In this article, we are going to discuss RVNL share price targets 2023-2025-2030-2040-2050. Based on the performance of the company the financials of the company and some ratios like P/E ratio and current ratio will help in understanding how the companies gives returns and future.
About RVNL
The core business of RVNL is to implement a variety of rail infrastructure projects including double range gauge conversion, new lines and railway electrification and the company has also constructed some bridges.
RVNL is a Central Public Sector Enterprise functioning as the construction arm of the Ministry of Railways for project implementation and development of transport infrastructure. It was incorporated in 2003 to meet the growing infrastructure needs of the country and implement projects on a fast-track basis. It is a ‘Navratna’ CPSE in India under the administrative control of the Ministry of Indian Railways.
The company has a wide range of business such as they have new lines to double the previous line, existing ones have only one lane.
The company also has a Metropolitan Transport Project Company on the project of setting up metro lines and sub-burden networks in metropolitan cities.
RVNL share price target 2023
Rvnl stock is performing well in the market with a return of 10.38% in the last 1 month and a return of 76.32% in the last 3 months, which is really good. And if you look at the P/E ratio, that too is only 20.06. A P/E ratio of 20 is better than good.
Yes stock and give good returns by 2023 Rs 213.
RVNL share price target 2025
The last 1 year stock return of RVNL is +342%. If the stock gives similar returns in the next 2 years then the stock price can go up to Rs 520. And the company also has a strong order book. The order book includes Rs 52,000 crore. RVNL will get more orders in future. Therefore the total revenue of the company will increase.
RVNL company’s revenue in FY2023 is Rs 21,436.64 crore. Revenue has grown at an annual rate of 22.01% over the last 5 years, compared to the industry average of 10.76%.
RVNL share price target 2030
RVNL has a subsidiary called High-Speed Rail Corporation India Limited which was incorporated for preliminary feasibility study and implementation of high-speed corridor in India to run passenger trains up to 350 kmph. RVNL share price target 2030 is minimum Rs 200 and maximum Rs 800.
RVNL share price target 2040
The company’s net profit increased to Rs 1,421 crore. The company’s sales also increased in Part 3, the rate of increase in sales was 12%. Is the company continuously increasing its sales and making profits? Then the target price of RVNL in 2040 is ₹1250 to ₹1350.
RVNL share price target 2050
The company’s revenue grew by 12.01% over the last 5 years compared to the industry average of 10.76%. Market share has increased from 7.59% to 12.32% in the last 5 years. By 2050, the share price of RVNL may reach Rs 2100 to Rs 2200.
RVNL Share Price Target Table 2023-2050
Years
Minimum Target
Minimum Target
2023
Rs 50
Rs 213
2025
Rs 80
Rs 180
2030
Rs 700 Approx
Rs 800 Approx
2040
Rs 1100 Approx
Rs 1350 Approx
2050
Rs 1900 Approx
Rs 2200 Approx
conclusion The financial position of the company is stable and the operating efficiency of the company is also very good. Another expectation of a company is that a good company should maintain a good order book. Yes, the stock may be an invisible stock but wait for good entry point.
This article is for informational Purpoe.We are not recommending any stock to invest in. Before investing in any stock do your own research.
Best Dividend Stocks: Most of the long term investors get disappointed as they do not get the right value for their time and money invested in the stock market. They may receive less capital appreciation after holding the security for a longer period. But, worry no more! You can earn good returns on both your time and money invested.
One such way to earn more is by investing in dividend stocks. So here, we present you the list of best dividend stocks under Rs 600 to help you grow your wealth.
Best Dividend Stocks Under Rs 600
Under Best dividend stocks under Rs 600, we have handpicked the best stocks from various sectors of the economy. Here, we have discussed the company and its financial performance in brief to help you have a detailed look at the stock.
#1 – ITC
ITC Limited, originally named “Imperial Tobacco Company of India Limited”, is an Indian conglomerate company that was initially started as a tobacco company. The company was established in 1910 in Kolkata, India.
The company operates in diverse business segments including FMCG, Hotels, Paperboard, Paper & Packaging, Infotech and Agri-business.
ITC, the leader in the domestic cigarette market, has a market share of over 80%. The company is a major player in the Indian market with over 36,500 employees and over 200 manufacturing units across the country. The company has 25 FMCG brands and 115 hotels across 80 locations in the country.
According to the Q4 results of FY23 by ITC Limited, gross revenue across all segments grew by 17.6% and profit after tax (PAT) by 24.5%. The company also gives good returns to the shareholders through 24% growth in EPS. The company is debt free from last 5 years with increasing return ratios like ROCE and ROE.
As an achievement in its own right, the company has consistently given dividend for the last 10 years. As per the current share price, the company pays a dividend of 3.5%.
