galva group in the year 2013 has proved to be a good strategy for the company. The steel sector was experiencing growth during this time and many foreign investments were also being taken place in the Indian market. Uttam group owns a major stake of 58.35%. The two companies have been business partners for long and the Uttam group has also taken over the management. The merger done in 2013 was because Lloyds Steel was facing losses in the last three financial years. The losses were around Rs 290 crore and secured and

unsecured loans also amounted to Rs 384 crore. To save the company 22,69,50,000 preferential shares were converted to equity shares. This raised the capital of the company. These schemes proved to be very beneficial to save the business and now the company is striving to achieve great profits in the upcoming years.

Conclusion: As suggested by the experts- looking at the current performance in the company, it is a good option to invest in. Today (28th August 2021) the share price is around Rs 3 but it is pre-assumed that in the long run, the share price should touch Rs10. The investment experts also state that the increase in revenue might be around 255.29%. The Wallet Investor experts say that if a person has invested Rs100 in the current year, the investment can turn around to Rs 355.29 by the year 2026. It is better to purchase the shares today as it is predicted that the price would be more than double in the long run. It is a good investment option.

Zee Media Corporation Ltd.- Next pinnacle or rock bottom?

By: Shiba Intro of the media baron: Zee is a household name in India, entrenched deeply in the minds of the people either through its drama serials or through its vast news network. Zee Media Corporation Limited formerly known as Zee News Limited was incorporated in 1999. It gradually grew to become one of India’s leading media and entertainment companies and captivated its business in broadcasting news, current affairs, entertainment both in national and regional space firmly establishing itself as a premier national as well as a regional media company. Zee Media is headed by Subhash Chandra, it is a part of Essel Group and it is also touted as the company that is behind the country’s first-ever satellite channel, Zee TV. In January 2007, the company got listed in Bombay Stock Exchange with a BSE Code of 532794, National Stock Exchange with an NSE Symbol of ZEE MEDIA, and Calcutta Stock Exchange.

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Of all the total shares, 30.89% of shares are traded publicly in the stock market and the remaining 69.11% shares are owned through the Essel Group of companies.

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Its share volume is valued at around 93.71 lacs.

Business model: A powerhouse media network, Zee Media Corporation is the principle through which its other flagship channels like Zee News, Zee Business, Zee Hindustan, Zee Salaam, Zee Rajasthan, Maurya TV, Zee Punjab Haryana Himachal, etc are segregated as well as operated. Also, Zee Media being a part of the multibillion-dollar Essel Group, so their main mission is to pass information, entertaining people with proper content creation and empower their channels on different regional levels with language-based channels for higher market capture. For prospects, they are also adding up the digital products which are the fastest growing websites, efficient applications, and tools so that their content can be delivered to the mass crowd. The company has made substantial acquisitions and mergers like acquiring DNA and regional entertainment channels. In the future, they are going to have a merger with Viacom and India Today, so that their brand can predominate in national and region-based media channels so that they can grasp the maximum number of customers.

Company Analysis: Financial Year

FY 2016-17 FY 2017-18 FY 2018-19 FY 2019-20 FY 2020-21

Total Revenue (Cr.)

466.46

582.36

739.8

650.81

654.52

EBITDA

49.28

116.09

103.12

-131.36

212.12

PBIT

21.79

75.12

47.72

-219.33

131.35

PBT

6.8

57.54

29.71

-243.34

107.03

Net Income (Cr.)

-19.71

19.76

-7.15

-271.11

75.54

EPS

-0.42

0.42

-0.15

-5.76

1.61

From the above data, it can be conveyed that Zee Media was able to rejuvenate its revenues after the Covid-19 pandemic. After the pandemic, all values turned to be positive rather it be EBIDTA, PBIT, PBT, or Net Income, along with the EPS also increased by 7.37 which shows the unambiguous, a future of the stock.

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ROE: The company has an ROE value of -10.46% which stipulates that the company is not able to utilize the equity capital efficiently and it would turn out to be positive when it will increase simultaneously when the penny stock will gain a high market value.

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P/E ratio: The company has a P/E value of 3.98 which indicates that the investors are willing to pay 2x amount per share because they are expecting good prospects from this penny stock, and it would increase side by side if the penny stock leverages its investors with their plans.

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Sales growth: The company has shown a satisfactory growth in sales of 8.03% in the last 5 years, and this figure can manifest a thrust that can thrive and transform this penny stock into a mid-cap in the media industry.

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ROCE: The company has a ROCE value of -38.29%, and the company is facing an operational loss because of negative profitability which implies that the penny stock is underperforming, and it will increase when the company starts to gain profit.

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P/B ratio: The company has a P/B value of 1.04, which clearly shows that the share price of the company is neither overvalued nor undervalued. So, the penny stock has normalized price while comparing with the book value of the stock.

Shareholding pattern:

In the shareholding pattern of Zee Media, the majority of shareholders are non-institutions along with Pledged Promoters Holdings are 99.1928. Promoters with the highest holdings are Arm Infra and Utilities Private Limited (6.11%). The highest public shareholders are Miloeux Media & Entertainment Private Limited (24.73%). In Individual investors, the holdings are 32.73%. Total promoter holding was down by 6.2% as compared to the previous quarter because the company was underperforming from last the few quarters, as returns were not up to the mark as expected.

While the retail investors increased by 9.48% which asserts that the retailers are assured about the future outcomes.

Competitors: Company

Share price Market Cap P/E ratio Beta

Sun Tv Network Ltd

475.55

19020.49

3.32

1.02

ZEEL

168.05

16400

1.62

1.23

TV 18 Broadcast

34.8

5965.97

1.28

1.04

New Delhi Television Ltd.

78.4

501.26

7.07

0.35

The major competitors for Zee Media are Sun tv Network Ltd., Zeel, Tv 18 Broadcast, and New Delhi Television Ltd. While contrasting the ratios, risk, and other aspects of companies, Zee Media can come up with surmount returns because of low beta, decent P/E ratio and with a high market cap of 562 Cr. rather being a small-cap company.

Conclusion: The Media Industry is going to be shining in the market by 2025, because 52% of India’s population is going to be in the middle-class category list, and with an increase in per capita

income, the spending capacity will increase which will result in diversifying their need into fields like entertainment. So, Zee Media is providing a unique way of investment opportunity for the investors as there are no other leading competitors which are listed. Also, it is a low-risk high-reward opportunity because of a fundamentally strong business model and reinforced by Essel. It has a stronghold on regional-based channels as well as in Hindi entertainment. Because of these reasons Zee Media was able to get a 16% revenue from annualized advertisement during the past 5 years. So, after going through fundamental analysis and ratios, it can be concluded that each penny one invests in can show us the ‘compounding power which is the eighth Wonder of the world’. So, who understands it, earns it, who doesn’t pay for it!

GMR Infra - Is it a Doom and Gloom Stock?

By: Chaitanya Current price

₹28.65 52- week high ₹33.90

Book value per share 2.18

52- week low

₹20.80

Beta

1.23

Market cap

₹17,594 crores

P/B

13.37

Volume

7,615,483

P/E

-5.25

Sector PE

19.38

Introduction: There may be hardly any person who has not heard the name of GMR Infrastructure. GMR group is an Indian Infrastructure Company that was established in 1978 by G M Rao. By developing projects of international recognition and prominently working in developing Airports, Transportation, Energy, and Urban Infrastructure GMR has become a recognized name in the industry. GMR is ideally positioned to build state-of-the-art projects in areas that are crucial for the development process. The group has also utilized its core competencies to undertake various iconic infrastructure projects in India by using the Public-Private Partnership Model. The vision of the group is to be an institution in perpetuity that will build entrepreneurial organizations, making a difference to society through the creation of value.

Financials: Financial Year

FY 2016-17

FY 2017-18

FY 2018-19

FY 2019-20

FY 2020-21

Total Revenue

10,323.48

9,274.25

8,394.84

9,222.13

6,863.46

EBITDA

3,544.04

2,275.64

224.40

2,322.21

486.51

PBIT

2,525.39

1,247.24

-759.56

1,257.96

-518.03

PBT

397.39

-1,069.10

-3,443.71

-2,287.11

-3,690.20

Net Income

-564.38

-1,363.86

-3,580.58

-2,429.38

-2,797.27

-0.94

-2.26

-5.93

-4.02

-4.63

EPS

The revenues of the company have been declining over the years and a major decrease can be noticed in FY 2020-21 due to the pandemic which had a huge impact on the construction business. The income of the company has been fluctuating and has decreased over the years.

Performance Ratios: •

The Return on Assets for GMR Infra has been on the negative side for the past five years and was -6.86% as of March 2021 and indicates that the company might have experienced a financial loss, or its investors might be experiencing a loss in their investments over the years.

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The Return on equity of the company was -11.67% and -39.58% in 2017 and 2018 respectively and for the past three years, the ROE has been zero. Since the company has negative ROE, it indicates that the company has been inefficient in managing its funds.

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The Beta of GMR Infra is 1.23 which indicates that the stock is 23% more volatile than the market.

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The PE ratio of the company has been on the negative end for the last 5 years and was 5.25 in March 2021 which indicates that the company has negative earnings. It can also mean that the company is not generating enough profit and might be on the way to bankruptcy.

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The debt-to-equity ratio curve is sloping downwards for GMR Infra over the last 5 years and was -18.78 as of March 2021. This indicates that the company has more liabilities than assets and has negative shareholder equity.

Shareholding Pattern:

Following the pandemic and the ongoing economic slowdown, GMR witnessed a fall in the total promoters’ share by 1.12% in the quarter ended June 2021, to 61.49% which was down from 62.61% in March 2021. The institutional holdings grew by 0.19% in June 2021 which reached 27.09%. GMR Infra's share price has risen from Rs 25.3 to Rs 28.3 in the last year, representing an increase of Rs 3.0 or 11.9%.

Promoters own a significant portion of the corporation which accounts for 62% of the total shares.

