Dalal Street Investment Journal - July 09, 2019

DSIJ.in JULY 8 - 21, 2019 I DALAL STREET INVESTMENT JOURNAL (^63)
I have some shares of Kridhan infra. Can I hold for a
long-term period?

• Swarup Chandra

I am holding 14,000 shares of Welspun India at the

cost of `75 per share. Should I hold or book loss at it

is now trading around `56.

• Monesh Menghani

WELSPUN INDIA LTD KRIDHAN INFRA LIMITED

K

ridhan Infra Limited is a company which operates as an

engineering company providing pre-cut readymade steel

bars which are used to join two rebars of the same

mechanical splice and concrete piles, bored and cast-in place

using dry and wet boring methods based on ground conditions

enabling installation of larger diameter piles and permit

construction through particularly stiff or hard soil.

In India, the company also provides building solutions used for

construction of residential houses and buildings and also

supports with soil investigation and assessment for proposed

construction. The company also conducts business operations

in Singapore, Myanmar, Malaysia and other South East Asian

countries.

From the financial point of view, the net sales for Q3 of FY19 of

the company were reported at `15.32 crore, a decrease of 30.14

per cent as compared to the net sales of `21.93 crore for Q3 of

FY18. Its PBDT stood at `0.29 crore and `0.45 crore for Q3 of

FY19 and FY18, respectively. In Q3FY19, the net profit was

`0.12 crore, a decrease of 25 per cent when compared to the net

profit of ` 0.16 crore in the same quarter of the previous fiscal.

Looking at the company’s annual financials, the net sales for

FY18 were reported at `88.01 crore which is an increase of 21.58

per cent over the net sales of `72.39 crore for FY17. For FY18,

the PBDT of the company stood at `2.13 crore, a decrease of

1.84 per cent from the PBDT for FY17 which stood at `2.17

crore. In FY18, the company’s net profit decreased by 14.58 per

cent to `0.82 crore from the net profit of `0.96 crore posted in

FY17. The company has been brought under the Additional

Surveillance Measure (ASM) Long Term Framework by the

Securities and Exchange Board of India (SEBI). Due to this,

the recent financial information of the company has not been

published. So, considering the above factors, we recommend

an SELL.

W

elspun India Ltd. is an Indian company conducting

business operations in the textile sector. The

company’s manufacturing products include home

textile products such as terry towels, bath towels, bath robes of

various varieties, bed linen, pillow covers, bed sheets and rugs,

carpets and other home furnishing products. Its power

manufacturing business includes power generation. Other than

this, the company owns brands like Christy, Spaces and

Welhome. The company exports more than 94 per cent of its

textile products to more than 50 countries.

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

sales of `1,257.42 crore, an increase of 1.64 per cent as compared

to `1,237.14 crore reported for Q4 of the previous fiscal. As for

the PBDT, it was 2.97 crore and220.20 crore for Q4 of FY19

and FY18, respectively. In Q4FY19, the company incurred a net

loss of 43.70 crore as against a net profit of72.78 crore posted

in the same quarter of the previous financial year.

On the annual front, the company posted net sales of `5,395.27

crore in FY19, which is 8 per cent more than the net sales of

`4,995.87 crore reported in FY18. For FY19, its PBDT stood at

`577.37 crore, a decline of 49.16 per cent when compared to

`861.19 crore for FY18. In FY19, the net profit decreased by 53.4

per cent to 141.77 crore from304.10 crore incurred in FY18.

The Spaces business of Welspun India Limited made a domestic

market contribution of 9 per cent of Welspun India’s sales figures

for the financial year ended March 2019.

Looking at the futuristic business expansion, the company has

launched e-commerce business for textiles focused on the

markets in United Kingdom and West Asia. It is also venturing

into advanced textile products such as making disposable towels

and wet wipes out of non-woven textiles. The company is

exploring more opportunities in flooring material and home

décor in domestic market. Hence, we recommend a HOLD to our

investor-readers.

BSE/NSE Code 514162 / WELSPUNIND

Face Value ` 1

CMP `57.85

52-Week High 78.20 / Low46.25

Your Current

Profit/(Loss)

(22.86 per cent)

BSE/NSE Code 533482 / KRIINFRA

Face Value ` 2

CMP `9.82

52-Week High 85.00 / Low8.90

Your Current

Profit/(Loss)

--

HOLD SELL

(Closing price as of July 02, 2019)