Investing

Selling pressure is present for Indian IT companies in today’s trading session before TCS begins the quarter’s earnings season on Wednesday.

Quarter 4 Preview

The tech sector is getting ready to report its fourth-quarter financial results for FY23. TCS will open the season first, followed by rivals Infosys and HCL Tech. Later in the month, other people will do the same. A seasonally bad quarter is anticipated for the industry, with modest sales and margin expansion.

In light of the upheaval in the banking systems, advice and BFSI verticals are among the important things to watch.On April 12, TCS will be the first to release its Q4 results, and on April 13, Infosys will do the same. Results from Cyient, HCLTech, L&T Technology Services, Tech Mahindra, and Wipro will be presented on April 20, April 26, and April 27, respectively.

The fourth quarter of the year is often difficult for IT companies due to fewer working days and some additional furloughs in January, according to ICICI Direct analysts’ preview research study. On the one hand, global IT giant Accenture continued to report strong bookings in the outsourcing business (a proxy for Indian IT companies), while on the other, we witnessed fast-paced events unfolding in the global BFSI space (30-38% revenue mix for top three IT players). Q4 of this year has been eventful for the IT sector.

Technical Analysis

Investors have gradually accepted lower prices in order to exit Infosys Limited, and the stock is currently in a medium-long-term falling trend channel. This shows that investors are becoming more pessimistic and that Infosys Limited will continue to deteriorate. The moving average indicator has given the stock a warning that it will continue to decline.

The price is approaching the 1450 rupee barrier level, which could cause a negative reaction. However, a breakthrough of 1450 rupees in the upside direction would be encouraging. In the past, the volume has been low at price peaks and strong at price troughs. This validates the pattern.

Let us look at the Fundamentals

Profit & Loss

Consolidated Figures in Rs. Crores / View StandalonePRODUCT SEGMENTS

	Mar 2011	Mar 2012	Mar 2013	Mar 2014	Mar 2015	Mar 2016	Mar 2017	Mar 2018	Mar 2019	Mar 2020	Mar 2021	Mar 2022	TTM
Sales +	27,501	33,734	40,352	50,133	53,319	62,441	68,484	70,522	82,675	90,791	100,472	121,641	141,602
Expenses +	18,531	23,007	28,814	36,743	38,436	45,362	49,880	51,700	62,505	68,524	72,583	90,150	107,623
Operating Profit	8,970	10,727	11,538	13,390	14,883	17,079	18,604	18,822	20,170	22,267	27,889	31,491	33,979
OPM %	33%	32%	29%	27%	28%	27%	27%	27%	24%	25%	28%	26%	24%
Other Income +	1,211	1,904	2,365	2,664	3,430	3,120	3,050	3,311	2,882	2,803	2,201	2,295	2,666
Interest	2	4	5	9	12	0	0	0	0	170	195	200	252
Depreciation	854	928	1,099	1,317	1,017	1,459	1,703	1,863	2,011	2,893	3,267	3,476	3,994
Profit before tax	9,325	11,699	12,799	14,728	17,284	18,740	19,951	20,270	21,041	22,007	26,628	30,110	32,399
Tax %	27%	29%	26%	28%	28%	28%	28%	21%	27%	24%	27%	26%
Net Profit	6,835	8,332	9,429	10,656	12,372	13,489	14,353	16,029	15,410	16,639	19,423	22,146	23,669
EPS in Rs	14.88	18.14	20.52	23.31	26.93	29.36	31.24	36.69	35.26	38.96	45.42	52.56	56.27
Dividend Payout %	50%	32%	25%	34%	55%	41%	41%	59%	60%	45%	59%	59%

Compounded Sales Growth
10 Years:	14%
5 Years:	12%
3 Years:	14%
TTM:	22%

Compounded Profit Growth
10 Years:	10%
5 Years:	9%
3 Years:	13%
TTM:	10%

Stock Price CAGR
10 Years:	17%
5 Years:	20%
3 Years:	31%
1 Year:	-19%

Return on Equity
10 Years:	25%
5 Years:	26%
3 Years:	27%
Last Year:	29%

Balance Sheet

Consolidated Figures in Rs. Crores / View StandaloneCORPORATE ACTIONS

	Mar 2011	Mar 2012	Mar 2013	Mar 2014	Mar 2015	Mar 2016	Mar 2017	Mar 2018	Mar 2019	Mar 2020	Mar 2021	Mar 2022	Dec 2022
Share Capital +	286	286	286	286	572	1,144	1,144	1,088	2,170	2,122	2,124	2,098	2,086
Reserves	25,690	31,046	37,708	44,244	50,164	60,600	67,838	63,835	62,778	63,328	74,227	73,252	72,206
Borrowings +	0	0	0	0	0	0	0	0	0	4,633	5,325	5,474	7,720
Other Liabilities +	5,317	7,025	8,281	12,436	15,553	13,354	14,166	14,426	19,118	21,717	25,835	35,905	43,954
Total Liabilities	31,293	38,357	46,275	56,966	66,289	75,098	83,148	79,349	84,066	91,800	107,511	116,729	125,966
Fixed Assets +	5,235	5,555	7,139	8,378	11,346	13,386	14,179	12,574	15,710	23,789	25,505	25,800	28,980
CWIP	264	590	1,140	961	776	960	1,365	1,606	1,388	954	922	416	0
Investments	144	372	2,116	4,331	2,270	1,892	16,423	12,163	11,261	8,792	14,205	20,324	21,116
Other Assets +	25,650	31,840	35,880	43,296	51,897	58,860	51,181	53,006	55,707	58,265	66,879	70,189	75,870
Total Assets	31,293	38,357	46,275	56,966	66,289	75,098	83,148	79,349	84,066	91,800	107,511	116,729	125,966