As of June 2021, 74.87% of GMR Infrastructure's promoter ownership had been pledged. The company's stock has increased by 34% during the last year but has been sliding since its promoter, GMR Enterprises, revealed on June 21 that it had pledged 24 million equity shares to KLJ Plasticizers, a leading manufacturer of plasticizers and polymer compounds.

Competitors: GMR Infra is trading at a lower price as compared to its major competitors. The P/E ratio of the competitors is much higher than GMR indicating that they have more value and that the investors are ready to pay more. All the competitors of the company have a positive PE ratio while GMR Infra is negative indicating that the company is making losses. Also, the PE ratio of IRB Infra is at 32.61, the highest among the major competitors of GMR Infra and almost double the industry PE ratio which is at 18.45. Hence, investors might prefer to buy the shares of the competitors.

Major News: In October 2019, GMR Infra's stock rose by 3% after CCI authorized the sale of GMR Airports' stake. In February 2020, the $150 million bond offer for Delhi Airport was oversubscribed eight times and GMR Infra gained 11.65% to Rs 26.35, making it the best performer on the BSEs A group. In September 2021, GMR Infra signed definitive agreements to sell its entire 51% stake in Kakinada SEZ Limited to Aurobindo Realty and Infrastructure Private Limited, through its wholly-owned subsidiary GMR SEZ and Port Holding (GSPHL) which resulted in a 12% gain on the share price.

Conclusion: To conclude, GMR’s financial analysis shows that the company is weak financially and that the company is not able to maintain a profit over the past few years. The stock currently trades at a premium of 66% based on the intrinsic value and seems like a good sale rather than a good buy.

The fundamentals of GMR Infra look average and it might be time to wait to invest in the company. The company also has a high promoter pledge of 74% and the company does not have enough current assets to cover its current liabilities. In the case of GMR infrastructure, it can be noted that it is best to safeguard your pennies rather than investing them in this penny stock at the moment. But who knows when the tide may change, so do not forget about it in a jiffy?

Tata Steel Bsl Limited By: Ayushi Jain

Introduction: Tata Steel BSL formerly known as Bhushan Steel Limited was acquired by Tata Steel in 2018. Tata Steel BSL Ltd is one of the leading players in the Indian Steel Industry. It is a source for a wide variety of products such as Hot Rolled Coil, CBCA, CRFH, Galvanized Coil. Among the major promoters of technological change in the Indian Fragmented Industry, Tata Steel BSL has already emerged as the largest Coil Rolled Steel Plant in the country and with an independent line for producing Cold Rolled Coil and sheet up to 1700mm.

Financial Analysis: Financial Year FY 2016-17 FY 2017-18 FY 2018-19 FY 2019-20 FY 2020-21 Total Revenue

13,705.94

17,012.56

20,891.61

18,199.14

21,418.63

EBITDA

5548.01

2409.35

3931.01

2299.94

3053.91

PBIT

1897.33

514.27

2489.27

977.72

4068.24

PBT

-3560.73

-5790.63

-1262.91

-718.19

2,445.98

Net Income

-3,120.54

-1468.79

-1262.91

-718.19

2,445.98

-138.89

-1,095.45

17.45

-5.94

22.37

EPS

The Revenue of the Company has been fluctuating over the years. The Company has been making a loss for the first 4 years but even after the pandemic, the company has shown a good increase in income which has changed from negative to positive. The loss was also decreasing year after year. Also, EPS has been negative for the first 4 financial years but this is also continuously increasing and in the year FY 2020-2021 EPS has changed to positive which is a good sign for the company.

Shareholding Pattern: Due to pandemic and economic slowdown in the country, Tata Steel BSL has witnessed a decrease in shareholdings comparing to the last quarter which ended in May 2021. The shareholding of the promoters remains unchanged. FII holdings have seen a downfall of 0.37%.DII holding has also witnessed a downfall of 1.86%.

Ratio Analysis: Particulars

2018

2019

-1.67

2021

-5.79

-62.28

Return on Equity (%)

0.00

0.00

168.43 -180.10 87.14

Total Debt/Equity (X)

-35.3

-0.56

16.69

48.33

4.05

Book Value/Share (Rs)

-54.9

-1,150.48

9.3

3.3

25.88

15.67

-5.94

22.55

-154.56 -1,095.44

4.32

2020

Return on Assets (%)

Net Profit/Share (Rs.) •

2017

6.65

Return on Assets measures the profitability of physical assets. The ratio has been fluctuating over the years owing to the pandemic and has also been negative. In 2018 the company was acquired by Tata Steel and so there is an increase in the ratio. The ratio has shown has a tremendous increase in the FY 2020-2021, indicating that after the pandemic company has managed to stabilize and is effectively managing with the available resources.

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Return on Equity measures the company’s profitability relative to equity. For the first 2 years, ROE was zero indicating negative net income. In 2018, when Tata Steel acquired the company, this was a good sign for the company but owing to the pandemic the value again turned negative. The company was able to stabilize and showed a tremendous increase indicating that the shareholders are now gaining.

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The D/E ratio measures the extent to which the company finances its operations from debt and wholly-owned funds. The ratio has been negativing for the first 2 years, increased after the company was acquired by Tata Steel. Due to the pandemic use of debt funds increased which increased the ratio. But in current financial company stabilized and the use of debt funds was also reduced which is a good sign.

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The Book value is used especially by the investors to know the actual worth of the company. It has been negativing till the company was not acquired. It decreased due to pandemic and again increased in the FY 2020-2021 indicating that the company is growing.

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Earnings per share was negative for the firm till it was acquired. The brief increase in EPS after its acquisition was once again disrupted due to the pandemic. However in FY 20202021 it has increased and it shows that the company is making enough profits.

Competitive Analysis: Company

Current

Market

P/E

Name

Price

Cap

Ratio

Beta Net Profit

Sales Turnover

Tata Steel BSL

90.5

9,895.63

1.75

1.58

2,518

21,418

JSW Steel

677.5

1,63,766.68

11.39

1.17

7,872

79,839

Hindalco

437.9

98,391.90

14.1

1.49

5,177

1,31,985

SAIL

118.25

48,843.46

5.27

1.79

3,680

69,113

Tata Steel BSL is trading at a low price as compared to its peers. A low market cap indicates that the company has not yet reached its maturity stage, so it is susceptible to future growth. The P/E is also low as compared to its peers but still positive indicating that stock price is rising. The company is not having less beta value as compared to its peers which indicate a high risk.

News Analysis: On August 4, 2021, the company consolidated a net profit of Rs 2,478 crore for the quarter that ended on June 30. The Company had a loss of Rs 650 crore in the same quarter last year. Total income has increased to Rs 7,884 crore from Rs 2,710 crore reported at the end of the same quarter last year.

On August 8, 2021, Tata Steel BSL had set up the world’s first Ultraviolet oxidation plant with the support of the Research and Development Team of Tata Steel in Odisha’s Dhenkanal District to treat cyanide in wastewater, a deadly pollutant.

Merger: The process of merging Tata Steel with Tata Steel BSL has improved by a ratio of 15: 1. This means that out of 15 shares of Tata Steel BSL, one can get one share of Tata Steel. In the epidemic, Tata Steel BSL not only overcame its financial problems but also contributed to extraordinary performance and earned its highest Earnings before Interest, Taxes, Depreciation, and Amortization.

Conclusion: Although due to pandemics, the company was affected and the profits did turn negative. But the company stabilized itself quite well and post-pandemic the stock price increased tremendously.

Tata Steel BSL has seen EPS grow by 227%. In the last year, its revenue is up by 17%.

Considering all the historical data it can be analysed that Tata Steel BSL is performing quite well in the current financial year. The upcoming merger with Tata Steel is positive for the company and has high prospects for growth.

Shree Renuka Sugars Limited By: Isha Krishna Introduction: Shree Renuka Sugars Limited (SRSL) is a bio-energy corporation and global agribusiness. It is India’s 5th largest manufacturer accounting for 20% of India’s sugar export with the largest sugar refining capacity of 4000 tons per day (TPD) and distillery capacity of 600 kilolitres/day. SRSL is a public company and belongs to the Agri-Business Sector. It was founded in 1998, with its headquarters at Kalaburgi, Karnataka, India. The company also provides power generation and ethanol production. SRSL is listed on the BSE with a code 532670, NSE with symbol RENUKA, and ISIN of INE087H01022.

Shareholding Pattern:

A company’s shares are held by promoters, foreign and domestic institutions, and mutual funds, apart from retail investors. Promoters act as ship captains and control the company’s direction.

A change in the institutional and mutual fund holdings also indicates a performance outlook for the stock. Observing the shareholding pattern, we can see that the share of promoters has increased from 58.34 in June 2020 to 62.48 in June 2021. The others share is seen to be almost stable over the past years. The FII increased from 0 in June 2020 to 0.46 in June 2021. The DII experienced a decline from 26.44 in June 2020 to 13.71 in June 2021, and the public share declined from 15.21 to 13.35 over the last year.

Ratio Analysis: •

Careful analysis of financial data is required for stock investing, to find the company’s true net worth. This can be done by examining the company’s balance sheet, profit and loss account, and cash flow statement. An easier way is to check a company’s financial ratios.

•

The price of Earning ratio indicates an investor’s willingness to pay for a share. Shree Renuka Sugar’s PE ratio is -46.49, which is low and comparatively undervalued.

•

Return on equity is the ability of the firm to generate profits from shareholder’s investments in the company. Shree Renuka Sugar’s has recorded an ROE of 25.80 in 2021, unlike the previous years which means that the company is increasing its profit generation.

•

ROA measures a company’s efficiency to convert the money used in the purchase of assets into net incomes or profits. The ROA of Shree Renuka Sugar was negative over the past 4 years and marked 0.79 for the present year, which is a good sign for the company.

•

A higher current ratio is desirable for the company to remain stable to unexpected bumps in business and economy. Over the past 4 years, Shree Renuka Sugar’s current ratio was less than 1, indicating that the company faced some issues with its short-term obligations.

But it has increased to 1.04 in 2021.