CMP (In Rs)
470
Market Cap (in Rs Crs)
5,87,698
Dividend Yield (%)
4.04 %
Face Value (in Rs)
1
EPS (In Rs)
15.44
P/E Ratio
28.48
ROCE (in %)
35.81
ROE (in %)
27.75
Promoter Holding
0
Book Value
49.51
Debt Equity Ratio
0
Price to Book Value
8.89
#2 – Indraprastha Gas
Indraprastha Gas Limited is one of the well known natural gas distributors in India. Best Dividend Stocks list It was established in 1998 to take over the Delhi City Gas Distribution Project from GAIL (India) for laying a network of gas distribution pipelines.
The company is engaged in distribution of natural gas to domestic, commercial and transportation sectors in the National Capital Territory of Delhi.
It supplies Compressed Natural Gas (CNG) to the transport sector, Piped Natural Gas (PNG) to the domestic and commercial sectors and Regasified Liquefied Natural Gas (RLNG) to industries.
The company’s board has PSUs such as GAIL and BPCL as promoters, each holding an equal stake of 22.5%, as well as the Government of NCT Delhi with 5%.
Carrying forward the company’s financials, the company reported a 145% increase in sales from Rs 5,764 crore in FY23 to Rs 14,145 crore in FY23 and an 83% increase in net profit to Rs 755 crore in FY2019. 1,386 crore from Rs. In FY23.
Talking about the return ratio, the company has an upward trend in ROCE and ROE after the pandemic. It is a debt-free company with year-on-year (YoY) EPS growth.
The company is paying dividend regularly for the last 10 years. For the year ending March 23, it has declared a dividend of 650% at Rs 13 per share on the face value. As per the current share price of Rs 480, the dividend yield is 2.7%.
CMP (In Rs)
487
Market Cap (in Rs Crs)
33,022
Dividend Yield (%)
2.7
Face Value (in Rs)
2
EPS (In Rs)
23.42
P/E Ratio
20.14
ROCE (in %)
22.4
ROE (in %)
20.67
Promoter Holding (%)
45
Book Value (In Rs)
113.3
Debt Equity Ratio
0
Price to Book Value
4.17
#3 – AllSec Technologies
Allsec Technologies Limited is an Indian company incorporated in 1998 in Chennai, India is one of the best stock in Best Dividend Stocks list. It is a global leader in outsourcing solutions providing future-ready, flexible business solutions to industry giants, Fortune 100 companies and growth-focused organizations.
It primarily provides business solutions under two segments, Digital Business Services and Human Resource Outsourcing (HRO). It was acquired by Quess Corp in 2019. Being in the industry for more than two decades, the company has more than 5000 employees. It has its operations in 3 locations across India namely NCR, Bengaluru and Chennai.
There is an upward trend in both the revenue and profits of the company in the last 5 years from FY19 to FY23. From FY19 to FY23 the revenue has almost doubled from Rs 261 crore to Rs 390.5 crore in the last 5 years.
Talking about net profit, we can reach 37% increase in net profit from Rs 35 crore to Rs 48 crore on YoY basis. Allsec Technologies has maintained high ROE and ROCE. Furthermore, it has a high dividend yield of 4.23%.
Gujarat Heavy Chemicals Limited is an Indian company founded in 1983 best stock in Best Dividend Stocks list. The company is primarily involved in business sectors such as chemical, textile and consumer product manufacturing. With a presence of more than three decades in the industry, the company has achieved a turnover of 37.89 billion.
In the chemical industry, GHCL manufactures Soda Ash with a production capacity of 1.1 million MTPA. In addition, it aims to increase the production capacity to 500 thousand MTPA by 2025.
GHCL is also one of the leading yarn manufacturers in the country and produces cotton and synthetic yarns. The Consumer Products Division of GHCL manufactures and sells Edible Salt and Industrial Grade Salt under the brand names I-FLO and Sapan.
Moving on to the financials, we can see an increase in the revenue as well as profits of the company. Revenue has increased from Rs 3,778 crore to Rs 4,545 crore from FY 22 to FY 23. Profit has also increased by 90% to Rs 1,141 crore from Rs 598 crore.
Moreover, the company has been consistently paying dividend to its shareholders for the last 5 years. As per the current share price of Rs 493.65, the dividend yield on the stock comes out to 3.55%.
CMP (In Rs)
518
Market Cap (in Rs Crs)
4903
Dividend Yield (%)
3.55
Face Value (in Rs)
10
EPS (In Rs)
117.69
P/E Ratio
4.19
ROCE (in %)
31.97
ROE (in %)
28.85
Promoter Holding (%)
19.05
Book Value (In Rs)
413.84
Debt Equity Ratio
0.09
Price to Book Value
1.2
#5 – Balmer Lawrie Investments
Balmer Lawrie Investments Limited is a Government (Non-Banking Financial Institution) NBFC where the President of India is a major shareholder with 59.67% stake.
The company was incorporated as NBFC in 2001. Even though it is an NBFC, it does not undertake any non-banking finance activity other than holding equity shares in its subsidiary Balmer & Lawrie Company Limited.
A subsidiary of Balmer Lawrie Investments Ltd. is a Miniratna PSU engaged in the business of industrial greases, specialty lubricants, logistic infrastructure etc. The company is listed on the Bombay Stock Exchange and the Calcutta Stock Exchange.