Disclaimer: The information mentioned above is merely an opinion and should only be treated for educational purposes. If you have any questions or feedback about this article, you can write us back. To reach out, you can use our contact us page.Support@learningsharks.in

As a result of both companies reporting their highest-ever sales in the fourth quarter of FY23, the shares of real estate companies Godrej Properties and Sobha increased 8% and 5%, respectively, in Monday’s trading.

Godrej Properties’ financial year 2022–2023 bookings increased by 56% to Rs 12,232 crore during the three months ending March 2023, totaling Rs 4,051 crore in bookings.

Sales Performance

In terms of area, its sales volumes for the quarter increased by 19% from 4.42 million square feet to 5.25 million square feet. Sales volumes increased 40% over the course of the year, from 10.84 million square feet to 15.21 million.

This is the best quarterly and yearly sales performance ever for Godrej Properties. Along with the company’s sales, its cash receipts and project deliveries also reached a record level.

At 9.55 am, the price of Godrej Properties’ shares had increased by 8% to Rs 1,216 from the previous day’s closing price of Rs 1,125 a share. The stock, however, has decreased by more than 28% during the past year.

Technical Analysis

Jesus Properties opened at 1170.00 and closed at 1228.35, which is an 8.39% increase over the conclusion of the prior session. It fluctuated between 1160.00 and 1236.80.
With an average volume of 4325815, or 68.19% of the volumes from the previous session, the session was bullish.

The short-term trend has changed somewhat favorably, but it's too soon to draw any firm conclusions.
Even though the stock price has increased, the stock's mid-term trend is still negative and downward.
Long-term trends have changed somewhat for the better, but it's too soon to draw any firm conclusions. 

Tomorrow’s support is at 1194.18, while its resistance is at 1270.98.
For the first 5 to 15 periods, these support and resistance points are valid.

Let us look at the Fundamnetals

Profit & Loss

Consolidated Figures in Rs. Crores / View Standalone

	Mar 2011	Mar 2012	Mar 2013	Mar 2014	Mar 2015	Mar 2016	Mar 2017	Mar 2018	Mar 2019	Mar 2020	Mar 2021	Mar 2022	TTM
Sales +	452	770	1,037	1,179	1,843	2,123	1,583	1,604	2,817	2,441	765	1,825	1,937
Expenses +	346	650	751	897	1,586	1,986	1,330	1,819	2,639	2,181	1,214	1,880	1,956
Operating Profit	105	120	286	283	257	137	253	-216	178	260	-449	-56	-19
OPM %	23%	16%	28%	24%	14%	6%	16%	-13%	6%	11%	-59%	-3%	-1%
Other Income +	107	88	10	75	83	146	150	499	419	473	568	761	786
Interest	4	5	3	4	5	41	104	150	234	220	185	167	164
Depreciation	4	4	4	6	10	14	14	16	14	21	20	21	23
Profit before tax	204	199	289	347	326	228	284	117	348	493	-86	516	580
Tax %	30%	35%	32%	32%	28%	30%	27%	26%	27%	44%	-121%	32%
Net Profit	143	129	197	236	236	160	207	87	253	274	-189	351	425
EPS in Rs	7.34	4.92	6.95	8.00	9.58	7.33	9.56	4.01	11.04	10.73	-6.81	12.68	15.10
Dividend Payout %	24%	24%	23%	25%	21%	0%	0%	0%	0%	0%	0%	0%