•

Inventory turnover ratio is a tool to evaluate the liquidity of a company’s inventory. It is a measure of the number of times a company sold and replaced its inventory during a certain period. Shree Renuka Sugar’s inventory turnover ratio changed from 5.79 in 2017 to 2.35 in 2021 which is good for the company.

•

Book value per share (BVPS) indicates a firm’s net asset value. Shree Renuka Sugar has a book value per share of -3.12 indicating that the company has more liabilities than total assets.

Price variation Candlestick over the past years

Competitors: Company

Current price Market cap PE Ratio Beta EPS

Balrampur Chini

370.00

7770.00

18.60

0.77

19.89

EID Parry

408.15

7228.43

13.13

0.71

31.09

Triveni Engg

168.70

4078.41

13.45

0.81

12.54

Dalmia Sugar

435.45

3524.50

13.11

0.69

33.22

Competition is a boost of innovation. Competition among companies is one of the important aspects to consider while investing. Some of the major competitors of Shree Renuka Sugars Ltd. are Balrampur Chin, EID Parry, Triveni Engg, and Dalmia Sugar. The PE ratio of Shree Renuka Sugars Ltd. is less than the competitors indicating that the investors would prefer to invest in those companies. The competitors have better PE ratios, EPS, and better profits whereas Shree Renuka Sugars Ltd. is incurring loss with negative EPS. Hence, the investors would prefer investing in the competitor companies.

News: •

On 21st August 2021, Shree Renuka Sugars received rating action from India Ratings and Research. The company’s long-term issuer ratings upgraded to ‘IND A- ‘from ‘IND BBB+’, which was a positive outlook.

•

On 3rd August 2021, Shree Renuka Sugars shares were at a 5% lower circuit as losses increased in the June quarter.

•

On 2nd August 2021, Shree Renuka’s Consolidated June 2021 Net Sales recorded at Rs. 831.40 crore, down 38.13% YOY and Standalone June 2021 Net Sales at Rs. 795.20 crore, down 40.17% YOY.

•

On 9th February 2021, Shree Renuka’s Standalone December 2021 Net Sales recorded at Rs. 1371.90 crore, up 40.62% YOY and Consolidated December 2020 Net Sales at Rs. 1387.80 crore, up 40.11% YOY.

Conclusion: The company Shree Renuka Sugars Limited’s stock is considerably attractive based on intrinsic value. The increase in EBITDA indicates that the expenses of the company are managed well.

The revenue is also managed efficiently. Material cost is very high, almost 80% material cost recorded as compared to sales. The company seems highly inefficient in the case of asset management. Total cost and total income are almost equal implying that the company’s expenditure is very high. The company is improving its performance as compared to the last 5

years. The ROA and return on capital have increased. The debt of equity ratio is high, indicating that the interest would increase. The ownership strength of the company is slightly missing the benchmark. Though the profits made by the company are good, it might not be able to sustain adverse conditions.

Trident Ltd. By: Sanket Tiwari “It's easy to make money when you invest some of it.”

– Max Tegmark Introduction: Trident Ltd. is part of the USD 1 Billion Trident Group which is headquartered in Ludhiana, Punjab. Established in the year 1990 the company has evolved as a global textile player under the leadership of Chairman Mr. Rajinder Gupta. Trident Limited is a leading manufacturer of Yarn Bath Linen Bed, Linen Wheat Straw-Based Paper Chemicals, and Captive Powder. The company has state-of-art manufacturing facilities In Barnala (Punjab) and Bundhi (Madhya Pradesh). The company has a strong clientele in 100 countries across the globe. The company has taken expansion in Pulp & Paper Chemical Recovery and Co-generation.

Current price

₹20.15 52 weeks high ₹22.65

Book value per share 6.53

52 weeks low

₹6.25

Beta

1.10

Market cap

₹10,167 crores

P/B

3.12

Volume

92,32,645

P/E

20.57

Sector P/E

14.21

Financial Analysis: Financial Year Total Revenue (in Cr)

FY 2016-17 4617.38

FY 2017-18 4628.00

FY 2018-19 FY 2019-20 FY 2020-21 5265.27

4723.95

4535.31

EBITDA

6.87

5.89

5.57

3.95

10.32

PBIT

11.37

10.01

13.05

1.04

0.96

PBT

8.61

7.69

10.73

0.83

0.87

Net Income

337

266

372

340

304

EPS

6.61

5.18

7.28

0.67

0.68

DPS

0.36

0.36

0.36

0.36

0.36

Pay-out ratio

39.25

14.38

20.22

1.86

1.89

There has been an increase in the values of total revenue, net income, EBITDA, EPS after the pandemic. Company is giving good profits values post-Co-vid. The price to book ratio of the company is 6.53. It has always been seen that the companies which have a comparable price to

book ratio can outperform the market in the long run. Also, the company is providing dividends every year as they are scaling up their business. It has been observed that the company is now entering into new segments as they have two subsidiaries, this condition makes it favourable to purchase more stocks at a reasonable price or to reduce the purchase to decrease the amount of profit that could have been earned by the investment. Trident is the world’s largest terry towel manufacturers. It is also the world’s largest wheat straw-based paper manufacturer. Trident Ltd was incorporated in the year 1990, headquartered in Ludhiana, Punjab. The company operates in three key business segments as home textile (49% of revenue), Yarn (33% of revenue), and Paper (18% of revenue) with manufacturing facilities located in Punjab and Madhya Pradesh.

Shareholding Pattern: Trident Ltd. Shareholding pattern indicates that shares have holdings of Promoters, Retailers, FIIs, DIIs & Mutual Funds as there is no big change in holdings compared to last Quarter. In the last one-year Promoters, holdings increased from 71.1% to 73%. But retailers are showing interest in buying Trident as it has the potential to make good profits for investors. The last financial year of Trident went smooth despite Covid, as the company started manufacturing cotton products and masks which were in high demand during the pandemic. The company today, is the best fundamental company and is heading towards becoming the biggest multibagger in coming years because of their financial strength and continuously given good profits and dividends to the existing shareholders. Trident gave a 7.27 Net profit margin in 2019-2020.

And increasing its revenue from sales Y-O-Y.

Competition: The competition in the paper and textile sector is increasing rapidly due to changes in technology. A lot of foreign investors in this sector are also expecting good returns in the coming years. The cost of production remains constant and will give a strong competition in the global market by supplying it across the globe.

Past Performance: The past year’s performance of Trident Ltd. can be seen to be the best among its peer companies and the first choice of investors. The value of sector PE is 6.00. Since the PE ratio is nearly equal to the top-performing companies in the textile sector like Trident Ltd. (20.56) and Welspun India (17.79), it is predicted by Investors that the company will give good returns in the coming years as it is working on expansion in other sectors too with another subsidiary of Trident Ltd.

The Risk factor of the company related to finances, labour costs, and many more are less in the long run as compared to other companies in this sector. The company has also secured its supply of raw materials in the long run and is majorly focusing on expansion and exports into other countries. It is also coming up with solar energy production and entering into other sectors to beat the competitors. It’s the best fundamentally strong company, it rose from Rs 5.65 to Rs. 20.45, still it has the potential to become the multi-bagger in coming years. The candlestick chart also indicates the bullish pattern from the last 5 consecutive years.

Conclusion: Trident Ltd. can become Multi-bagger Stock very soon in the coming years. Book Value of any share is one of the best ways to visualize its current stock price, and “Trident” has become the first choice of retail investors where we can accept good returns in the coming future from this Penny Stock. Currently, it is trading between Rs. 19-21 and its all-time high is Rs. 22.65, for this current financial year. Trident will set a new high where we can expect that it may become the Multi Bagger Stock in coming years. As being the intelligent investor, we know that to book good profits we need to invest and hold for a longer period. Now the company has set bigger goals to compete with the challenging market, now they are entering into the production of Sulphuric Acid, expanding in the Yarn segment by installing 1,62,432 Spindles & 3,600 Rotors.

In 2019, Board approved to implementation of Captive Cogeneration Steam and Power Plant generating facilities. Yes, it will be a good deal to buy this penny stock today and hold it for years. We can’t speculate things but the strong fundamentals of the company tell itself how far it will go.

IFCI By: Mehak “A penny saved is a penny earned.”

– Benjamin Franklin Introduction: IFCI is India’s first Development Financial Institution established in 1948. It has contributed significantly towards three sectors of the economy growth & development – manufacturing, infrastructure & services, and agriculture allied sectors, by providing financial support to different projects related to roads, real estate, power, airports, and other allied industries. It became a private enterprise in 2015, and today is an established NBFC and NDSI of India. The company has played a major role in setting up stock exchanges, educational and skill development institutes, etc. They help 287 companies with financial assets when they cannot get the same from banks or capital markets.

Fundamental Screening: Financial Year

FY 2016-17

FY 2017-18

FY 2018-19

FY 2019-20

FY 2020-21

Total Revenue

3,579.00

4,057.00

2,821.00

2,873.00

2,073.00

EBITDA

1,544.49

2,608.20

1,097.66

1,306.10

-998.96

PBIT

1,510.30

2,574.55

1,064.85

1,275.44

-1,028.26

PBT

-779.02

500.25

-691.29

-140.91

-2,147.23

Net Income

-324.00

416.00

-475.00

-223.00

-1,911.00

-2.27

2.26

-2.88

-1.36

-10.24

EPS

The revenues of the company have been declining because of the current pandemic the business has stopped, especially on which the company focuses. We observe a lot of negatives because the revenues have been declining whereas the expenses have been stable, also the company has a lot of long-term debt which they cleared off this year by raising short-term capital. The company’s long-term debts have decreased from Rupees 19,170 crores to nil from the financial year 2016-17 to 2020-21 and the short-term borrowings have increased from nil to RS. 9,300 crores approximately in the same time period, therefore the company has either paid off long-term debts by raising short- term debts or has raised capital to meet the capital requirements during COVID- 19 crisis. Observing PBIT and PBT we can see that in the financial year 2019-20 and 2020-21 the interest payments have increased drastically therefore short- term

liabilities have high-interest rates; therefore, the firm should pay it off soon. The profits and net profit of the company are negative from last 3 years, due to Covid-19 pandemic impact but also their interest payments are huge.