The revenue earned from the subsidiary company is directly reflected in the financial position of this holding company. The company’s revenue has increased from Rs 2060 crore in FY22 to Rs 2,328.39 crore in FY22 and net profit has increased from Rs 137.20 crore to Rs 172.36 crore, a growth of 25.7% in overall net profit.
Talking about dividend yield, it is a good dividend paying stock with dividend yield up to 7.5%. The company has been paying dividend to its shareholders continuously for the last 10 years.
Whenever investors talk about the recent boom in the chemical sector in India, Deepak Nitrite’s name always pops up. Fundamental Analysis of Deepak Nitrite of the stock has given multi-bagger gains to thousands of investors. But is there more to it? Or is the whole boom over and over now? In this article, we will undertake a fundamental analysis of Deepak Nitrite Limited and try to find out if there is much more to it than that.
Fundamental Analysis of Deepak Nitrite
We will begin with a brief overview of the company’s business and how its product portfolio has changed over the years. Later, we’ll run through the industry landscape and the stock’s financials. A section on future plans and a summary end at the end of the article.
Company Overview
Deepak Nitrite Limited (DNL) is a fast growing chemical intermediates Indian company with a well diversified portfolio. It is the largest producer of Sodium Nitrite, Sodium Nitrate, Phenol and Acetone in India.
DNL was started 50 years ago in Gujarat in 1970 by C.K. Mehta is the father of the present Chairman and MD Deepak C. Mehta.
As on date, it produces 30+ products from its 6 manufacturing plants. The company serves more than 1,000 customers in 45 countries globally. It had a strong workforce of 2,006 employees at the end of FY22.
Deepak Nitrite has been a major beneficiary of the boom of the Indian chemical industry in the last half a decade. In the following sections, we will read more about how it has become the preferred choice of Indian companies for phenolics, which they used to import earlier.
DNL’s product line can be divided into 4 segments:
1. Basic intermediates are standard products like sodium nitrite, sodium nitrate etc. which find application in industries like petrochemicals, rubber, agrochemicals and industrial explosives.
2. Fine and specialty chemicals are specialized, high-margin products. The company caters to the specific requirements of the clients in the areas of Paper, Personal Care, Pharma and such others.
3.Performance products are chemicals (used in paper, detergent and other industries) that add special characteristics to any product.
4. The Phenolics division has expanded rapidly in recent years as DNL has become an import substitute for Indian automotive, pharma, rubber and various other players.
The table below shows how the revenue segments of Deepak Nitrite have grown over the years.
The share of DNL’s various product segments in its revenue has changed over the years. Most significant is the growth of the Phenolics segment (it comes under Deepak Phenolics, now a wholly owned subsidiary of Deepak Nitrite) which grew to 62% of the company’s revenue in FY22. Established in 2014, Phenolics was a small division of the company that previously generated negligible income.
Geographic segment
Exports accounted for 22.49% of the company’s total revenue in FY22. Domestic sales garnered a 77.51% majority of total revenue.
Now we are well aware of what the company does and how it has matured over the years. As part of our fundamental analysis of Deepak Nitrite, let us equip ourselves with the Indian chemical industry scenario.
Industry Overview
According to FICCI data, India has a market share of 4 per cent in the $5,027 billion global chemical industry. China is the largest producer with 39% share. ‘Commodity’ chemicals and ‘specialty’ chemicals make up about 80% and 20% of the total market, respectively.
From 2017 onwards, the Chinese chemical industry began to falter as the government tightened controls on pollution and emissions. Due to this the prices increased all over the world. The structural change presented a huge opportunity for Indian companies as most of them already had eco-friendly practices in place.
The Indian specialty chemicals sector is projected to double its share in the worldwide market by 2026 from 4% to 6% at present. The annual growth is pegged at 18-20% in FY22 and 14-15% in FY2023.
Best Mid Cap Stocks: As per the recently announced classification by Association of Mutual Funds in India (AMFI) in early 2023, stocks having market capitalization between ₹16,800 – 48,900 crore fall under ‘Mid-Cap’ category Are. As a result, currently more than 150 companies in the country fall under a single category of stock.
Over the years, it has been observed that mid-cap stocks have outperformed both large-cap and small-cap stocks. Such an advantageous position in the stock market has made them a favorite of seasoned investors. These types of stocks can take advantage of the best of both ends, that is risk moderation and adequate returns.
Some of the characteristics of mid-cap stocks include diversification of stocks, greater liquidity as compared to small-cap stocks and higher potential for growth leading to increased profitability.
Best mid cap stocks
In this article, we will race amongst the best mid-cap stocks in India. The primary factor in the selection of stocks has been the market capitalization of the companies. Let’s look at them one by one.
Federal Bank Limited is one of the Best Mid Cap Stock an India-based commercial banking company operating through a network of branches and ATMs across the country. The business segments of the company include Corporate/Wholesale Banking Segment, Treasury Segment, Retail Banking Segment and Other Banking Operations including Para-Banking Activities and Other Banking Transactions.
