InvestorQ : I have shares of India Cements and Equitas in my portfolio and want to know your view on their quarterly numbers announced for Q2?
Sam Eswaran made post

I have shares of India Cements and Equitas in my portfolio and want to know your view on their quarterly numbers announced for Q2?

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Moii Chavate answered.
3 weeks ago
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Let me talk about India cements first. It reported 13.29% higher sales for Sep-21 quarter at Rs.1,235 crore. The company gained from higher volumes and also higher prices as the construction and infrastructure activity picked up in the quarter. It may be recollected that Radhakishan Damani has a substantial stake in India Cements.

However, the net profits for Sep-21 quarter were lower by -57% at Rs.30 crore. The hit came from power and fuel costs which spiked 57% to Rs.359 crore. This has been the case with most cement companies. It also saw spike in transport and logistics cost. Net profit margin for the Sep-21 quarter at 2.41% was impacted by the spike in raw material costs.

Now we turn to your second stock; Equitas Holdings. The company reported 13% higher revenues for Sep-21 quarter at Rs.985 crore. However, net profits were down -64.33% at Rs.36.1 crore. That was due to an 83% spike in the provision for impairment of financial assets at Rs.125 crore. Net margins at 3.66% was lower than 11.61% in year ago quarter.

To sum up, India Cements looks like a more cyclical problem and should get back on stream once the input cost streamlines. That should happen with the sharp cut in petrol and diesel prices and power situation back to normal. However, Equitas has larger asset quality problems and also uncertainty over merger with the bank. Be cautious on Equitas Holdings.

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