Compounded Sales Growth
10 Years:	9%
5 Years:	3%
3 Years:	-13%
TTM:	109%

Compounded Profit Growth
10 Years:	15%
5 Years:	11%
3 Years:	15%
TTM:	514%

Stock Price CAGR
10 Years:	17%
5 Years:	11%
3 Years:	22%
1 Year:	-26%

Return on Equity
10 Years:	4%
5 Years:	2%
3 Years:	2%
Last Year:	4

Balance Sheet

Consolidated Figures in Rs. Crores / View StandaloneCORPORATE ACTIONS

	Mar 2011	Mar 2012	Mar 2013	Mar 2014	Mar 2015	Mar 2016	Mar 2017	Mar 2018	Mar 2019	Mar 2020	Mar 2021	Mar 2022	Sep 2022
Share Capital +	70	78	78	99	100	108	108	108	115	126	139	139	139
Reserves	842	1,365	1,351	1,694	1,747	1,657	1,896	1,102	2,354	4,682	8,181	8,536	8,639
Borrowings +	945	2,087	1,678	2,574	3,486	3,123	3,980	3,703	3,516	3,715	4,593	5,196	5,382
Other Liabilities +	361	1,179	1,572	1,779	2,030	1,691	1,197	3,358	2,107	1,567	3,333	3,932	4,885
Total Liabilities	2,218	4,709	4,679	6,147	7,363	6,578	7,181	8,271	8,092	10,090	16,245	17,804	19,045
Fixed Assets +	46	46	51	64	117	107	102	113	97	113	174	183	188
CWIP	1	19	36	62	73	1	0	71	100	163	229	340	428
Investments	0	0	0	0	0	664	760	1,454	2,637	3,571	5,243	4,883	4,489
Other Assets +	2,170	4,644	4,593	6,021	7,173	5,807	6,319	6,633	5,259	6,243	10,599	12,397	13,940
Total Assets	2,218	4,709	4,679	6,147	7,363	6,578	7,181	8,271	8,092	10,090	16,245	17,804	19,045

Disclaimer : The information mentioned above is merely an opinion and should only be treated for educational purposes. If you have any questions or feedback about this article, you can write us back. To reach out, you can use our contact us page Support@learningsharks.in

Shares of Bajaj Finance decreased 1.95%, or Rs 119.25, to close at Rs 5,980.60 on the BSE today. Shares of Bajaj Finance decreased 2.6% during the day to Rs 5,941 level. After six months, the Bajaj Finance stock has now fallen below the Rs. 6,000 threshold following today’s downturn. (July 18, 2022).

Bajaj Finance’s stock is now trading 25% below its January 19, 2022 52-week high of Rs. 8043.50. On the other side, on June 17, 2022, the price of Bajaj Finance stock fell to a 52-week low of Rs. 5,235.60.

Investors in Bajaj Finance are in a pickle as the NBFC company has lost about Rs 33,500 crore in market cap over the past two days due to a correction. Bajaj Finance announced weaker-than-expected AUM (Assets Under Management) growth for the December quarter, which caused shares to conclude the day 7.2% lower at Rs 6,099.85.

After the NBFC announced lower-than-expected AUMs (Assets Under Management) growth in the December quarter, shares of Bajaj Finance dropped 7.2% to Rs 6,099.85 on Thursday.Bajaj Finance shares lost another 2.6% intraday to Rs 5,941 mark on Friday, continuing their downward trend. The Bajaj Finance stock has dropped below Rs 6,000 for the first time in six months with today’s fall. (July 18, 2022).

With a sell rating and a target of Rs 5,800, Kotak Institutional Equities is even more pessimistic on the company. Jefferies has a hold rating and a target price of Rs 8,160, on the other hand. Over 9% of the stock’s value has been lost in only two sessions, and it has lost 22.81% of its value over the past year.

Jigar S Patel, Senior Manager- Technical Research Analyst – “Since last four months, the said counter has been making lower highs and lower lows structure, which resulted in a 22% cut in price,” according to Anand Rathi Shares and Stock Brokers. Massive volume and a beating of almost 10% were seen in the last two trading sessions, indicating that the fall is still ongoing. The next reliable support can be found between Rs. 5600 and Rs. 5700, where one can start a new long.

The daily MACD has produced a bearish cross below the zero line, suggesting that there will be more weakening in the sessions to come.

Sneha Seth, “Considering the recent price action, undoubtedly the trend is strong bearish, but looking at the bigger picture, it’s not advisable to exit after 20% price decline from recent high,” stated Angel One Ltd.’s derivatives research analyst.

It would be fascinating to watch how this stock reacts around its cluster of support, which is Rs 6,000-5,800, for traders.

A R Ramachandran The stock is beginning to enter oversold territory, and short sellers are urged to book profits at current levels, according to a statement from Tips2trades.

Akshay Ashok – “Although AUM growth in the business update was slightly below expectations, customer acquisition momentum remains intact, and the company is on track to achieve target of acquiring 10-11 million customers in 2023,” said research analyst Prabhudas Lilladher. Increased stickiness of new to franchise customers (NTF) will contribute to incremental portfolio growth in the upcoming quarters.

Rahul Malani, According to the Banking & NBFC, Fundamental Research, Sharekhan analyst of BNP Paribas, “Bajaj Finance announced its Q3FY23 business updates wherein AUM growth was stated as 27% YoY/6% QoQ vs. 31% YoY/7% QoQ in Q2FY23.

If we go back to pre-covid era, BAF recorded an AUM growth rate of about 37% CAGR over the previous ten years. It was the lender with the fastest growth rate, and growth differences from banks and other NBFCs were also significant.

BAF has been reporting 25–30% increase in AUM during the post-pandemic period, and growth differentials have also decreased as a result of banks and other NBFCs’ and banks’ acceleration of loan growth.

As new companies (Jio Fin) and established fintech players (such as BAF) enter the consumer market that BAF serves, concerns have also been raised about intense rivalry developing in the future. It is currently trading for 6.4 times the book value for the next year.

Regarding the long-term investment thesis, we still believe that BAF is well-positioned to deliver strong, industry-leading ROA/ROE of 4.7%/ 4.8% 22%/33% in FY24E/FY25E thanks to its franchise built around strong competitive moats that are hard to replicate as well as strong execution capabilities, underwriting, and data analytics. We continue to be optimistic about the franchise’s future success and high earnings growth.