Shareholding pattern:

Observing the last 5 years' shareholding pattern we see that the share of promoters is increasing whereas that of FII’s, banks, and mutual funds are decreasing the reason is the company is not performing well, also the rupee is getting weaker in consideration to a dollar. Also, during the pandemic, FII took a lot of money out of the Indian capital market because of high volatility.

Financial Ratios: •

PE ratio tells us what the market is willing to pay for a share taking into consideration past and future earnings. The PE ratio of IFCI is 1.04, whereas the sector’s PE ratio is 4.58, this means that investors are expecting fewer returns from the company as compared to the returns from the entire sector.

•

Return on equity- the ratio has been negativing for the last 3 years because of losses incurred by the company during the same period. This is majorly due to uncertainties that the pandemic has caused in the country. Also, the losses have been constant due to a huge number of debts which is approximately RS. 20,000 crores.

•

Debt to equity ratio- Over the last 5 years, the ratio has been around 4 which indicates that it is a risky firm to invest in, the greater the ratio more is the risk for investors. Because of the debt is more interest payments increase and therefore profits decrease. But the company has paid off all its long-term debts in the financial year 2020-21.

•

Profit before tax margin has been negative for 3 consecutive years and has reached RS. 142.07 crores in the year 2021, this indicates that the company’s expenses are more than its sales and the increasing ratio indicates that it is not able to its expenses.

Major Competitors: Company

Current price Market cap PE Ratio Beta EPS

Power finance corporation

126.30

33324.23

2.66

1.19

44.5

IRFC

22.85

29861.54

5.94

0.51

10

1091.00

102682

114.60

0.65

10.48

62.20

502.08

5.88

0.68

10

SBI Card Tourism Finance corporation

Competitors are one of the major aspects we need to look at when analysing a company as they have a direct impact on the company. Some of the major competitors of IFCI are Power finance corporation, Indian Railway Finance Corporation, Tourism finance Corp of India Ltd., SBI cards.

In this sector, all the companies focus on different products. IRFC is a very close competitor because the market capitalization and share price of both companies are almost the same. The company has better scope in future than IRFC because they provide finance to projects that boost the economy whereas IRFC finances only railway projects. All the peer competitors of the company are making profits and having a better PE ratio and EPS whereas the company is making losses with negative EPS. Therefore, the investors will be more interested in buying other companies compared to IFCI, because it has only strong financials in assets.

News that impacted the stock prices: On December 11, 2020, when the company said that they will be coming up with better asset portfolio quality and cash flow with improved strategies, the share price went up by 73% and reached its 52-week high. On December 22, 2020, the news that the company is selling 2 of its subsidiary companies the stock was traded a lot but the price of the share didn’t fall. Whereas

when the quarterly results of the company were published the stock has shown movement according to the financials of the company. In June, 2021when ICRA reaffirms the credit rating the share was traded 2.31% higher in the market. On 25 August 2021 the Brickwork ratings have downgraded IFCI because of increasing losses, de-growth in the loan portfolio even after downgrading the share prices increased by 2%. In the financial year 2021, the share has given a return of 62% compared to a market return of 52%. CADRE gave a downgrading to the company on 13th august 2021 after that the share price has seen a downfall.

Conclusion: The company has paid off all its long-term debts this year, which means there is a probability to see profits in the cashflows from now on. The company has to come up with new strategies and better planning to attract investors as well as customers. Investing in this company is risky with the current financials, if an investor is willing to take the risk to invest in this company, then invest the same for a longer term because in short term the company cannot give very good returns. As per the experts, the share price is constantly increasing but at a slow pace.

Suzlon Group By: Himasree

Introduction: Suzlon Group, founded in 1995, is the leading energy provider. It has installed over 18100 MW of wind energy in 18 countries across Asia, Australia, Europe, and America. Suzlon energy being India’s largest renewable energy provider, introduced India’s longest wind turbine blade. It has around an 1800+ customer base.

Current price- Rs6.04

52 weeks high- 9.45

Book value per share -11.63 52 weeks low- 2.71 Beta-0.54

Market cap (in crs)-Rs 5341

P/B- 10.34

Volume- 50,240,264

P/E- -0.43

Sector P/E-13.13

Financial Analysis: Financial Year FY 2016-17 FY 2017-18 FY 2018-19 FY 2019-20 FY 2020-21 Total Revenue

9646.65

6535.64

PBITD

4.45

1.94

PBIT

3.63

EPS

0.71

2979.48

612.13

1317.06

0.47

-1.24

-0.04

1.15

-0.35

-2.53

-0.25

-2.20

-13.94

-6.16

-0.53

The revenue of the company is decreasing drastically because of the financial crisis and debts.

Also, EPS has been decreasing over the years which is not a good sign as the company had been a loss making one over the tenure of 5 years. Also, the company hasn’t paid any dividend to the shareholders which are identified by the DPS ratio.

Financial Crisis: The growth of Suzlon in the earlier stages was due to its unique business model. The installation costs and upfront is huge which clients cannot invest. So Suzlon stated that 25% will be paid by clients and the rest will be arranged on loan. By 2008 many Indian banks financed Suzlon energy.

Unfortunately, financial crises and debt burdens arose in 2009. To recover from the losses the company sold a 35% stake of Hansen for $370 million, completed a debt restructuring plan, and returned profits by 2011. In 2013 there was a severe liquidity crunch and could not pay the debts.

In this case, the lenders restructured 9500/- crore of loans. Suzlon returned to profitability after the financial crisis of 2013-2015. Again in 2019-2020 there was a lack of working capital and faced a lot of debt burden. Promoters will infuse capital of Rs 392 crore for maintaining day-day activities for the business. SBI led the consortium that it will restructure debts worth 14000 crores. The unsustainable debts of Rs 8200 crore worth loans were converted into long-term optionally convertible debentures payable in 20 years and reduced the interest of 9% per annum on sustainable debts which are repayable over 10 years. It returned to profitability in September 2020.

Sales: In 2014, the sales was around 20,403 and the sales were drastically reduced to 2973 by 2020 due to lack of working capital, projects, and reduction in market share. From June 2020 to September 2020 the company registered a positive operating profit of Rs 676 crore.

In December 2019 the interest burden was Rs 423 crore which is reduced to 197 crores in 2020.

The long-term debt had been reduced from Rs 11996 crore in 2018 to Rs 6471 crore in September 2020 as a consequence of the debt restructuring plan.

Shareholding Pattern: Coming to the shareholding pattern, the total promoter shareholding is 16.52% which is very less. A decrease in promoter shareholding patterns will send a negative signal to investors. This may also indicate that the promoters don’t have faith in the prospects of the company. FII holdings have been decreased from 4.22% to 4.08% in June. Although the number of mutual funds remained unchanged, the mutual fund holdings have been increased to 0.03%.

Holder's Name

2021

2020

2019

Promoters

16.52% 19.82% 19.8%

Foreign Institutions 4.08%

3.6%

6.3%

Mutual funds

0.03%

0.04%

0.04%

Public

61.68% 71.5%

66.7%

Others

17.7%

7.2%

5.1%

Return on Equity: The return on equity tells how effectively the money is being employed. The ideal average return on equity for any company should be above 15%.

Cash Equivalents: The company carries cash equivalents of Rs 581 crore in march 2018. It was reduced to 75% and 82% in March 2019 and 2020 respectively. In September 2020 the cash equivalents had been increased to 162 as a consequence of the debt restructuring program and also due to capital infusion by promoters.

Peer Comparison: The Central Electricity Authority (CEA) stated that by 2019-2030 the renewable energy sector will rapidly grow from 18% to 44% and the thermal energy sector will reduce from 78% to 52%.

In 2014 the sales of Suzlon were 20403 crores which have been drastically reduced to 1247.31 crores. This indicates the poor performance of Suzlon due to the financial crisis and debt burden.

Suzlon was not ready to take up projects because of a lack of working capital to perform day-today activities. Currently traded at a significantly low price compared to its peers, and even with a net loss of 398.40 crores, Suzlon increased its sales turnover. This means the company has a good receptivity among the customer where the quality of the product is concerned. A low market cap compared to its peers indicates that the business has not yet reached its maturity stage and is hence has potential to further growth in the future.

Conclusion: Looking at whether to invest or not to invest in the long run, considering the cash level, debtinterest burden, and operating profit it is risky to invest in Suzlon energy. Turbulence will be there in the stock market but considering the fundamentals and future of green energy, Suzlon can be a good bet. If your investment horizon is 5-10 years then Suzlon can turn out to be a multibagger. With the combination of industry headwinds, German banking blockages, and market capital erosion that we see a very good Indian company not going too strong. Tulasi Tanti, the founder was called the wind man of India and was among the tableau of the richest.

IRFC (Indian Railway Finance Corporation) By: Srikar About the Company: On December 12, 1986, IRFC was incorporated as a public limited company under the Companies Act, 1956, as Indian Railway Finance Corporation Limited. IRFC is wholly owned by the Government of India. It is registered with the Reserve Bank of India as an NBFC (NonBanking Financial Company). It is classified under the category of an ‘Infrastructure Finance Company’ under Section 45-IA of the Reserve Bank of India Act, 1934. IRFC was notified as a ‘Public Financial Institution’ under the Companies Act, 1956. It is currently trading at a share price of 22.95 and has a market capitalization of Rs 29730.85 crore. The company reported gross sales of Rs. 138384.64 crores and a total income of Rs.138385.37 crores in the last quarter.

Business Model: The company is responsible for raising the funds required for Indian Railways. It has contributed significantly to the capacity enhancement of the Indian Railways during the last three decades by financing a proportion of its annual plan investment. The Company is the Indian Railways' dedicated market borrowing arm. The primary business of IRFC is financing the acquisition of rolling stock assets, which include both powered and unpowered vehicles such as locomotives, coaches, wagons, trucks, cranes, and trollies of various types, and other rolling stock components as enumerated in the Standard Lease Agreement (collectively 'Rolling Stock Assets'), as well as leasing of railway infrastructure assets and national projects related to Government of India.