It generates most of the revenue from the domestic markets. The market capitalization of the company is Rs 27,747 crore.
As of the quarter ending December 2022, the bank has a total of 1,272 branches and 1,957 ATMs/recyclers. Apart from this, the bank has more than 1,10,00,000 customers using its services.
The financial position of the company has registered an increase with a shift from Rs 1,647 crore in FY 2020-21 to Rs 1,965 crore in FY 21-22.
The valuation of some metrics specific to the banking industry, the gross as well as the net NPA ratio, has gone down with the former going down to 3.41.
NMDC Limited is second Best Mid Cap Stock engaged in the business of mining a wide range of minerals including copper, iron ore, rock phosphate etc. Most of its revenue comes from the ‘Iron Ore segment’. Geographically, the company generates most of its revenue from the Indian domestic market. The market capitalization of the company is Rs 32,193 crore.
The company produces about 35 metric tonnes per annum (MTPA) of iron ore from its major iron producing units, which are ‘Bailadila’ sector in Chhattisgarh and ‘Donimalai’ in Bellary-Hospet sector in the state of Karnataka. It aims to achieve 100 MT iron ore production capacity by FY30.
The company’s revenue increased from Rs 15,370 crore in FY 2020-21 to Rs 25,882 crore in FY 21-22. Similarly, the net profit figure of the company has increased from Rs 6,247 crore during FY20-21 to Rs 9,392 crore in FY21-22.
Profitability metrics such as ROE and ROCE reported good improvement with ROE increasing from 21.71 per cent in FY20-21 to 28.96 per cent during FY21-22 and ROCE during the same period showing a momentum from 29.65 per cent to 37 per cent . Though within the ideal range, the company’s debt-to-equity ratio increased from 0.07 in FY20-21 to 0.1 during FY21-22.
3 – Power Finance Corporation Limited
Power Finance Corporation Limited is again Best Mid Cap Stock for financial institution operating in the country dedicated to the power sector and various projects under it. The product portfolio of the company includes short term loans, range of credit facilities etc.
The company works hard to explore new areas for sustainable development such as providing funding to nuclear power projects, renewable equipment manufacturers, etc. The market capitalization of the company is Rs 41,436 crore.
4 – Rural Electrification Corporation Limited
Rural Electrification Corporation Limited (REC) is forth Best Mid Cap Stock a government agency established in 1969. The agency was formed with the main objective as well as to promote ‘Power Sector’ projects across the country.
The company is also engaged in providing credit support to Central and State power sector utilities, private sector project developers etc. REC has a market capitalization of Rs 32,165 crore.
With revenue increasing from Rs 35,553 crore in FY 20-21 to Rs 39,282 crore in FY 21-22, the financial company exhibits a strong track record of robust growth. In addition, profit after tax increased from Rs 8,380 crore in FY 20-21 to Rs 10,048 crore in FY 21-22.
Profitability metrics have also shown an increase in numbers. The return on equity (ROE) moved from 21.32 per cent in FY20-21 to 21.39 per cent in FY21-22. The return on capital employed (RoCE) during the same period showed an opposite trend with a marginal decline from 9.29 per cent to 9.1 per cent.
The debt-to-equity ratio of the company, though higher than desired, has seen a decline for a couple of financial years, with the most recent change from 7.53 in FY 20-21 to 6.49 during FY 21-22.
2.8 in FY20-21 and subsequently going down to 0.96 from 1.19 during the same period, during FY21-22.
Profitability metrics such as ROE and ROCE moved in opposite directions with ROE showing upward momentum, most recently from 10.52 per cent to 11 per cent during FY 20-21. In contrast, the ROCE number decreased from 10.12 percent to 9.68 percent, keeping the time frame the same.
5- Aditya Birla Capital Limited
Based in Mumbai, Aditya Birla Capital (ABCL) is Best Mid Cap Stock a wealth management firm with a strong presence in various lines of business such as asset management, corporate debt, private equity, currency, commodity broking, etc.
The company is committed to the core objective of serving end-to-end financial services and catering to the needs of its retail as well as corporate customers. The market capitalization of the company is Rs 38,305 crore.
The consistent growth in revenue and net profit figures contribute to show a healthy picture of the company backed by efficient cost management. As mentioned, revenue grew from Rs 19,554 crore in FY 20-21 to Rs 22,608 crore in FY 21-22, and net profit increased from Rs 1,106 crore to Rs 1,660 crore during the same period.
Return on Equity (RoE) and Return on Capital Employed (ROCE) increased from 8.52 per cent in FY 2020-21 to 11.50 per cent during FY 21-22 and marginally improved subsequently during the same period. 8.12 percent to 8.24 percent.
Penny stock are an investment made with the aim of getting the highest returns. These are high risk investments as the trading volumes are low and hence they are illiquid in nature.
Here are 4 penny stocks in which State Bank of India has invested in December quarter 2023.
