Dalal Street Investment Journal - July 09, 2019

62 DALAL STREET INVESTMENT JOURNAL I JULY 8 - 21, 2019 DSIJ.in^

STATE BANK OF INDIA INFIBEAM AVENUES LIMITED

Are shares of Infibeam Avenues better for

investment at the current price for a holding period

of 3 years? Should I buy?

-Pars Pandita

I am holding 1,000 shares of State Bank of India

bought at an average price of `280 should I hold or

sell?

• A Ramalingam

BSE/NSE Code 500112 / SBIN

Face Value ` 1

CMP `364.50

52-Week High 365.00 / Low247.65

Your Current

Profit/(Loss)

30.17 per cent

BSE/NSE Code 539807 / INFIBEAM

Face Value ` 1

CMP `44.40

52-Week High 242.80 / Low27.65

Your Current

Profit/(Loss)

--

I

nfibeam Avenues Limited is a company engaged in providing

software development services and maintenance, web

development, e-commerce and other services. The company’s

product selling areas include sale of software, sale of products

and other e-commerce related services.

BuildaBazaar is the company’s online selling platform which

allows all merchants to get access to e-commerce. It has digital

solutions, which include online storefront, mobile applications,

digital catalogue, payment gateway, etc. Infibeam.com is another

online selling solution of the company, including a multi-

category e-commerce website having range of products such as

mobiles, tablets, computers and its accessories, electronic

appliances, fashion, books, etc. The company’s flagship electronic

product is its e-book reader which is marketed under the name

‘Pi’, of which currently there are two successful versions. The

e-commerce company is headquartered in Ahmedabad and has

offices in Delhi, Mumbai and Bengaluru.

On the financial front, for Q4 of FY19, the company reported net

sales of `168.21 crore, an increase of 94.7 per cent as compared to

`86.38 crore reported for Q4 of the previous fiscal. The PBDT

was `56.73 crore and `13.92 crore for Q4FY19 and Q4FY18,

respectively. In Q4 of FY19, the company incurred a net profit of

30.70 crore as against a net loss of2.20 crore incurred in the

same quarter of the previous fiscal.

On the annual front, in FY19, the company reported net sales of

`544.66 crore, which is 78.07 per cent more than the net sales of

`305.86 crore reported in the previous fiscal. For FY19, the

PBDT stood at `108.11 crore as against `83.09 crore for FY18. In

FY19, the net profit increased by 188.72 per cent to `38.92 crore

from `13.48 crore posted in the previous fiscal. Being a small-cap

company, its market cap is `2,2928.88 crore. Thus, from the

analysis of the financials of the company, we would recommend

our investor-readers to EXIT.

S

tate Bank of India is an Indian multinational, public sector

banking and financial services company. Headquartered in

Mumbai, Maharashtra, it is one of India’s largest bank

having 23 per cent market share in assets and one-fourth market

share of the total loan and deposit market.

The company provides a range of products and services catering

to the needs of individuals, commercial enterprises, large

corporates, public bodies and institutional customers. Some of

its service segments include investment portfolio and trading in

foreign exchange contracts and derivative contracts, corporate

accounts group, stressed assets management group, retail

banking, personal banking, etc. Other non-banking activities

include subsidiaries and joint ventures like SBI Life Insurance

and SBI General Insurance. It has approximately 22,500

branches and 58,000 ATMs.

On the financial front, the total interest income of the bank rose

by 14.92 per cent YoY to `22,954 crore for the fourth quarter of

FY19 as against `19,974 crore for the same quarter of the

previous fiscal. Evaluating the asset quality, the GNPA ratio was

7.53 per cent in Q4 of FY19, down by 338 bps when compared

to 10.91 per cent in Q4 of FY18. The net operating profit for

Q4FY19 rose by 6.61 per cent YoY to `16,933 crore as against

`15,883 crore in Q4 of the previous fiscal. The gross advances

also remained strong with 11.96 per cent YoY growth at

`22,93,454 crore in Q4FY19 as against `20,48,387 crore in the

same quarter of the previous fiscal. The capital adequacy ratio

for Q4FY19 was 12.72 per cent and 12.60 for Q4FY18.

Considering the financials on the annual front, the total interest

income rose by 18.03 per cent to `88,349 crore in FY19 from

`74,854 crore in FY18. The net operating profit decreased by

6.85 per cent to `55,436 crore in FY19 as compared to

`59,511 crore in FY18. We would recommend a HOLD to our

investor-readers on the basis of strong financials of the

c omp any.

HOLD EXIT

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