Fundamental Analysis: •

P/B Ratio: The market capitalization, or market value, of a company, is compared to its book value in the P/B ratio. It compares the stock price to the book value per share of the company (BVPS). One of the greatest criteria for valuing such companies is the P/B ratio.

IRFC now has a price-to-book ratio of 0.83, which may be compared to the market price per share to determine whether the company is undervalued or overvalued.

•

P/E Ratio: The price-earnings ratio (P/E ratio) is the ratio of a company's share price to its earnings per share. The ratio is used to determine the value of a company and whether it is overvalued or undervalued. Relative valuation metrics like the P/E ratio can be used to see if the stock is worth it at the current levels. The stock is trading at a current P/E ratio of 6.73.

•

Return on Equity (ROE): The return on equity (ROE) is a measure of a company's profitability with its equity. ROE can also be thought of as a return on assets minus liabilities because shareholder's equity can be calculated by adding all assets and subtracting all liabilities. IRFC has an ROE of 13.19%.

•

Earnings per share: Earnings per share refers to the monetary value of a company's earnings per outstanding share of common stock. EPS is a widely used metric for estimating corporate value since it shows how much money a company makes for each share of its stock. As it shows how much of a company's profit after taxes each shareholder owns, earnings per share are else often considered to be the best measure of a share's true price.

•

Profit Growth: The profit margin (PAT margin) of a company indicates how successfully it manages its costs. It is one of the most important indicators of a company's financial health.

IRFC reported a net profit of Rs 3,692.42 Cr and the compounded growth of profit in the past 3 years is 58.13 %. The PAT margin of the company is 26.68 %.

Technical Analysis:

The stock is currently trading at Rs 22.95. The technical chart shows a good support level at this price. It should give a reversal candlestick so that the investors can consider buying. Or else the investors need to wait for the next level which is at Rs 21. The good support level and good volume which are considered as confluence can give this stock the first step for upward momentum.

Conclusion: In comparison to the private sector, IRFC is a public sector undertaking with slow growth. The Return on Capital Employed is nearly 6%, which is a very low figure. The stock is intended for long-term investment rather than short-term trading. With a consistent dividend, IRFC would provide a fair upcycle movement in the stock, but it is likely to be a multi-bagger but it takes a long time. The company operates on a cost-plus business model, charging MOR a premium over its borrowing expenses. The capacity to charge a margin secures the company's long-term profitability. Despite being an NBFC, the company's business approach is low-risk. Its liquidity risk (the risk of failing to meet a short-term debt obligation) is reduced because MOR is obliged to cover any funding gap for IRFC to meet bond redemption or term loan maturity. So, the conclusion would be that IRFC has strong fundamentals and also has good support from the Ministry of Railways (MoR) can be considered as a multi-bagger investment for the long term.

Lemon Tree By: Akansha Introduction: On June 2, 1992, Lemon Tree Hotels (LTH) was founded. The business of building, owning, purchasing, renovating, running, managing, and advertising hotels, motels, resorts, and restaurants is the focus of the company. LTHL launched its first hotel in May 2004 with 49 rooms and now has 8,350 rooms in 85 hotels in 52 places in India and overseas under its different brands, including Aurika Hotels & Resorts, Lemon Tree Premier, Lemon Tree Hotels, Red Fox Hotels, Keys Prima, Keys Select, and Keys Lite. On June 10, 2010, the company's name was changed to 'Lemon Tree Hotels Private Limited. LTHL will operate 10,450 rooms in 106 hotels around the country once the existing pipeline is online.

Financial Screening: Financial Year FY 2016-17 FY 2017-18 FY 2018-19 FY 2019-20 FY 2020-21 Total Revenue

225.43

238.13

282.64

238.13

83.94

EBITDA

12.18

11.94

41.00

13.05

58.28

7.9

26.28

48.45

40.65

-53.87

423.87

496.83

564.02

680.32

274.41

0.59

0.85

PBT Net Income EPS

1.39

0.97

-1.58

Total sales, net income, EBITDA, and EPS have all increased before the pandemic. After covid, the company's aforementioned values have decreased. The company's price-to-book ratio is 2.06. Companies with a comparable price to book ratio have traditionally been deemed to outperform the market in the long run. However, it appears that in recent years, the corporation has been unable to pay dividends to its stockholders.

Because the market is volatile, there is a disparity in thought processes among investors.

Investors seeking a lower risk take a position in firms with large market size, while those seeking a higher risk take a position in companies with a low or mid-market cap Data clearly tells us about the increase and decrease in shareholders in each sector. There was an increase in holdings by promoters, FII and DII as compared to FY-19 but there was a decrease in holdings by public sector and other sector. On the contrary, there were decrease in holdings

in FY-21 by promoters, FII and DII sectors while the holdings by public and other sectors increased, when compared with FY 20.

Ratio Analysis: PER-SHARE RATIOS

MARCH'21 MARCH'20 MARCH'19 MARCH'18 MARCH'17

Return on Assets

-2.54

1.99

4.45

1.64

0.50

Return on Net worth

-4.05

3.08

6.13

2.30

0.71

Total Debt/Equity (X)

0.34

0.31

0.27

0.31

0.32

Book Value/Share

12.69

13.21

13.07

12.22

11.87

-0.52

0.41

0.80

0.28

0.08

(%)

(Rs.) Net Profit/Share (Rs.)

•

The profitability of physical assets is measured by return on assets (ROA). The ROA has been dropping during the previous two years. Negative asset returns indicate that the firm is unable to obtain or completely utilize its assets to create profit.

•

Return on equity (ROE) is a metric for determining a company's profitability with its equity. The company's return on equity has been negative for several years, implying that its owners have lost rather than gained wealth over time.

•

The D/E ratio is a measure of how much debt and wholly-owned capital are used to fund a company's operations. The D / E ratio has risen steadily over the last 2 years. The rising debt-to-equity ratio suggests that the firm is relying on a debt fund, which has been growing over time and might be problematic in the long run.

•

Investors, particularly value investors, frequently utilize the BVPS to assess if a stock's value is justified. This year's pricing has fluctuated between Rs 11.87 and Rs 13.21. The BVPS ratio has remained below market price throughout time, indicating that the firm has not been overpriced.

•

Earnings per share, or EPS, is a rate of return that determines how much money a business will make. If the stock price return is negative, the firm is making losses or has negative returns. As you can see, the firm has had negative EPS ratios for a long time.

Performance Analysis: Lemon Tree is now trading 73.3% below its estimated fair price but the earning forecast is 108%.

It is not significantly volatile compared to other stocks at present. The volatility rate is seen weekly at 5% over the past 1 year. It is underperforming for over a year and gave a return of 47.5%.

Earnings vs. Savings Rate: Over the next three years, Lemon Tree is expected to become profitable, which is deemed quicker growth than the savings rate (6.8%).

Earnings vs. Market: Over the next three years, Lemon Tree is expected to become profitable, which is deemed above normal market growth.

Earnings Growth: Lemon Tree's is anticipated to break even in the next three years.

Revenue vs. Market: Lemon Tree's revenue is expected to increase at a higher rate (43.1% per year) than the Indian market (12.5%). Lemon Tree 's revenue is expected to rise at a rate of 43.1% each year, which is higher than the industry average of 20% per year.

Recent News: Lemon Tree Hotels reports a standalone net loss of Rs 12.60 crore in June 2021. Stocks gained after the news that Restaurants in Mumbai will remain open till 10 pm. It also reports a standalone net loss of Rs12.60 crore in Q1. After the launch of Lemon Tree Hotels third property in Dehradun; stock gained 1%.

Opinion: They serve their customers with the best facilities. They're re-innovating with the latest technology, keeping the given safety and security norms of customers in mind. As we see people are more cautious than before and are looking for safe and disinfected places, even for an hour stay. Because LTH is best in all the aspects that a customer needs, I see tremendous growth. There are also new branches opening in a few locations as per data. The company will boom in the next few years.

Bajaj Hindustan Sugar Ltd. By: Payel

Introduction: Bajaj Hindustan Sugar Ltd. (BHSL) is part of the Bajaj Group of Sugar and Ethanol Manufacturing in India, based in Maharashtra. The company has 14 sugar factories throughout India. Known as one of the largest Ethanol producers in India right now, a pioneer of the Indian Ethanol Program, it currently produces 38 million litres of ethanol annually. In response to emerging market demand, the company has increased its ethanol production capacity to approximately 218 million litres per year. Bajaj Hindustan Sugar Limited said to be the largest in the country, is a member of the Mumbai-based Bajaj group, led by Mr. Alok Kumar Vaish.

Vision: “To be the leader in our chosen business area, create an organization that all our constituents are proud to be associated with, set benchmarks that will become the standard for others to emulate, and through ethical business practices create wealth for our stakeholders.”

Mission: “To transform Bajaj Hindusthan Sugar Ltd. into a dynamic and vibrant business entity where growth is an ethos and the long-term value creation for our stakeholders is the paramount objective.”

Financial Screening: Financial Year FY 2016-17 FY 2017-18 FY 2018-19 FY 2019-20 FY 2020-21 Total Revenue

4495.7

5,947.70

6,902.28

6,681.32

6,688.20

EBITDA

947.54

373.09

392.07

464.92

195.57

PBIT

704.36

175.64

187.84

248.51

-19.59

PBT

-97.72

-504.53

-133.94

-52.36

-282.68

Net Income

-91.98

-499.64

-136.56

-49.99

-279.6

EPS

-0.84

-4.54

-1.24

-0.45

-2.54

The revenue of the company increased from 16-17 to 18-19 but dipped in 19-20 possibly due to the pandemic but has shown an upward trend in 20-21. EBITA has been decreasing over the

years because the percentage increase in revenues is less than the percentage increase in expenses. Although the net loss decreased from 2018-19 to 19-20, it rose sharply in the year 2021. PBT is increased from 17-20 to 19-20 and further decreased in the year 20-21 because of the interest. Also, EPS has been decreasing over the years which is not a good sign as the company had been a loss-making one over the tenure of 5 years. Also, the company hasn’t paid any dividend to the shareholders which are identified by the DPS ratio.