Tamil Nadu Telecom Limited
Tamil Nadu Telecom Limited is one of the largest manufacturers of optical fiber cables in India. It has a diverse portfolio whose products range from manufacturing of state-of-the-art optical fiber cables.
Before the end of the session, the penny stock declined marginally and ended at Rs 6.90.
In the past six months, shares have declined by more than 12 percent.
Its market capitalization is Rs 31 crore. State Bank of India holds 9.30 per cent stake in the company with a holding value of Rs 2.9 crore. Meanwhile, the promoters hold 63.63 per cent and have not pledged any shares.
Rajshree Sugars & Chemicals Limited
Shares of Rajshree Sugars and Chemicals declined by over 3.5 per cent and ended the day at Rs 47.90. In the past six months, the stock has gained over 35 per cent.
Rajshree Sugars & Chemicals Limited has interests in integrated sectors such as sugar, distillery, power and biotechnology. The company also has presence in the green power sector.
The market capitalization of the penny stock is Rs 164 crore. State Bank of India holds 9.36 per cent stake in the company with a holding value of Rs 15.4 crore. The promoters hold 40.66 per cent and have pledged 100 per cent of it.
MSP Steel & Power Limited
Shares of MSP Steel & Power fell 2.5 per cent to close at Rs 9 on Friday. In the last six months, the stock has declined by more than 6 per cent.
MSP Steel & Power Limited is one of the leading steel companies in the country. The company is present in the value chain of rolled long products, except captive iron ore and coal mines. Its clients include names such as Bharat Heavy Electricals Limited, Dilip Buildcon and National Highways Authority of India.
State Bank of India holds 11.27 per cent stake in the company with a total holding value of Rs 40.2 crore. The promoters also hold 41.62 per cent and have pledged 100 per cent of it. The market capitalization of MSP Steel & Power is Rs 356 crore.
Consolidated Construction Consortium Limited
Shares of Consolidated Construction Consortium closed on the green mark at Rs 1.40 on Friday. The penny stock has been trending downward and has dropped nearly 16 percent in a month.
Consolidated Construction Consortium Limited (CCCL) is an integrated turnkey construction service provider engaged in building design, engineering, procurement, construction and project management.
The market capitalization of the penny stock is Rs 53 crore. State Bank of India has a higher stake of 29.35 per cent in the company with a holding value of Rs 15.8 crore. The promoters hold 15.16 per cent and have pledged 77.99 per cent of this.
Recently, Ambuja Cements brought by Gautam Adani grabbed headlines again by becoming India’s second largest cement producer in one stroke. The Adani family acquired the assets of Holcim India, Ambuja Cements and ACC for $6.4 billion.
This begs a question, “What did the Adani family see in Ambuja Cements and ACC?” Let us try to answer this by doing a fundamental analysis of Ambuja Cements.
We’ll start by getting a quick overview of the company. After that, we move forward to understand the scenario of India’s cement industry. Next, we look at how the company has grown over the years, its return ratios, and its profit margin. Future plans and a summary ends the article.
Table of Contents
Ambuja Cements – Company Overview
Industry Overview
Ambuja Cements – Financials
Revenue & Net-Profit Growth
Profit Margins
Debt & Return Ratios
Shareholding Pattern & Pledged Shares
Future Plans Of Ambuja Cements
Fundamental Analysis Of Ambuja Cements – Key Metrics
In conclusion
Ambuja Cements – Company Overview
Established in 1983, Ambuja Cements is one of the leading cement producers in India. It owns 6 integrated manufacturing units, 8 grinding units, 5 captive power plants and 5 bulk cement terminals. This gives the Mumbai-based company a cumulative manufacturing capacity of 31.45 MTPA.
The company has a diversified presence in most parts of the country: northern, western, central and eastern markets. Ambuja has a monopoly market share of 89% in the blended cement category.
The figure below shows the diversified manufacturing and sales capabilities of Ambuja Cements Limited.
In 2006, The Holcim Group, headquartered in Switzerland, entered into a partnership with Ambuja Cements. Over time, it acquired a majority stake of 63% in the company. In another move in 2016, Ambuja bought out Holcim’s stake in ACC, which the Swiss major had started acquiring in 2004. This made Ambuja the majority shareholder in ACC Limited with a stake of 54.53%.
However, as recently as May this year, the company saw an ownership change. Adani Group’s Ports Power acquired Holcim’s Indian interests in Ambuja and consequently ACC.
Having learned about the company, let us now move to an overview of the cement industry in India as part of our fundamental analysis of Ambuja Cements Limited.
India’s cement industry is the second largest in the world after China. It accounts for 8% of the global cement market with an estimated manufacturing capacity of 550 MTPA. However, at 242 kg, the country’s per capita cement consumption is less than half of the world average of 525 kg. This offers a huge growth opportunity for Indian cement producers.
Cement demand in India grew by 13% year-on-year (y-o-y) in calendar year 2021. It is projected to grow by 7% year-on-year in 2022. The growth of the cement sector follows the GDP growth of the country. , making it a cyclical industry.