A firm listed on a stock exchange will issue shares to investors as part of a follow-on public offer (FPO). An issuance of extra shares by a firm following an IPO is known as a follow-on offering. (IPO).

Secondary offerings are another name for follow-on offerings.

KEY TAKEWAYS

• After a company’s initial public offering (IPO), more shares are issued in a follow-on public offer (FPO), often referred to as a secondary offering. (IPO).
• FPOs are typically announced by businesses to raise stock or lower debt.
• The two primary FPO types are non-dilutive, in which existing private shares are sold to the public, and dilutive, in which additional shares are added.
• A corporation can raise cash through an at-the-market (ATM) offering, a sort of FPO, by offering secondary public shares on any given day, typically based on the current market price.
• A firm listed on a stock exchange will issue shares to investors as part of a follow-on public offer (FPO).   A follow-on offering is when a corporation issues more shares following an initial public offering.

How a Follow-on Public Offer (FPO) Works

FPOs and IPOs, or the initial public offering of equity to the public, should not be confused. After a corporation is registered on an exchange, additional issues called FPOs are made.

Similar to an IPO, follow-on public offers require corporations to complete U.S. Securities and Exchange Commission (SEC) paperwork.

Types of Follow-on Public Offers (FPOs)

There are two main types of follow-on public offers:

This form of follow-on public offering aims to obtain capital to lower debt or grow the business, increasing the number of shares outstanding in the process.

Non-dilutive follow-on public offers are the other variety.

Diluted Follow-on Offering

The earnings per share (EPS) declines as the number of shares rises. The most common uses for the money raised through an FPO are debt reduction and capital structure changes. The addition of cash is beneficial to the company’s long-term prospects and, as a result, to its shares.

Non-Diluted Follow-on Offering

Holders of current, privately held shares can sell previously issued shares on the open market through non-diluted follow-on offerings. When stock is sold non-diluted, the cash proceeds are given to the shareholders who sold the stock on the open market.

At-the-Market (ATM) Offering

An at-the-market (ATM) offering gives the issuing company the ability to raise capital as needed. If the company is not satisfied with the available price of shares on a given day, it can refrain from offering shares. ATM offerings are sometimes referred to as controlled equity distributions because of their ability to sell shares into the secondary trading market at the current prevailing price.

Following the government’s decision to lower the windfall tax on diesel export, shares of upstream companies including Oil and Natural Gas Corporation (ONGC), Oil India Limited (OIL), Mangalore Refinery & Petrochemicals (MRPL), Chennai Petroleum Corporation, and Reliance Industries increased by up to 4% on the BSE intraday.

Is it a Multibagger ?

With a share price increase of 43.80 to 89.25 and a multibagger return of 103.77 percent year-to-date, MRPL is a multibagger stock in 2022. (YTD). In the past six months, the stock has skyrocketed from 44.15 to the current market price, representing a multibagger gain of 102.15%. From its 52-week low of 37, the stock has increased by more than 140%, and it is currently trading above its 5 days, 10 days, 12 days, 20 days, 26 days, 50 days, 100 days, and 200 days moving averages.

Technical View

Although MRPL is currently trading above its 50- and 100-DMAs, it is still trading below its 200-DMA, which is Rs 54.85.

The stock has surpassed the key resistance area between 55 and 56.25 levels and is currently trading above two of the three significant DMAs. The stock could challenge the 59.50 and 64 levels.”

Relative strength index (RSI) is presently in the overbought zone, according to AR Ramachandran, and higher levels should be used to liquidate previous purchase positions.

In June 2022, the stock’s 52-week high was Rs 127.60.

Let us look at the Fundamentals

Profit & Loss

Standalone Figures in Rs. Crores / View Consolidated

	Mar 2011	Mar 2012	Mar 2013	Mar 2014	Mar 2015	Mar 2016	Mar 2017	Mar 2018	Mar 2019	Mar 2020	Mar 2021	Mar 2022	TTM
Sales +	38,887	53,770	65,696	71,815	57,463	39,647	43,208	48,451	62,062	51,002	31,959	69,727	108,271
Expenses +	36,864	52,156	65,393	70,808	59,551	37,859	38,493	44,139	60,382	53,524	31,251	64,783	102,323
Operating Profit	2,023	1,615	303	1,007	-2,088	1,789	4,714	4,311	1,681	-2,522	708	4,944	5,947
OPM %	5%	3%	0%	1%	-4%	5%	11%	9%	3%	-5%	2%	7%	5%
Other Income +	210	346	153	430	838	674	2,015	154	131	97	93	64	125
Interest	105	207	329	321	407	594	520	443	475	749	558	1,212	1,349
Depreciation	391	434	604	706	499	710	678	671	757	783	1,158	1,088	1,111
Profit before tax	1,737	1,320	-477	410	-2,156	1,158	5,531	3,351	581	-3,958	-915	2,708	3,612
Tax %	32%	31%	-59%	-47%	21%	1%	34%	34%	43%	31%	17%	-9%
Net Profit	1,177	909	-757	601	-1,712	1,147	3,644	2,224	332	-2,740	-761	2,955	3,739
EPS in Rs	6.71	5.18	-4.32	3.43	-9.77	6.54	20.79	12.69	1.89	-15.64	-4.34	16.86	21.33
Dividend Payout %	18%	19%	0%	0%	0%	0%	29%	24%	53%	0%	0%	0%