Shareholding Pattern: Holder's Name

March’21 March’20 March’19

Promoters

15.43%

15.43%

15.43%

Foreign Institutions

0.14%

2.25%

3.48%

Domestic Institutional investors

39.90%

43.93%

44.20%

Public

44.36%

38.23%

36.49%

Others

0.16%

0.16%

0.16%

Promoter pledge has remained unchanged over the years. There has been a gradual decline of FII as well as DII from 3.48% in March’19 to 0.14% as of March 2021 and 44% TO 39% approximately which means disinvestment by both the domestic as well as foreign investors because the investors might be concerned about the losses over the years. But the public investments have increased significantly through the years.

RATIOS AND ANALYSIS:

RATIOS

MARCH'21 MARCH'20 MARCH'19 MARCH'18 MARCH'17

ROA

-2.04

-0.74

-0.44

-2.90

0.04

ROE

-10

-3.39

-1.88

-12.62

0.19

Total Debt/Equity

1.72

1.65

1.58

1.8

1.5

Book Value/Share

25.39

28.23

30.94

30.45

34.59

Net Profit/Share

-2.54

-0.96

-0.58

-3.84

0.07

•

Return on Assets (ROA) measures the profitability of physical assets. We can see that the ROA has been decreasing over the years. Negative returns on assets mean that the company is unable to obtain or fully use its assets to generate profitable returns. It can be further be attributed to the negative returns over the years and the decline in assets from Rs 1,434 crore to Rs 13,135 crore in FY 20-21 from FY 16-17.

•

Return on equity (ROE) measures a company's profitability relative to equity. For many years, the company’s return on equity has been negative, which means that its shareholders are losing rather than gaining value over the years.

•

The D/E ratio is a measure of the extent to which a business finances its operations through debt and wholly-owned funds. Over the years, the D / E ratio has been increasing. The increase in the level of the debt-to-equity ratio indicates that the company is using a debt fund, which has been increasing over the years which can be risky in the long term.

•

The BVPS is commonly used by investors, especially value investors, to determine whether a stock's value is justified. Here, the price of this year has cantered around Rs 1422, but it is falling below BVPS (25.39). Over the years the BVPS ratio is below market price, which means the company has not been overvalued over the years.

•

Earnings per share, or EPS, is a rate of return that measures how much a company will earn a profit. If the stock price return is negative, it means that the company has negative returns or is making losses. You can see that the company has been experiencing negative EPS ratios for years.

Statistical Analysis: Standard deviation is a statistical indicator in finance. When applied to the annual rate of return of an investment, it can reveal the risk factor of the investment. A high standard deviation represents stock volatility, while a low standard deviation usually points to stable blue-chip stocks. For BHSL, the standard deviation is 1.031117 indicating it has a low-risk factor.

Covariance can predict how two stocks or stocks and the index will interact with each other in the future. When applied to past returns, covariance helps determine whether returns in stocks

tend to move with each other. The Covariance between the stock and the Market is 1575.004 which means but it moves in the opposite direction for that of the index. The correlation coefficient shows whether there is a correlation between the price of two stocks or between a stock and the market. That is, stocks always move in the same or opposite direction. For BHSL, the correlation between the stock and the index is -0.4715, which means that the stock and the index move in an opposite direction i.e., it's volatile.

Stocks with negative skewness are those that often make small gains in the period considered and rarely make extreme or significant losses. For BHSL, the skewness is -0.2375 which is a good sign for the company as also shown in the graph below.

Competitive Analysis: Company

Current

Market

price

cap

Bajaj

P/E ratio

Beta

Net Profit

Sales Turnover

14.9

1852 Cr

-6.62

0.63

-279.6

6671.67

366.9

7770 Cr

16.19

0.77

469.77

4811.66

412.6

7228 Cr

16.16

0.71

864.86

2024.25

27.35

5640 Cr

-49.15

0.56

55.7

5543.3

Hindusthan Sugar Ltd Balrampur Chini Mills Ltd E I D-Parry (India) Ltd Shree Renuka Sugars Ltd Currently traded at a significantly low price compared to its peers, and even with a net loss of 279 crores, BHSL had reported the highest sales turnover. Which means the company has a good receptivity among the customer where the product is concerned. A low market cap compared to its peers indicates that the business has not yet reached its maturity stage and is hence susceptible to further growth in the future. A negative P/E ratio is a bit of a concern as it means that there have been negative earnings in recent years. But a low BETA compared to its peers indicates lower risk but also lower returns.

News Analysis: On August 26, 2021, the Union Cabinet approved the fair and remunerated price (FRP) of sugarcane for the 2021-22 sugar season (October-September). More broadly, sugar stocks traded higher, and BHSL's trading volume soared by more than 4.5%. Also on August 17, 2021, consumer goods stocks are trading inactive areas, and the S & Ps BSE FMCG industry index rose by 84.27 points, or 0.61%, to 13,808.06. BHSL had the largest increase, with an increase of 2.96%.

Conclusion: Although based on the closing price of 6.15 per share last year and the beginning of the year price of 14.9 per share, BHSL stock price has risen by more than 100% so far. But considering all the financial data and historical price analysis and the fact that all companies in the sector have achieved considerable rates of return, as of August 27, 2021, the fundamentals of Bajaj

Hindustan Sugar seem to be average, so the investors may want to wait before making a longterm investment. But if investors already own shares in the company, investors can pay close attention to price fluctuations and company analysis.

Network 18 By: Arindam

What’s Inside?

Network18 Media & Investments Ltd was formerly called SGA Finance and Management Service, and it was incorporated as a private Limited company on February 16, 1996. From 1999 to 2005 they launched their news businesses on both television and digital platforms (CNN, CNBC, News18, and MoneyControl digital app). And during the years 2005 to 2011, they had started to build their new space by stepping into entertainment, movies, and digital Business. In April 2006 the name of SGA Finance and Management Service was changed to Network18 Fincap Private Limited. Later in November, they were converted from a private limited company to a public company. In February 2007 they got listed in the Bombay Stock Exchange and National Stock Exchange and in December 2007 they changed the organization name to Network18 Media & Investments Ltd from Network18 Fincap Private Limited. The next major event held was in 2012 apart from the business’s previous existence, they started introducing regional News channels.

In 2014 there was a change in ownership and at present independent Media and Trust are the owners and Reliance is the sole beneficiary of (IMT).

Current price

49

52 weeks high 58

Book value per share 36.03

52 weeks low

31.35

Beta

0.87

Market cap

5130 crores

P/B

1.36

Volume

6,45,363

P/E

158.92 Sector P/E

-15.43

Financial Analysis: Financial Year

FY 2016-17

FY 2017-18

FY 2018-19

FY 2019-20

FY 2020-21

Total Revenue

1,545.77

1,954.02

5,158.34

5,390.91

4,748.95

EBITDA

-101.09

73.58

109.87

553.70

815.70

PBIT

-180.99

-15.16

-32.18

379.07

668.89

PBT

-261.16

-111.40

-230.65

143.20

511.77

Net Income

-233.44

-153.93

-302.97

-236.61

32.28

-2.25

-1.49

-2.93

-2.29

0.31

EPS

Total revenue from operating activities has increased in the last five years by 207.23% and the organization has started to earn profit from the year 2020-2021. From the year 2014, the organization made new investments since the investments made in the past were not fetching expected profits for the organization. As per the above table the EPS for the year 2016 to 2020 was negative, however during the F.Y 2020 -2021 there has been an increase in profit and the earnings per share has also increased.

Share Holding Pattern: Shareholders Mar-20 Jun-20 Jun-20 Dec-20 Mar-21 Jun-21 Promoter

75

75

75

75

75

75

FII

3.15

3.15

3.09

3.01

3.81

3.8

DII

1.29

1.01

0.34

0.36

0.08

0.07

Public

20.56

20.84

21.57

21.63

21.11

21.13

Since 2017, the promoters have been holding 75% i.e. majority of the shares in the company.

Whereas, there has been a fluctuation in the shareholding of FII since 2018. Shares held by FII reduced from 4.05% to 3.80% and shares held by DII decreased from 1.37% to 0.07% as of the quarter ending June 2021. However, during this period the Retail investors have increased their proportionate shareholding to 21.13%. In the year 2018, the company had acquired a lot of businesses therefore was at loss. However, in the last two years, they started earning profits and investors apart from the promoter have shown faith in the company.

Ratio Analysis: PER-SHARE RATIOS

MARCH'21 MARCH'20 MARCH'19 MARCH'18 MARCH'17

Return on Assets

0.39

-2.74

-3.58

-2.04

-4.62

Return on Net worth /

5.90

-45.83

-37.36

-13.58

-18.19

Total Debt/Equity (X)

4.41

6.32

3.71

1.94

1.02

Book Value/Share

36.37

31.08

31.14

33.05

28.11

12.12

1.94

-2.40

-9.56

-16.96

Equity (%)

(Rs.) Net Profit/Share (Rs.)

Though in the years from 2017 to almost 2020, return on assets, return on Net worth and Net profit of the organization were negative they have shown improvement in the financial year 2021. In fact, in FY2020 and FY2021 the overall performance of the organization has shown positive signs. In the previous F.Y, the organization has booked profit and has shown an intent to normalise. The debt-to-equity ratio in the year 2019 march was 6.32 which got reduced to 4.41 and book value has increased to 36.37. Then they can purchase assets or invest in new business from the assets available.

Technical Analysis:

From the above chart, it's seen that on 6th December 2016 the market price of the share was Rs 32.45. However, on 8th January 2018, the market price of shares reached a 5 Years high of Rs.62.40, and later on, the share prices have drastically fallen to Rs 15.50 on 23rd march 2020.