Going forward, structural demand from the housing sector, rising rural incomes, national infrastructure pipeline expenditure, and industrial/commercial demand will be the primary growth drivers for the region.
The industry is heavily dependent on electricity, fuel and transportation costs. For example, power and fuel costs and freight and forwarding expenses accounted for about 60% of Ambuja Cements’ costs in FY11.
The huge transportation cost involved in the movement of raw materials and finished cement makes the cement industry a geographical sport.
Thus we can conclude that the Indian cement industry is a slow growing sector with immense potential for growth. Now we can move ahead to know how has been the growth of Ambuja Cements in the last five years.
Ambuja Cements – Financials
Revenue and net profit growth
As mentioned earlier, Ambuja Cements holds 50.05% stake in ACC Limited, making it a subsidiary of the former. For FY21 ended December, ACC reported sales of ₹16,152 crore. Standalone operations of Ambuja Cements generated revenue of ₹ 13,965 crore.
This prompts us to study the consolidated as well as standalone revenue and net profit figures of the company as part of our fundamental analysis of Ambuja Cements.
Over the last 5 years, the consolidated revenue of Ambuja Cements has grown at a CAGR of 4.17% every year. During the same period, standalone revenue saw an annual growth rate of 5.96% every year.
As far as its net profits are concerned, they have grown at the rate of 13.79% and 10.73% respectively in the last 5 years on consolidated and standalone basis.
The table below presents the revenue and net profit figures of Ambuja Cements on a consolidated and standalone basis for the last five years.
Profit Margins
So far we have covered company description, industry overview and company developments as part of our fundamental analysis of Ambuja Cements Limited. In this section, we talk about the profit margin of a cement manufacturer.
The operating and net profit margins of Ambuja Cements have increased over the years due to better capacity utilization. The table below shows the profit margin for the last five years.
Debt and Return Ratio
Ambuja Cements is almost debt free company with very low debt. 47 crores and a negligible debt-to-equity ratio of 0.02.
With respect to the consolidated return ratios of Ambuja Cements, we can see in the table below that they have consistently improved over the last five financial years. In FY21, the return on equity and return on capital employed stood at an impressive level of 10.96% and 15.92% respectively.
Shareholding pattern and pledged shares
Currently, Adani Group holds 63.22% stake in Ambuja Cements through Holderend Investments Limited and Endeavor Trade & Investment Limited. For large scale purchase of cement companies, the group pledged its entire stake in Ambuja Cements and ACC. immediately after acquisition.
According to separate filings given to the exchanges, the group said that around 57% of ACC and 63% of Ambuja Cements are encumbered “for the benefit of certain lenders and other financial parties”.
Additionally, FII and DII hold 11.05% and 26.26% stake in the company, respectively.
Future plans of Ambuja Cements
1. In FY21, the company spent Rs. 1,160 crore towards capex. Rs 310 crore will be earmarked for brownfield expansion of 1.5 MTPA at its Ropar unit.
2. In addition, it increased the clinker capacity to 3.2 MTPA (brownfield) and cement grinding capacity to 7 MTPA.
3. Ambuja Cements has also acquired limestone reserves to support its long term growth plans.
4. The cement maker has an audacious target of achieving 50 MTPA production capacity in the near future, a growth of 59% from current levels.
5. For the long term goals of both the companies, Gautam Adani has announced a long term goal of 140 MPTA by 2030. This points towards doubling the production capacity from 70 MTPA at present.
Conclusion
In this article, we have done the fundamental analysis of Ambuja Cements. From what we have learned, we can say that Ambuja Cements was a company that settled comfortably in a cyclical, slow-moving industry. This was reflected in its share price which rose 77% in the last five years.
However, ever since Adani announced the acquisition of the two companies in mid-May this year, the value of Ambuja Cements has appreciated by over 46%. This comes after Gautam Adani announced big plans for cement companies. It will be interesting to track the company’s growth story from this point.
In your opinion, should investors climb the wall of Ambuja’s rising stock? Or should they wait for material growth in the company? How do you tell us in the comments below?
Now you can get latest updates in share market on Trade Brain News and you can also use our Trade Brain portal for fundamental analysis of your favorite stocks.
Every morning thousands of people thronged to practice yoga which is related to Patanjali foods. It started in the late 90s. By 2002, Baba Ramdev was popularizing yoga among Indians through television and through his mass yoga camps. Soon, Patanjali became a household name in India.
There was a time when social media was flooded with memes about the next product to be launched by Patanjali. Well there are many. However, you must have heard of Ruchi Soya. It is not a product but a company acquired by Patanjali Group.
Ruchi Soya Industries Limited, now renamed as Patanjali Foods Limited, was in the news for some time. There was a huge jump in the share price and no one knows why! In this article, we will do a fundamental analysis of Patanjali Foods and know more about its story
Fundamental Analysis of Patanjali Foods
Patanjali Foods is also known as Ruchi Soya Industries. Today we take an in-depth fundamental analysis of Patanjali Foods and know more about the company, verticals, MOT and more.
