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ONGC Q2 profit surges 6.6 times on tax writeback, higher crude prices

by 5paisa Research Team 12/11/2021

State-run Oil & Natural Gas Corp reported a sharp jump in its net profit for the second quarter of this fiscal year, as it benefited from higher crude oil prices and adopted a lower tax structure.

Standalone net profit for the July-September period rose 6.6 times, or 565%, to Rs 18,348 crore from Rs 2,758 crore a year earlier, the state-run explorer said Friday. Profit exceeded analysts’ estimates of around Rs 6,300-6,400 crore.

Gross revenue climbed 44% to Rs 24,353 crore from Rs 16,916 crore.

ONGC said its operating margin expanded to 48.17% in the second quarter from 32.78% a year ago thanks to an increase in global crude oil prices.

The company’s realization on crude oil increased about 70% to $69-71 per barrel from around $41 per barrel a year earlier. This offset a 3.8% fall in total crude oil output to 5.471 million metric tonnes from 5.686 MMT a year earlier.

ONGC Q2: Other highlights

1) ONGC board approved interim dividend of 110%, which means Rs 5.50 on each equity share of Rs 5.

2) The total dividend payout on this account will be Rs 6,919 crore.

3) Consolidated gross revenue for Q2 rises 465 to Rs 1,22,029 crore from Rs 83,619 crore a year earlier.

4) Consolidated net profit Rs 18,749 crore, up 230% from Rs 5,675 crore a year earlier.

5) Total gas production fell 7% on year to 5.467 billion cubic metres from 5.88 billion cubic metres.

Lower output, lower tax

ONGC said production of crude oil and gas declined mainly due to restrictive conditions created by cyclone Tauktae and due to the impact of Covid-19. A delay in mobilization of Mobile Offshore Production Unit Sagar Samrat to WO-16 Cluster project also impacted production from this field, ONGC said.

ONGC also said that, during the quarter, it has decided to opt for lower tax regime with effect from 2020-21. Accordingly, it recognized provision for tax expenses and re-measured its net deferred tax liabilities.

The net impact due to availing the option has resulted in a decrease in deferred tax by Rs 8,541 crore and decrease in current tax by Rs 1,304 crore, the company said.

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Grasim Q2 profit nearly triples as revenue jumps, margins expand

by 5paisa Research Team 13/11/2021

Grasim Industries Ltd reported a 180% year-on-year rise in its second quarter standalone net profit, as demand for its products bounced back and earnings margins expanded on price hikes.

Standalone net profit after exceptional items jumped to Rs 979 crore for the three months through September from Rs 350 crore a year earlier.

Grasim, the holding company for the Aditya Birla Group’s textiles, chemicals, cement and financial services business, said standalone revenue from operations rose 67% to Rs 4,933 crore for the quarter ended September 30.

Operating profit shot up 87% to Rs 1,504 crore. This, the company said, was owing to better product realisation. 

The company's standalone EBITDA margin expanded to 27% for the second quarter from 19% a year earlier.

Grasim Q2: Other highlights

1) Consolidated EBITDA increased 19% from a year earlier to Rs 4,282 crore.

2) Consolidated profit after tax for the second quarter rose 41% YoY to Rs 1,359 crore.

3) UltraTech Cement’s revenue was Rs 12,017 crore, up 16% YoY.

4) Ultratech EBITDA rose 1% to Rs 2,855 crore, net profit increased to Rs 1,314 crore.

5) Revenue of Aditya Birla Capital Ltd grew 22% to Rs 5,593 crore, consolidated profit grew 43% to Rs 377 crore.

6) Operating profit for viscose staple fibre (VSF) business rose 201% on a year-on-year basis to Rs 514 crore.

Grasim commentary 

The company said prices of both caustic soda and VSF recovered during the second quarter. It also hedged a 51.7% increase in total expenses by passing most of it on to the customer. 

Caustic soda prices in India recovered from multi-quarter lows supported by recovery in demand, tightness in supply led by production losses and higher export sales driven by better export realisation, it said.

Grasim said the gap between prices of cotton and VSF increased to record levels, in the wake of a surge in cotton prices. This, the company said, was a positive signal for VSF prices going forward. 

Demand for textile products in India bounced back with the onset of the festive season, phased reopening of schools and offices, and increased sourcing of textile from India by global brands as a part of the China-plus-one strategy.