From there on the price of the share has seen an increase in the market price, though there is a mixed trend found

Peer Competitor: The leading competitor in this industry is Sun Tv Network, the shares are traded in the amount of Rs 482.65 followed by TV Today Network and Zee entertainment. Amongst its competitors, Network 18 has recorded a decent 1-year performance of 20.1%, which is a good sign. The organization recorded moderately good net sales and net profits over the years. However, the high debt-to-equity ratio especially when compared with its competitors is quite alarming. It has high leverage when comparing other organizations from the same sector which means holding the stock is risky.

Merger and Acquisition: Network18 operates in a joint venture with Viacom, which is called Viacom18, which owns the entertainment channels like MTV, VH1, and Nickelodeon channels in India and through a business transfer agreement manages Studio18. It also includes the recently launched Colors, a Hindi general entertainment channel.

Through its holding in Television 18 India (TV18), the company operates India’s leading business news television channels, like CNBC-TV18 and CNBC Awaaz. It also operates Web18, which is one of the leading internet players, and Newswire, one of India’s leading real-time financial information and news terminals.

The acquisition of Infomedia, a leading player in the special interest publishing and printing operations space, marked its entry into the print media, which was followed by a collaboration with Forbes media for the launch of a business magazine in India. The company operates in the general news and entertainment space through its holdings in IBN 18 Broadcast with leading general news channels CNN-IBN and IBN7. It has launched IBN Lokmat, a Marathi news channel in partnership with the Lokmat group. As of 1st February 2020 TV18, Broadcast, Hathway Cable & Datacom, and DEN Networks were to merge into Network18 Media & Investments.

News Analysis: Revenue from operations for Q1FY22 came in at Rs 1,214.43 crore compared to Rs 807.07 in Q1FY21 and Rs 1,414.70 crore in the March 2021 quarter. This led to the jump in the price of the shares by Rs 15. Overall TV viewership rose 9 % (QoQ) led by lockdowns, a continuation of original content telecasts. Entertainment viewership also grew 8 percent (QoQ), some of which were contributed by sports. Pay-GEC viewership also grew in single digits across both Hindi and Regional as original programming continued unabated to a large extent. It was also noted that the share of TV entertainment rose further to around 11% in Q1FY22. Moreover, Moneycontrol Pro was the only Indian app ranked amongst the top-20 global news subscription services and is the third-largest such platform in Asia according to the International Federation of Periodical Publishers. The group is planning to bid for a sports broadcast and they are in serious talks to broadcast the T10 Abu Dhabi league. On 1st February Hatchway cable, Den Network was merged with Network 18. Network 18 has settled the long-running case in SEBI by paying Rs 1.56 crores. This case was filed in 2012. However, on 16-03-2021 the case against network 18 was resolved.

Opinion: In the years 2017 and 2018, the organization was facing losses and the revenue of the organization was contracting. However, during the year 2021, the organization booked profits and there was an increase in the revenue of the organization. In the last year, the price of the share has increased by 20.10% and in the Quarter ending June, the operating margin has reportedly increased. At present Network18 Media & Investments Ltd is considered to be one of the leading full play media conglomerates with interests in television, internet, print, film entertainment, mobile content, and OTT content. From the year 2021, the organization has started returning to track in financial terms. As of March 2021, Voot had 1 million active users who have subscribed. The organization earns the maximum revenue from the operation of the TV. The market share as of August 27th is Rs 49.00 and for an investor who is planning to invest for the long-term this can be an ideal addition to their portfolio.

Alok Industries Ltd. By: Aishwarya

Introduction: Alok Industries Ltd is a classic example of this. Throughout its lifetime the company has seen many highs and lows, from being aggressive to bankrupt, from being a market leader to not having enough funds to meet its fixed costs, the company has seen it all. So, what went wrong?

How did the company recover from its mistakes? How is the company currently performing?

Alok industries is a textile firm that is primarily operating in cotton and polyester markets. The company manufactures textiles, including mending and packaging as well as leather and other clothing products. Though the company initially began with polyester texturizing, it later integrated backward into weaving, knitting, and processing to ensure quality and cut down on cost.

The company has a strong presence in the retail sector, between the years 2004 to 2013, the company invested more than 1000Cr to set up manufacturing units and open more than 250 outlets under the brand name “H&A” in India and more than 210 outlets under the brand name “Twenty – one” abroad.

Particulars Sales

2017

2018

2019

2020 2021

8723

5513

3352

3328

3847

Other income

65

256

18

39

26

Total income

8788

5770

3370

3367

3874

Total expenditure 10739

19627

-3014 1945

7838

EBIT

-1951

-13857

6385

1422

-3963

Interest

3441

4711

4308

113

489

Tax

-2320

10

0

-2

1219

Net profit

-3072

-18579

2077

1311

-5672

EPS

-22.71 -136.82 15.17

9.05 -15.19

From the above table, it becomes evident that the company is not performing its full potential.

The sales of the company have been constantly declining with a little increase in the year 2021.

However, the total expenditure and interest burden are weighing heavily on the company resulting in losses. The company's capital structure was not well defined, it relied heavily on loans instead of diversifying its sources. Due to its recurring losses, the company did not pay

any dividend in the past 5 years, even though the company made some profits in the year 2019 and 2020, the funds were retained to repay creditors and meet future contingencies.

The downfall for the company began with its aggressive strategy of borrowing huge loans and investing in its operating activities. The borrowing of the company rose almost 7 times from the year 2007 to 2017. Though the sales have initially increased, there was a drop from the year 2015, making it difficult for the company to repay its interest on borrowings. The company went for huge expansion projects without properly forecasting the demand in the market. It invested in totally unrelated businesses such as infrastructure projects. Due to heavy competition from domestic players and a drop in exports, the sales of the company dropped significantly resulting in negative operating profits and cash flow from the company. Due to all this, in the year 2017, Alok Industries was admitted under corporate insolvency and resolution process as per the Insolvency and bankruptcy code 2016.

From July 2017, the company discontinues its business of trading in fabrics, the company’s accumulated losses amounted to Rs.17943.92Cr and Total liabilities exceeded total assets by Rs. 15200.54Cr. Everyone thought it was the end of the Alok industries, however, the company rose like a phoenix from ashes when Reliance Industries Ltd and JM Financials Ltd invested Rs.5050Cr in the company in the year 2019. This made the stock price soar from Rs.4 to Rs.16 in less than a month. The company used these investments to repay its creditors which reduced its interest cost by almost 90%. The company reported an exceptional gain of Rs. 2052.55 Cr in Jan – Feb 2020, due to its debt resolution plan.

Shareholding Pattern:

Alok industries shares are currently trading in a price range of 18-35, having a face value of Rs.1 per share and a total market capitalization of Rs. 11072 Cr. The outbreak of covid 19 brought forward another challenge to the company, however, the company played it to its advantage by manufacturing and supplying PPE kits that were in huge demand at that time. Though the historical values are pointing against the company, it is getting

up fast on its feet. The company earned a net profit of Rs.4166Cr during the Trailing Twelve months resulting in a 95% increase in profit. It is showing a positive EPS and P/E ratio of 8.39 and 2.66 respectively during the trailing twelve months. The change in ownership brought a new perspective to the company. The company’s board of directors is now focused on adopting business plans that fully utilize the existing capacity of the company and explore new avenues to enhance the revenue.

By analysing the current prospects of the company, we can understand that the company still needs some time to settle its affairs and yield its full potential, however the growth curve of the company has begun, if it can maintain stability in its growth, the company’s shares will increase rapidly. If you are a risk-averse investor, be patient till the next quarter and keenly observe the company’s performance and invest when it starts to show stability. But if you are a risk-tolerant investor, a few shares of Alok Industries in your basket might yield surprising returns as the shares are trading at a minimal price and have strong growth potential.

NBCC By: Sriram Introduction: The old Ministry of Works, Housing & Supply, which is now known as the Ministry of Housing and Urban Affairs, established NBCC in 1960 as a wholly-owned Government of India corporation. NBCC began its international operations in 1977.

The Indian government firm NBCC India Limited previously National Buildings Construction Corporation Limited is a blue-chip company. It is owned by the Indian government's Ministry of Housing and Urban Affairs. The Company's current operations can be divided into three categories. (i)

Project Management Consultancy, including redevelopment of government properties,

(ii)

Engineering, Procurement & Construction

(iii)

Real estate Development.

Vision: With respect, boldness, and empathy, they lead. They believe in creating new ways to help students, communities, and each other. They are critical to New Brunswick's and the province's success. They value exceptional collaboration both inside the College and with the surrounding communities.

Financial Stability and Profits: In 2007, NBCC paid a dividend to the Government of India for the first time and since then, it has been paying a dividend every year. In 2008, the Ministry of Heavy Industries and Public Enterprises Department of Public Enterprises received approval from the Ministry of Housing and Urban Affairs to upgrade NBCC from a Schedule "B" public sector enterprise to a Schedule "A" public sector enterprise through office memorandum No. 9(8)/2008-GM dated 3 October 2008.

In April 2012, NBCC became public and was listed on the BSE and NSE. The Government of India awarded NBCC the Mini Ratna-I rank in September 2012. With effect from June 23, 2014, the Government of India designated NBCC as a 'Navratna Company.' Because of its status as a 'Navratna PSE,' NBCC was able to invest up to Rs 1,000 crore without the need for explicit government approval.

On November 6, 2018, NBCC purchased a 100% share in Mini Ratna hospital consultant firm Hospital Services Consultancy Corporation Limited from the Ministry of Health and Family Welfare. In 2017, the organization bought a majority position in Hindustan Steelworks Construction Limited, a government-owned company under the Steel Ministry. In 2018-19, NBCC's total revenue was INR 10151.37 crore. Profit after tax for the same period (2018–19) is INR 391.64 crore, with an order pipeline of almost INR 75,000 crore. Net worth is INR 1508.41 crore. The Earning per share is 2.14, P/e ratio 21.07, Return on Equity 13.69% there is a very low Return on equity for the last 3 years, even the Net profit margin has fallen from 5.65 in 2018 to 1.53 in 2020, Debts of the company are almost nil.