Compounded Sales Growth
10 Years:	3%
5 Years:	10%
3 Years:	4%
TTM:	85%

Compounded Profit Growth
10 Years:	13%
5 Years:	3%
3 Years:	105%
TTM:	886%

Stock Price CAGR
10 Years:	1%
5 Years:	-13%
3 Years:	28%
1 Year:	8%

Return on Equity
10 Years:	5%
5 Years:	5%
3 Years:	-2%
Last Year:	52%

Balance Sheet

Standalone Figures in Rs. Crores / View ConsolidatedCORPORATE ACTIONS

	Mar 2011	Mar 2012	Mar 2013	Mar 2014	Mar 2015	Mar 2016	Mar 2017	Mar 2018	Mar 2019	Mar 2020	Mar 2021	Mar 2022	Sep 2022
Share Capital +	1,762	1,757	1,753	1,753	1,753	1,753	1,753	1,753	1,753	1,753	1,753	1,753	1,753
Reserves	4,767	5,472	4,715	5,316	3,552	4,679	8,318	9,280	8,974	6,014	2,485	5,444	6,364
Borrowings +	1,126	6,183	7,558	9,793	9,032	8,075	8,541	7,950	9,131	11,896	24,062	21,310	18,437
Other Liabilities +	10,856	12,747	12,676	22,665	20,007	22,787	7,802	7,238	7,333	6,145	6,425	11,561	11,899
Total Liabilities	18,501	26,155	26,701	39,527	34,345	37,293	26,414	26,221	27,191	25,808	34,725	40,068	38,452
Fixed Assets +	3,090	4,052	5,781	5,991	14,109	14,881	14,161	14,038	13,996	14,239	19,596	21,384	20,846
CWIP	3,995	7,089	7,554	8,552	1,378	188	220	668	982	1,730	2,343	170	371
Investments	42	42	15	15	1,350	1,350	1,350	1,350	1,503	2,178	16	16	16
Other Assets +	11,374	14,971	13,351	24,969	17,508	20,874	10,684	10,166	10,710	7,661	12,770	18,499	17,218
Total Assets	18,501	26,155	26,701	39,527	34,345	37,293	26,414	26,221	27,191	25,808	34,725	40,068	38,452

Disclaimer : The information mentioned above is merely an opinion and should only be treated for educational purposes. If you have any questions or feedback about this article, you can write us back. To reach out, you can use our contact us page Support@learningsharks.in

Britannia Industries is renowned for its hefty dividend payouts. Once more, the FMCG juggernaut is prepared to distribute a sizable interim dividend for the fiscal year FY23 of 72 per equity share. The shares of Britannia will therefore stop paying dividends this week.

In percentage terms, Britannia will be paying a whopping interim dividend of 7200%.

Declared Interim Dividend

For the Financial Year 2022–23, Britannia “declared an Interim Dividend @ 7200% i.e., Rs. 72/per Equity Share of the face value of Re 1 each,” according to a statement last week.

Additionally, the business established April 13th as the record date for identifying stockholders who are entitled to the $72 per share dividend benefit.

Britannia shares will go ex-dividend on April 13th, which is also the record date because the listed equities now follow the “T+1” settlement option. Simply expressed, the shareholders who are entitled to receive the interim dividend of Rs 72 per share on April 13th are those whose names are recorded in the company’s registrar on exchanges and relevant depository on that date.In FY22, the company paid a 5650% dividend aggregating to ₹56.5 per equity share. The company paid a dividend of ₹12.50 per share (1250%) in FY21.

Let us look at the Fundamnetals

Profit & Loss

Consolidated Figures in Rs. Crores / View Standalone

	Mar 2011	Mar 2012	Mar 2013	Mar 2014	Mar 2015	Mar 2016	Mar 2017	Mar 2018	Mar 2019	Mar 2020	Mar 2021	Mar 2022	TTM
Sales +	4,609	5,485	6,185	6,913	7,858	8,397	9,054	9,914	11,055	11,600	13,136	14,136	15,828
Expenses +	4,393	5,174	5,765	6,286	6,988	7,174	7,776	8,413	9,322	9,756	10,627	11,935	13,248
Operating Profit	216	311	421	627	870	1,224	1,278	1,501	1,732	1,843	2,509	2,201	2,580
OPM %	5%	6%	7%	9%	11%	15%	14%	15%	16%	16%	19%	16%	16%
Other Income +	79	59	52	34	228	115	151	166	206	263	313	222	591
Interest	44	42	41	8	4	5	5	8	9	77	111	144	168
Depreciation	65	62	73	83	144	113	119	142	162	185	198	201	212
Profit before tax	187	267	358	569	950	1,220	1,304	1,518	1,768	1,844	2,514	2,078	2,791
Tax %	28%	25%	27%	30%	28%	32%	32%	34%	35%	24%	26%	27%
Net Profit	134	200	260	395	689	825	885	1,004	1,155	1,394	1,851	1,516	2,137
EPS in Rs	5.62	8.35	10.85	16.48	28.71	34.36	36.85	41.83	48.23	58.33	77.38	63.31	88.97
Dividend Payout %	58%	51%	39%	36%	28%	29%	30%	30%	31%	60%	204%	89%