The demand momentum picked up in the second quarter and continued thereafter across all businesses. Backed by strong demand, realisation and volumes have improved in key businesses, offsetting the cost increase, it said. 

The company said its operations and revenue were marginally impacted on account of disruption in economic activity due to Covid-19. “The management believes that [the] impact is short term and temporary in nature and there is no significant impact on recoverability of carrying value of its assets and future operations,” it added.

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KNR Constructions slips by more than 2% after posting Q2FY22 results

KNR Constructions slips by more than 2% after posting Q2FY22 results
by 5paisa Research Team 13/11/2021

The performance during the quarter was affected by a rise in the cost of materials consumed, constructions cost and tax expenses.

The company’s share price declined from Rs 292.1 on Thursday to Rs 285.3 on Friday, when the Q2FY22 results were announced, marking a decline of 2.33%.

KNR Constructions Limited, an infrastructure project development company, is engaged in engineering, procurement and construction (EPC) contracts, as well as build-operate-transfer (BOT) projects across various sectors, such as construction and maintenance of roads, highways, flyovers and bridges.

The results of Q2FY22, which were reported yesterday, were not so impressive.

During the quarter, on a consolidated basis, the company’s net revenue grew by 28.38% YoY to Rs 842 crore. The PBIDT (ex OI) increased by 3.75% to Rs 177.52 crore, while the corresponding margin contracted by 489 bps YoY to 22.42%. This contraction was driven by a rise in expenses, particularly in the cost of materials consumed and the cost of construction. Furthermore, owing to a 123% increase in tax expenses, the PAT declined by 54.71% YoY to Rs 70.27 crore. Similarly, the PAT margin contracted by 1531 bps YoY to 8.35%.

Key developments during the quarter

The company bagged a project on HAM basis from NHAI worth Rs 1041.5 crore. With this, the total order book of the company (as of 30 September 2021) stood at Rs 6,511.3 crore. In addition to this, the company’s shareholders gave a nod for the sale of a 100% stake in 3 material subsidiaries namely KNR Shankarampet Projects Private Limited, KNR Srirangam Infra Private Limited and KNR Tirumala Limited Infra Private Limited to Cube Highways and Infrastructure III Pte Limited.

Post the results announcements, India Ratings, a credit rating agency, upgraded the company’s credit rating for the long-term facilities from IND AA- to IND AA, with the outlook being stable while the short-term rating of IND A1+ remained unchanged.

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Doctor of Homeopathy became the doctor of stock market

Doctor of Homeopathy became the doctor of stock market
by 5paisa Research Team 13/11/2021

Meet the trending ace investor of Kolkata - Dr Suresh Kumar Agarwal

Dr Suresh Kumar Agarwal is an ace investor who has shown everyone that no matter from which field you belong, you can always make it big in financial markets. His academic background is diverse and strong. He has completed a master’s degree in homoeopathy and holds an MD (Homeo) degree under the Central Council of Homeopathic Physician, Government of India. He also holds a Ph D in Management and Sociology. Apart from this, Agarwal also has master’s degrees in yoga, naturopathy, ecology, law, management among others. This trending personality of Kolkata has spent more than thirty years in investing as he had started investing in the early 1990s and has accumulated a rich experience and fame over time.

Dr Agarwal runs the Agarwal Family Office and invests in various instruments such as fixed income & debt, real estate, international equity apart from traditional domestic equity. As of September end 2021, Dr Suresh Kumar Agarwal held 8 publicly traded stocks with a net worth of over Rs 328.9 crore, according to Trendlyne.

Top three holdings:

The top three stocks held by Dr Agarwal include: NIIT Ltd, Caplin Point Laboratories Ltd and Shailey Engineering Plastics Ltd. NIIT Ltd has been a multibagger, rising 2.3 times in just a year. The stock has given a year-to-date (YTD) return of about 134%, leading to the net worth total of Dr Agarwal. His current holding in NIIT is Rs 112.7 crore. Caplin Lab too has appreciated greatly by over 77% YTD, and his holding in the stock is Rs 86.3 crore. He holds about Rs 74 crore in Shailey Engineering which has almost tripled in a year’s time. Dr Agarwal likes to invest in stocks with high growth and low valuations. We can fairly conclude that value stocks and small caps are his styles of investing. He believes a good diversification strategy can go a long way.

