Dalal Street Investment Journal – July 20, 2019

126 DALAL STREET INVESTMENT JOURNAL I JULY 22 - AUG 4, 2019 DSIJ.in^

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Scrip’s Movement

Scrip’s Movement

(Closing price as of July 15, 2019)

Reviews

DS

In this edition, we have reviewed ITC Ltd. and TV18 Broadcast. We suggest our reader-investors to HOLD in ITC Ltd.

and TV18 Broadcast.

ITC LTD.

BSE CODE

500875

Face Value

` 1

Reco. Price

` 296

HOLD CMP - 271.90

250.00

260.00

270.00

280.00

290.00

300.00

310.00

Change

8.47 Per Cent

W

e had recommended ITC in

volume 34, issue no. 4, dated

Jan 21–Feb 3, 2019, under the

‘Choice Scrip’ segment. The stock was

trading at `296 then and was

recommended because of the company’s

differentiated product development

capacity, robust portfolio of brands and

efficient marketing and distribution

network.

ITC is one of India’s foremost private

sector companies with a market

capitalisation of US $ 45 billion and a

turnover of US $ 7 billion. ITC has a

diversified presence in FMCG, hotels,

paperboards & specialty papers,

packaging, agri-business, and

information technology. The company is

rapidly gaining market share even in its

nascent businesses of packaged foods &

confectionery, branded apparel, personal

care and stationery.

On the financial front, the net sales for

Q4FY19 has climbed 12.69 per cent to

`12064.15 crore on a YoY basis from

`10,705.75 crore. The PBIDT has also

jumped 10.32 per cent YoY in Q4FY19

and came in at `4571.65 crore from

`4144.01 crore posted in Q4FY18. The

PAT for Q4FY19 stood at `3481.9 crore

as against `2931.71 crore in Q4FY18.

On the annual front, the net sales were

up by 2.88 per cent in FY19 to

`45,221.41 crore from `43,956.90 core in

FY18. The PBDT stood 11 per cent

higher at `17,305.51 crore in FY19 from

`15,540.98 crore posted in FY18. The

W

e had recommended TV18

Broadcast Ltd. in volume 33,

issue no. 24, dated Oct 29–

Nov 11, 2018, under the Low Priced

Scrip. The stock was trading at `36.55

then and was recommended owing to

positive quarterly performance, attractive

valuations and growth prospects.

TV18 Broadcast is a media company

belonging to Network 18 Group engaged

in television broadcasting networks.

It is based in Mumbai. The company

operates news channels, which also

include various regional news

channels, entertainment channels,

channels for kids, regional entertainment

channels and a reality entertainment

channel.

On the financial front, the company

posted net sales of `288.34 crore for

Q4FY19, up by 26.43 per cent from

`228.06 crore in Q4FY18. The PBDT was

`28.46 crore, depicting a fall of 44.50 per

cent in Q4FY19 from `51.28 crore posted

in Q4FY18. The company posted a net

profit of `17.98 crore in Q4FY19, a

decrease of 35.83 per cent compared to

the net profit of `28.02 crore in Q4FY18.

On the annual front, the net sales came

in at `1079.21 in FY19, up by 46.74 per

cent from `735.45 crore in FY18. The

PBDT in FY19 fell by 67.55 per cent to

`54.30 crore from `167.32 crore in FY18.

The company’s net profit in FY19 was

`85.05 crore, down by 11.75 per cent

from `96.37 crore posted in FY18.

PAT reached `12,464.32 crore, up by

11.06 per cent from `11,223.25 crore

posted in FY18.

ITC is set to foray into new categories

and sub-segments in FMCG vertical

which will be supported by multi-

dimensional investments and strategic

opportunities for acquisitions. Since

our recommendation the stock price

has fallen around x per cent, however,

we recommend a HOLD looking at

strong financials.

Post our recommendation, the stock has

fallen by 35.56 per cent. For its news

gathering operations, TV18 Broadcast

recently signed a multi-year lease

agreement for more than a hundred units

of LiveU’s flagship LU600 HEVC

solution. We recommend a HOLD.

TV18 BROADCAST

BSE CODE

532800

Face Value

` 2

Reco. Price

`36.55

HOLD 35.56 Per CentChange CMP - `23.20