Compounded Sales Growth
10 Years:	10%
5 Years:	9%
3 Years:	9%
TTM:	15%

Compounded Profit Growth
10 Years:	24%
5 Years:	11%
3 Years:	9%
TTM:	22%

Stock Price CAGR
10 Years:	32%
5 Years:	11%
3 Years:	15%
1 Year:	28%

Return on Equity
10 Years:	40%
5 Years:	38%
3 Years:	42%
Last Year:	50%

.

Balance Sheet

Consolidated Figures in Rs. Crores / View StandaloneCORPORATE ACTIONS

	Mar 2011	Mar 2012	Mar 2013	Mar 2014	Mar 2015	Mar 2016	Mar 2017	Mar 2018	Mar 2019	Mar 2020	Mar 2021	Mar 2022	Sep 2022
Share Capital +	24	24	24	24	24	24	24	24	24	24	24	24	24
Reserves	302	385	534	774	1,221	2,068	2,672	3,382	4,229	4,379	3,524	2,534	2,017
Borrowings +	618	604	380	150	145	131	125	201	156	1,538	2,122	2,481	3,038
Other Liabilities +	675	829	946	1,159	1,403	1,271	1,288	1,581	1,829	1,889	2,331	2,475	2,833
Total Liabilities	1,619	1,842	1,883	2,107	2,793	3,494	4,109	5,188	6,238	7,830	8,000	7,515	7,912
Fixed Assets +	505	624	737	848	844	950	1,160	1,346	1,688	1,878	1,793	1,753	1,734
CWIP	13	111	147	107	48	90	30	203	101	40	117	536	879
Investments	389	249	108	198	518	788	487	1,079	1,476	2,893	2,781	1,762	1,412
Other Assets +	713	858	891	954	1,383	1,665	2,432	2,560	2,972	3,019	3,310	3,463	3,887
Total Assets	1,619	1,842	1,883	2,107	2,793	3,494	4,109	5,188	6,238	7,830	8,000	7,515	7,912

Disclaimer : The information mentioned above is merely an opinion and should only be treated for educational purposes. If you have any questions or feedback about this article, you can write us back. To reach out, you can use our contact us page.

Following the automaker’s global wholesales statistics, a number of brokerages upgraded the stock of the Tata group, sending shares of Tata Motors up 8% on Monday. Tata Motors stated in a news release that its worldwide wholesales, which includes Jaguar Land Rover, increased 8% YoY to 3,61,361 vehicles in the March quarter.

Recovery of Tata Motors

“Tata Motors’ three businesses are all in a recovery mode. The India PV sector is seeing a structural rebound, while the India CV business will experience a cyclical recovery. JLR is likewise seeing cyclical growth that is being aided by a positive product mix. The recovery effort will be hampered, nevertheless, by supply-side problems. While the JLR business won’t provide any immediate catalysts, the India business will continue to recover.

The company is trading at 13.7 times its expected FY25 consolidated EPS and 16.9 times its estimated FY24 consolidated EPS, according to Motilal Oswal Securities. The company gets a ‘Buy’ recommendation from the firm with a Rs 525 price objective.

According to Tata Motors, global wholesale sales of passenger cars reached 1,35,654 units in the March quarter, an increase of 10% year over year. 1,07,386 automobiles were sold through Jaguar Land Rover’s global wholesales. (including CJLR volumes of 12,737 units). According to Tata Motors’ press announcement, Land Rover wholesales for the quarter were 91,887 automobiles, compared to 15,499 vehicles for Jaguar.

Domestic Sales

Earlier, Tata Motors said that its domestic CV volume for March was 45,307 units, an increase of 2% year over year, driven by stronger MHCV sales while LCV sales fell year over year. To 44,044 units, PV increased 4% YoY, in line with industry trends. Exports as a whole decreased by 39% year over year. With 6,509 units sold, EV sales made up 15% of all PV volume in March. PV sales increased by 46% YoY in FY23, while CV sales increased by 22%. MHCV sales increased by 35% YoY, while LCV sales increased by 10% YoY.