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Let us understand why the shares of VRL Logistics have surged close to 30% in November 2021

Trending Company VRL Logistics
by 5paisa Research Team 13/11/2021

The company is poised to register healthy revenue growth with faster addition of branches in untapped regions.

Shares of VRL Logistics Ltd have delivered more than 29.62% return to its shareholders so far in November 2021. The stock has gone on to hit its all-time high of Rs 534 on Thursday, November 11, 2021, on the BSE. Moreover, over the past year, the scrip has given a staggering return of 204.93% to its shareholders, with its share price standing at Rs 485.15 as of November 12, 2021, from Rs 159.1 at the same time last year.

VRL Logistics is the largest and leading transportation and logistics company in India. It operates through segments of Goods Transport, Bus Operations, Sale of Power, and Transport of Passengers by Air.

The company reported very strong Q2FY22 results with topline growth of 44.87% YoY to Rs 640 crore on the back of a 40% growth in the goods transport (GT) segment. Volumes in the GT segment have risen over 60% YoY in the first half of FY22. Even the bus operations business of the company which was the most impacted during the Covid-19 induced lockdown last year, saw a healthy recovery with revenue from this segment growing 3x to Rs 50.3 crore. Strong topline performance resulted in the PBIDT and PAT rising by 30.74% and 60.22% YoY respectively.

The company added 22 new branches in Q2FY22 and 31 new branches in H1FY22. It is also planning to expand its network by opening new branches in the untapped market. With the faster addition of branches in untapped regions, the company is poised to register healthy revenue growth going ahead.

Furthermore, ace investor Ashish Kacholia also added VRL Logistics to his portfolio during the June-September quarter. He purchased 12,07,632 equity shares, or 1.37% stake, of the company. The stock market investor is known for picking lesser-known stocks from the midcap and smallcap segments.

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Chart Busters: Top trading set-ups to watch out on Monday

Chart Busters: Top trading set-ups to watch out on Monday
by 5paisa Research Team 15/11/2021

In the last five trading sessions, the benchmark index Nifty has gained nearly 186 points or 1.03%. On the weekly chart, the Nifty has formed a bullish candle with a long lower shadow, which indicates buying pressure at lower levels. On Friday, the Nifty index has gained 1.28% but the advance-decline ratio was in the favour of decliners. Interestingly, the Indian Volatility Index (VIX), a gauge for the market’s short-term expectation of volatility, slipped by nearly 7% to end at 15.22.

Here are the top trading set-ups to watch out for on Monday.

JK Cement: Considering the daily chart, the stock has given a downward sloping trendline resistance breakout on November 08, 2021. After registering the high of Rs 3838, the stock has witnessed minor throwback along with low volume. During the period of a throwback, the stock has retested the breakout level and started rising higher. Further, since the last two trading sessions, the stock has formed a candle with a long lower shadow. The long lower shadow of the candle is indicating buying pressure near the support level.

Currently, the stock is trading above its short and long-term moving averages. These averages are in a rising trajectory. One interesting observation on the leading indicator RSI is that in the recent throwback the RSI has never slipped below 60 levels and it has taken support near 60 and started rising higher. This indicates that the stock is in a super bullish range as per RSI range shift rules.

Talking purely about the trading levels, the zone of Rs 3570-Rs 3545 level is a crucial support area and the prior swing high of Rs 3838 will act as minor resistance for the stock.

Hisar Metal Industries: The stock has formed a bearish belt hold candlestick pattern as of July 23, 2021, and thereafter witnessed correction. The correction is halted near the 38.2% Fibonacci retracement level of its prior upward move (Rs 35.20-Rs 165) and it coincides with the 50-week EMA level. Currently, the stock has formed a strong base near the support zone and it is on the verge of giving a downward sloping trendline breakout. Further, on Friday the volumes recorded were above the 50-days average, which is a sign of accumulation before the actual breakout happen.
 

In addition, on Friday, the stock has surged above its 20-day, 50-day and 100-day EMA levels. The 20-day EMA and 50-day EMA has started edging higher, which is a bullish sign. The leading indicator, 14-period daily RSI is currently quoting at 58.19 level and it is trading above its 9-day average. The momentum indicator MACD line has crossed above the signal line, which resulted in the histogram turning positive.

Going ahead, in case the stock is sustained above the trendline resistance then we may see a sharp upside in the stock. The trendline resistance is placed in the zone of Rs 132.50-133.50 level. On the downside, the recent swing low of Rs 121.30 will act as support for the stock.
 

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