Functional Setup: New Delhi is home to the NBCC's Corporate Office, which serves as a policymaker, planner, and general controller. Project Management Group, Business Development, Real Estate, Vigilance, Contract

Engineering,

Law,

Centralized

Procurement

Group,

Finance,

Corporate

Communication, and Personnel & Administration are some of the organizational divisions that manage corporate functions.

The corporation's activities are divided further into Regional Business Groups, Strategic Business Groups, Zones, Units, and Sites. RBG/SBG/Zones are overseen by executives with the ranks of ED/CGM/GM, who report directly to the Directors at HO. An officer with the rank of AGM/DGM/PM/DPM/SPE leads the units. Depending on the type and importance of the project, the Unit in In-charge is responsible for ensuring that it is completed efficiently and within budget. He or she is aided by other technical staff. The unit In-charge consults with the Zonal In-charge regularly to ensure that the necessary inputs and resources are available for the work to be completed.

Business Segments: •

Project Management Consultancy: NBCC primarily serves as a consultant on projects from inception to completion and upkeep. Consultation fees paid by the government body in charge of the project account for 93 percent of the company's earnings.

•

Engineering Procurement and Construction: NBCC performs feasibility studies, procurement, construction, designs, and conceptualizing for cooling towers, chimneys, coal plants, and ESIC hospitals as part of its EPC services. The public-sector behemoth serves as an EPC contractor and works with numerous government ministries to get projects approved. EPC revenues account for a little portion of the company's total revenue.

•

Real Estate Development: In 1988, NBCC began developing real estate. It has been working as a land management agency for ten CPSEs, including HMT Watches, Hindustan Cables, and Indian Drugs and Pharmaceuticals Ltd, to build cost-effective housing projects since March 2019.

NBCC has been focusing on self-sustaining revenue generation through redeveloping residential complexes for government personnel and railway stations. It commercializes adjacent property parcels in the neighbourhood of the projects and makes them completely self-sustaining.

Overseas Operations: NBCC began working on international infrastructure and construction projects in the Middle East and Africa in 1977. National Prison Academy in the Maldives, Supreme Court building and Social Housing project in Mauritius, Mahatma Gandhi International Convention Centres in 9 African countries, and the India Pavilion at Expo 2020 are among the company's recent projects.

Affected Share Price: After awarding a work order for the construction of residential towers and civic amenities in New Delhi on transit-oriented development norms, engineering procurement, and construction mode to NCC at their quoted price of Rs 859, shares of NBCC (India) rallied 6% to hit a 52-week high of Rs 59.80 on the BSE in intra-day trade on Tuesday, gaining 10% in the past two days. Civil engineering construction services are provided by the state-owned NBCC (India). PMC, real estate development, and engineering, procurement, and construction are the three segments in which the company operates (EPC). The government-owned 61.75 percent of the corporation as of March 31, 2021.

Risk: NBCC is one of India's best-performing government-listed companies. Its IPO took place in March 2012, and its market cap has grown at a CAGR of 77 percent since then. an accomplishment rarely achieved by publicly traded corporations. Since its IPO, the stock has returned more than 16 times its initial investment Conclusion: NBCC has made it a policy to include environmentally friendly features in all of its projects.

Zero-waste, dual plumbing, rainwater harvesting, solar energy, smart electricity metering, and LED/energy-efficient fixtures are among the features. Green Building standards are followed in all of the company's projects. Steel structures, modular construction, pre-cast, pre-fab components, and low-weight concrete slabs are among the techniques and materials used by the company. To contribute to a safer environment, the company also maintains rigorous adherence to the requirements for reducing air and water pollution at its project sites. NBCC's valuations are extremely reasonable. This company has a market capitalization of roughly Rs 5780 crore. The company has no debt, which bodes well for the future. On the NSE, NBCC's stock is now trading at roughly Rs 32. NBCC is almost a debt-free company.

Cash Burn In Hathway Shares Today Will Make Cash Mine In Future By: Anant Rai Introduction:

Current price

23

52 week high 36.7

Book value per share 22.59 52 week low

20.55

Beta

0.98

Market cap

4071

P/B

1.02

Volume

19,36,798

P/E

17.29 Sector P/E

21.58

Hathway Cable & Datacom Ltd (HCDL), listed as Hathway on NSE and 533162 on BSE, is a cable television service operator company headquartered in Mumbai. Hathway stretched its arms to the broadband division using the existing CATV (Cable Television) network in the year 2006 and they were the first one to offer broadband internet with cable in India. Hathway’s aggressive step towards the future made them strategically invest in acquiring local cable distributors across states which are now referred to as GTPL Hathway Limited, in which they are having 37.32% Equity Holding. The Company’s aim can be best described as “Pulling on Strengths to Push Growth” & their vision from “To be a single point access provider, bringing into the home and workplace a converged world of information, entertainment, and services” . In summing up, we can say Hathway Cable & Datacom Ltd is an organization having three verticals: Broadband business, Hathway Digital Ltd (Cable TV Business), & GTPL Hathway Ltd. Broadband business: HCDL, the parent company, has internet distribution as its main function using FTTH technology in partnership with ZTE & Cisco.

Hathway Digital Ltd This vertical of HCDL focuses on delivering Cable TV services through a network of Local Cable Operators (LCOs).

GTPL Hathway Ltd

GTPL Hathway Ltd is engaged in Cable TV distribution and high-speed Broadband service through its wholly-owned subsidiary in various parts of the country.

Fundamental Screening:

Financial Year FY 2016-17 FY 2017-18 FY 2018-19 FY 2019-20 FY 2020-21 Total Revenue

1386.23

1544.36

1619.20

2044.14

1874.22

EBITDA

259.93

236.98

245.97

381.99

334.76

PBIT

-40.83

139.79

130.05

229.8

164.37

PBT

-151.13

61.45

27.47

113.7

144.52

Net Income

-192.68

-105.21

-186.53

105.45

253.87

-2.33

-1.3

-1.9

0.59

1.43

EPS

-

Total revenue of the company increased from 2017-2020 and reduced by Rs 169 Crores from 2020- 2021.

-

Total expenses of the company increased from 2017-2020 as the business operation got stretched and reduced byRs 295 Crores from 2020-2021.

-

PBT of the company increased from 2017-2018, reduced from 2018-2019, & increased thereon to 2021.

-

Positive cash flow from operating activities shows an increase in revenue from an operation.

-

Negative cash flow in both financing and investing activities shows a positive sign for an investor as the company is using all their surplus cash in cleaning their debt and investing in financial instruments (Mutual funds).

Shareholding pattern

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Others

2017

2018

2019

2020

2021

0

0

0

0

0.01%

GeneralPublic

2.79

2.79

2.79

6.326

12.19%

DII

1.626

1.626

1.626

3.794

6.96%

FII

1.401

1.401

1.401

3.27

5.84%

Promoters

94.09

94.09

94.09

86.61

75.00%

0

0

0

0

0

Holder's Name

Holder's Name

Promoters

FII

DII

GeneralPublic

Others

-

Outstanding shares of the company from the year 2017-2018 were 83,04,94,500.

-

Outstanding shares of the company increased to 1,77,01,04,500 in the year 2019 when the company issued 93,96,10,000 preferential shares to Reliance Jio.

-

As per SEBI rules for companies listed on exchanges, Promoters’ holding in the company should not exceed 75%.

- Abiding by the rules, Company’s promoter (Reliance Jio) has to offload 13,25,40,515 shares into the market from the year 2020 – 2021.

Performance Ratio:

Ratio

FY 2016-17 FY 2017-18 FY 2018-19 FY 2019-20 FY 2020-21

ROA

-5.65

-3.03

-2.91

1.62

5.59

ROE

-21.61

-12.5

-5.15

2.77

6.32

P/E

-16.18

-26.04

-15.24

22.8

17.97

1.19

1.27

0.42

0.52

0

Debt/Equity

-

ROA ratio gets an increase from 2017-2021 and it suggests that the company is utilizing its assets effectively to generate profits.

-

ROE ratio gets an increase from 2017-2021 and it suggests that the company is utilizing their shareholder’s fund effectively to generate profits.

-

P/E ratio gets an increase from 2017-2021 and it suggests that the market is willing to pay today against its earnings.

-

Company was overvalued in the year 2020 as the P/E ratio was more. It has come down to 17.97 and the expected P/E ratio for the upcoming year will be around 13-15.

-

Debt/equity ratio decreased from 2017-2021 and has come to 0 which means that this company is having no debt on them.

News impacted on the share price: -

Hathway Cable shares price rose by 8% in July 2021 as the sale of the company rose by 5.19% to Rs 441.33 crores in June 2021 against Rs. 419.56 crores in June 2020.

-

Hathway Cable shares price tanked by 3% in March 2021, when Reliance Jio offloaded the shares in the market through OFS.

-

This was done by the promoter only to abide by the rules set by SEBI which states only 75% shares can be held with promoters.

Value Investing:

Company

-

Current Price Market Cap P/E

Beta Debt to Equity

Hathway Cable 23

4071.24

17.97 0.98

0

Dish TV

12,75

2347.6

-1.51

0.18

Den Networks

47

2242.95

11.95 1.06

0

Catvision

10.89

5.94

8.48

0.35

0.9 0.16

Debt/equity ratio is 0 for two companies (Hathway Cable & Den Networks) among the competitors of Hathway Cable.

-

P/E ratio suggests that Hathway Cable is overvalued when compared to Den Network.

-

Beta suggests that shares of Den Network are riskier than shares of Hathway Cable.

Conclusion: Two ratios out of the three main ratios suggest investing in Hathway Cable shares. Using ratio or relative approach for equity valuation, the present value of equity seems to be 30.11 which is currently way above the LTP of share. At this point, the share price is undervalued and this is the right time to invest in the shares of Hathway & hold it for 10-12 years as the future of remote and sharing of information is the next revolution which we will see in the market.