The Indian edible oil market is the fourth largest in the world after the United States, China and Brazil. It is witnessing a major shift towards branded and packaged food items due to the increased focus on health, wellness and immunity amid the pandemic.
Convenience and digitization are the key factors driving demand and growth in this segment. In addition, increasing population and per capita income has accelerated the demand for edible oils.
Experts say that the market is expected to grow 10.82% annually (CAGR 2022-2027). He says that the edible oil segment is expected to grow by a volume of 18.8% in 2023 and the average per capita volume is expected to be 3.80 liters in 2022.
About the company
Patanjali Food Limited has grown into an integrated player in the edible oil business, with a farm to fork presence. It is among the top Fast Moving Consumer Goods (FMCG) and Fast Moving Health Goods (FMHG) players in the edible oil segment in India. The company is a leader and market leader in the branded textures soy protein space.
What happened to Ruchi Soya Industries?
Patanjali Group acquired Ruchi Soya Industries Limited for Rs 4350 crore in 2019 under the Corporate Insolvency Resolution Process (CIRP). In less than three years, the company crossed Rs 24,000 crore revenue and turned profitable in the first full year of operations.
However, the company’s journey over the past decade has been full of ups and downs.
Indian companies get most of their crude palm oil requirement from Indonesia. In October 2011, Indonesia raised export duties on crude palm oil and cut export duties on refined edible oil.
As a result, the cost of purchase of Ruchi Soya went up and this had to impact margins. Its business failed and its debt burden spiraled out of control.
Entered Patanjali Group
Banks dragged Ruchi Soya Industries to court Lenders agreed to resolve bankruptcy proceedings by selling Ruchi Soya to another FMCG company. Patanjali acquired 99% of the total ₹9,000 crore and cleared dues worth ₹4,000 crore. The existing shareholders lost most of their investment and the company was delisted from the stock exchanges.
Relief and Fantastic Benefits
After the acquisition, the company got re-listed on January 27, 2020 and started trading at ₹ 16.5. After a while, within five months, its share price increased by 9100% to Rs.1500. However, then only 1% of its shares were trading in the market. It was possible for investors to buy or sell shares at higher prices.
As a result, Patanjali had to reduce its stake to 90% in twelve months and 75% in three years.
Patanjali Foods – FPO
In March 2022, the company came up with a follow-on public offer (FPO) of ₹4,300 crore. This included allotment of 6,61,53,846 equity shares of face value of ₹ 2 at a premium of ₹ 648 per share. The company achieved a market capitalization of ₹ 33,479 crore after listing its shares under FPO on April 8, 2022. This amount was used for:
• Redeem Debentures and Preference Shares.
• Repay term loans and working capital loans to attain debt-free status.
Patanjali Foods – Manufacturing Capacity & Distribution
Patanjali Foods has 22 manufacturing units. They can crush 11000 tonnes of seeds and pack 10000 tonnes per day. Its manufacturing facilities are strategically located. In fact, they strike the right balance between raw materials and proximity to markets.
The company has a wide distribution network and adequate manpower. It aims to increase penetration in metros, semi-urban and rural markets. In fact, the company has 7602 Distributors, 95 Sales Depots, 305 Mega Stores, 104 Super Distributors and 9,82,131 Retail Outlets.
It has started using digital platforms to meet the changing consumer preferences and personalize the user experience. In addition, it exports products like soya meal, lecithin and other food ingredients to 31 countries.
Patanjali Foods – Moat
• Farmer friendly company with rural integration.
• Balanced mix of inland and port based refineries has helped in reducing logistics cost. In fact, this has given it a significant transportation cost advantage related to road travel.
• A healthy mix of upstream and downstream business with presence across the entire value chain.
• The company has contract manufacturing facilities which enable it to effectively meet the market demand of its products without significant capital expenditure.
Fundamental Analysis of Patanjali Foods – Scope
Patanjali Foods has six business verticals:
Edible Oils, By-Products, and Derivatives
It is one of the largest oilseeds solvent extraction and edible oil companies in India. The company has a strong portfolio of brands like Ruchi Gold, Mahakosh, Nutrella, Sunlight, Sunrich and Ruchi Star. It sells a variety of edible oils, vegetable and bakery products.
palm oil plantation
Palm oil yield and per hectare income is better than other oilseed crops. It is a leading player in palm oil processing in India with a capacity of 0.90 million metric tonnes per annum. In addition, it has access to more than 2.50 lakh hectares of potential oil palm cultivation in various states of India.
It has signed MoUs with ten state governments under the public-private partnership model promoted by the government.
FMCG
Patanjali Foods aims to increase its share in the food business volume and product offering. In addition, they are a leader in edible soy flour and textured soy protein.
It acquired the biscuit cookies and rusk business from Patanjali Natural Biscuits Private Limited and Patanjali Ayurved’s food retail business venture for ₹690 crore.
Oleochemicals
Oleochemicals are chemicals derived from natural sources, including plants, fats, and oils. They become raw materials or intermediaries for various industries.