Let us look at the Fundamentals

Profit & Loss

Consolidated Figures in Rs. Crores / View StandalonePRODUCT SEGMENTS

	Mar 2011	Mar 2012	Mar 2013	Mar 2014	Mar 2015	Mar 2016	Mar 2017	Mar 2018	Mar 2019	Mar 2020	Mar 2021	Mar 2022	TTM
Sales +	122,128	165,654	188,793	232,834	263,159	273,046	269,693	291,550	301,938	261,068	249,795	278,454	318,474
Expenses +	105,541	143,439	164,197	197,980	223,920	234,650	240,104	260,093	277,274	243,081	217,507	253,734	291,386
Operating Profit	16,586	22,215	24,596	34,853	39,239	38,395	29,589	31,458	24,664	17,987	32,287	24,720	27,088
OPM %	14%	13%	13%	15%	15%	14%	11%	11%	8%	7%	13%	9%	9%
Other Income +	891	-74	213	-157	714	-2,670	1,869	5,933	-26,686	102	-11,118	2,424	5,051
Interest	2,385	2,982	3,560	4,749	4,861	4,889	4,238	4,682	5,759	7,243	8,097	9,312	9,964
Depreciation	4,656	5,625	7,601	11,078	13,389	16,711	17,905	21,554	23,591	21,425	23,547	24,836	24,242
Profit before tax	10,437	13,534	13,647	18,869	21,703	14,126	9,315	11,155	-31,371	-10,580	-10,474	-7,003	-2,068
Tax %	12%	-0%	28%	25%	35%	21%	35%	39%	8%	-4%	-24%	-60%
Net Profit	9,322	13,599	9,976	14,050	14,073	11,678	7,557	9,091	-28,724	-11,975	-13,395	-11,309	-3,798
EPS in Rs	32.66	47.60	34.62	48.46	48.44	40.11	25.82	31.13	-99.84	-39.08	-40.51	-34.46	-12.12
Dividend Payout %	14%	9%	6%	5%	0%	1%	0%	0%	0%	0%	0%	0%

Compounded Sales Growth
10 Years:	5%
5 Years:	1%
3 Years:	-3%
TTM:	10%

Compounded Profit Growth
10 Years:	%
5 Years:	%
3 Years:	%
TTM:	-8%

Stock Price CAGR
10 Years:	5%
5 Years:	4%
3 Years:	80%
1 Year:	-3%

Return on Equity
10 Years:	7%
5 Years:	-5%
3 Years:	-14%
Last Year:	-22%

Balance Sheet

Consolidated Figures in Rs. Crores / View StandaloneCORPORATE ACTIONS

	Mar 2011	Mar 2012	Mar 2013	Mar 2014	Mar 2015	Mar 2016	Mar 2017	Mar 2018	Mar 2019	Mar 2020	Mar 2021	Mar 2022	Sep 2022
Share Capital +	635	635	638	644	644	679	679	679	679	720	766	766	766
Reserves	18,537	32,064	36,999	64,960	55,618	78,273	57,383	94,749	59,500	61,491	54,481	43,795	25,409
Borrowings +	32,811	47,149	53,716	60,642	73,610	69,360	78,604	88,950	106,175	124,788	142,131	146,449	144,354
Other Liabilities +	48,400	62,919	76,977	92,180	107,442	114,872	135,914	142,813	139,349	133,181	144,193	138,051	145,111
Total Liabilities	100,382	142,766	168,330	218,426	237,315	263,184	272,580	327,192	305,703	320,179	341,570	329,061	315,640
Fixed Assets +	35,349	44,360	55,512	69,092	88,479	107,232	95,944	121,414	111,234	127,107	138,708	138,855	133,965
CWIP	11,457	15,946	18,454	33,263	28,640	25,919	33,699	40,034	31,884	35,622	20,964	10,251	1,797
Investments	2,544	8,918	8,765	10,687	15,337	23,767	20,338	20,813	15,771	16,308	24,620	29,380	22,126
Other Assets +	51,032	73,542	85,600	105,385	104,858	106,266	122,600	144,932	146,814	141,141	157,278	150,575	157,752
Total Assets	100,382	142,766	168,330	218,426	237,315	263,184	272,580	327,192	305,703	320,179	341,570	329,061	315,640

What Are Profitability Ratios?

A family of financial indicators known as profitability ratios is used to evaluate a company’s potential to create profits over time in relation to its revenue, operational expenses, balance sheet assets, or shareholders’ equity using information from a particular point in time. These indicators are some of the most widely used in financial analysis.

Efficiency ratios, which take into account how well a company uses its resources internally to generate income, can be used in conjunction with profitability ratios. (as opposed to after-cost profits).

KEY TAKEAWAYS

• A company’s capacity to generate profits from sales or activities, balance sheet assets, or shareholders’ equity is evaluated by profitability ratios.
• Higher ratios, which show success in turning revenue to profit, are frequently preferable than lower ratios.
• Margin and return ratios are examples of profitability ratios.

What Can Profitability Ratios Tell You?

In general, larger profitability ratios might indicate a company’s strengths and advantages, such as the capacity to charge more (or less) for items and to keep expenses down.

The most helpful comparisons for a company’s profitability ratios are those with similar businesses, the company’s past performance, or industry averages.

Margin Ratios

The difference between profit and costs grows while costs are low and contracts when more costs (such as taxes, operational expenditures, and cost of goods sold (COGS)) are taken into account.

Gross Margin

The difference between sales income and the previously mentioned COGS, or costs of goods sold, is the gross profit.

It can mean the business has a significant competitive edge.

Therefore, comparing a retailer’s fourth-quarter profit margin to its (or its peers’) fourth-quarter profit margin from the prior year would be the most insightful and helpful.

Operating Margin

How effectively a business handles its operations can be shown by operating margin. That can reveal how well management minimises expenses and increases profitability.

It most likely has lower prices than its rivals. Additionally, it is better equipped to withstand the effects of an economy in decline.

Pretax Margin

The pretax margin displays a company’s profitability after deducting all costs, except taxes and non-operating costs like interest and inventory write-offs.

When compared to its competitors, a company with a large pretax profit margin can be said to be financially sound and capable of setting the most reasonable prices for its goods and/or services.

Net Profit Margin

The net profit margin is used as a proxy for a company’s overall financial health. It can show whether management of the company is making a sufficient profit from sales and keeping all costs in check.

The similar one-off transactions won’t happen at other companies. Because of this, it’s a good idea to include other ratios in addition to net profit margin, like gross margin and operating margin.

As a peer comparison tool, it is limited by the fact that because it takes into account all costs, it can show one-time costs or the sale of assets that increased profits for a specific time frame.

What Are the Most Important Profitability Ratios?

Gross margin, operating margin, and net profit margin are frequently seen as the profitability measures that are most significant for a corporation.

Why Are Profitability Ratios Significant?

They are important because they can show a company’s capacity to generate consistent profits (after deducting expenditures) and how effectively it manages investments to generate returns for shareholders. They may demonstrate the management’s success in achieving these two objectives as well as the overall monetary health of the business.

How Is Business Profitability Best Measured?

Two often used metrics for gauging firm success are the gross profit margin and net profit margin ratios. The net profit margin measures the profit a company makes as a percentage of its total sales after all costs have been deducted. A higher profit than the cost of products sold is referred to as a higher gross profit margin.

Once you get the fundamentals down, learning how to purchase and sell exchange-traded funds (ETFs) is a piece of cake. We explore a few different facets of the procedure and respond to inquiries regarding ETF accounts, the duration of holding an ETF prior to sale, and if it is possible to buy and sell an ETF on the same day.

Where to Buy ETFs

During the course of the trading day, ETFs are bought and sold. You may purchase ETFs through any online broker, just like stocks, so be sure to thoroughly investigate the brokerage account you intend to use before deciding which one is best for you.

DO I NEED A SPECIAL ETF ACCOUNT?

Without the requirement for a specific ETF account or additional order costs, you can buy and sell ETFs at a reasonable price using an online brokerage account.

Mutual fund shares, on the other hand, are not listed on stock exchanges. Instead, investors purchase and sell mutual funds through a range of distribution channels, including through investment professionals (full-service brokers, independent financial planners, representatives of banks or savings institutions, or insurance agents), as well as directly from fund companies.

DO YOU NEED TO HAVE A MINIMUM AMOUNT TO BUY ETFS?

In the past, the cost of one share plus any applicable charges and fees was the minimum an investor had to pay to purchase an ETF; however, make sure your broker permits fractional share purchases of the ETF you’re interested in. ETFs typically cost a lot less than mutual funds.

Buying ETFs in a Few Easy Steps

However, there are a few simple measures you can take to ensure you make wise selections before you start buying ETFs and adding them to your portfolio.

OPEN YOUR ACCOUNT TO BUY AND SELL AN ETF

You can open a joint account or an individual account if you want to buy ETFs for general investing. Select a reliable brokerage company with helpful customer service and technical support in case any problems occur or you have inquiries regarding your investments.

At this point, you should also choose whether you want to handle the management of your ETF portfolio yourself or hire a professional to do it.

RESEARCH ETFS YOU ARE INTERESTED IN

Doing your homework is one of the most crucial aspects in buying an ETF. Before making an investment, make sure you comprehend all the details of your fund, including:

• whether the ETF is actively or passively managed; who manages the ETF;
• previous performance;
• ratio of costs;
• if it does, what index does it follow? and
• Related charges.

To keep track of the ETFs you might want to buy, use My Portfolio on AAII.

How Long Should You Hold an ETF?

For long-term investors, ETFs can be excellent building bricks, but it’s crucial to understand how long you should hold them and when you might want to sell. ETF investments can offer investors a number of advantages, including wide exposure to many industries and sectors as well as assistance in lowering overall portfolio risk.

Long-term investors might keep an ETF that meets their needs for decades in a perfect world, especially if their objective is to fund retirement. You’ll be able to determine how long you should keep an ETF before selling it, though, based on your monitoring strategy.

WHEN SHOULD YOU SELL AN ETF?

Since your unique goals, risk tolerance, and allocation should be taken into account, there is no general rule for when to sell an ETF. Selling an ETF, however, is never a good idea if you:

• beginning to experience pressure from abrupt market falls or crashes,
• Want to liquidate before achieving your goals but need money right away,
• received unfavourable news recently regarding an ETF without investigating financial measures or prior data points.

Additionally, selecting ETFs with adequate liquidity and trading volume is crucial. This is due to the ease with which one can act rashly and sell an ETF without first confirming its liquidity. Low liquidity could cause the ETF to sell at a share price that is momentarily below market value.

Resources to Make Buying ETFs Even Easier

It’s crucial to understand your options when it comes to buying and selling ETFs, but how can you choose which particular ETFs to include in your portfolio? Members of AAII have access to tools that can be used to identify the best ETFs for their needs.

You can use the A+ Investor ETF+ screener to assist you select ETFs by entering the precise criteria and qualities you are looking for in an ETF.