This is their downstream business. They efficiently utilize the by-products produced under this vertical mainly in their edible oil refineries. They manufacture products such as soap noodles, glycerin and distilled fatty acids.
Nutraceuticals
Fast Moving Health Goods (FMHG) has received excellent response in the market, apart from opening up a new revenue stream for the company. This vertical includes various brands under categories like general nutrition, sports nutrition and medical nutrition.
In addition, they are co-branded under Patanjali and Nutrela and certified by FSSAI and Ministry of AYUSH. The preventive healthcare segment witnessed a huge boom and the company is poised to capitalize on this as the industry deepens its presence in India.
Renewable Energy- Wind Energy
Patanjali Foods Limited has windmill establishments in Madhya Pradesh, Tamil Nadu, Maharashtra, Gujarat and Rajasthan. It has a total wind power generation capacity of 84.6 MW. It is used for captive use as well as for sale. In addition, it is focusing on sourcing power for its business operations at 11 locations in 6 states.
Patanjali Foods – Financial
Revenue and net profit growth
On a standalone basis, the company’s revenue shows an increasing trend over a period of five years. The company suffered huge losses in 2018 but recovered after that.
Hence the chart shows an increasing trend in profit. However, profits have come down in the last two years. Its sales grew at a 3-year CAGR of 37.90% and its net profit grew at a 3-year CAGR of 224.19%.
those days. Hence, the above table represents the numbers from its standalone statement.
• The Company’s Return on Equity (ROE) is 16.51% and Return on Capital Employed (ROCE) is 15.49%. In general, an ROE of 15% to 20% and an ROCE of at least 20% is considered good. The company has a return on assets of 7.02% which is good.
• Patanjali Foods has a debt-to-equity ratio of 0.72. Its interest coverage ratio (ICR) is 4.41. Ideally, an ICR of more than 3 is good.
• Its promoters currently hold 80.82% stake in it. It reduced its promoters’ pledge from 99.97% to 0% in the September quarter of 2021. This is a positive sign.
• The company’s shares are trading at a price-to-equity ratio of 55.72, which is lower than the sector PE of 62.29. This indicates that the stock is currently available at a low price and may increase in price in the future.
• Patanjali Foods is a large-cap company with a market capitalization of ₹48,688 crore.
we will do a fundamental analysis of Tanla Platforms where we will cover its Business Profile, Leadership, Key Strengths, Competitors and Future Growth and then we will cover the Company’s Financial Position, finally, we conclude Determine whether tonal platforms are fundamentally strong.
This is a sharp improvement in technology sector companies and has made some of these technology companies available at attractive valuations, so today I want to discuss the business of a very fast-growing technology company which is the hottest and fastest growing Works at one of the companies. Blockchain technologies including cloud computing, machine learning, etc.
I share some quick facts about this company since 2016, the revenue of this company has increased from 432 crores to 3001 crores, which is an increase of 600 in the last five years, and its profit has increased from 7 crores to 501 crores And that seven thousand percent growth over the last five years, which is an incredible journey so far, and in this journey, the stock has generated more than 30x returns in five years.
The company is virtually debt free and has generated a free cash flow of Rs 613 crore in the last three years, now you must be wondering if the stock has already risen so much that the reason why I am talking about it is because Despite that exponential growth this company has a huge growth potential over the next five to ten years, with a market capitalization of around ₹9917 crores.
Introduction
Established in 1999. Tanla Platforms is a Cloud Communication Company based on Hyderabad Tanla Platforms which basically works on C-PASS technology which is a Communication Platform as a Service.
Communications Platform as a Service is a cloud-based delivery model that enables enterprises to add voice, video,and messaging features to their existing business software using APIs.
C-Pass allows enterprises to choose real-time communication features and embed them in their apps and services to give you an idea. C-Pass technology is one of the fastest growing technology in the telecommunications sector and its growing Hopefully several times over the next few years.
Tanla platforms was the first company to develop and deploy A2P SMSC in India, so A2P SMSC stands for the app-to-person short message service center, it aims to send SMS on behalf of mobile users and deal with bulk SMS from applications.
One of the simple use cases of this a2p smsc is otp service, we all know how important otp are especially when it comes to bank login or confirmation of any transaction or any authorization and that is where bulk SMS to tal enterprises And helps in sending OTP.
In fact, the Tanla platforms was the technology partner of the Government of India during covid vaccination, so the covid app we use for immunization uses the Tanla platforms service for OTP, now you can imagine the scale of the Tanla business Huh.
Tanla processes over 800 billion interactions annually and approximately 62 percent of India’s A2P SMS traffic is processed through its distributed ledger platform called TripLock, making it the world’s largest blockchain use case, so 2021 has been a marquee year for Tanla with two massively successful launches. Platform two blocks and wisely.
Fundamental Analysis of Tonal Platforms
The fundamental analysis of tonal platforms is as follows:
Products
• If you look at the product, TrueBlock is the world’s first blockchain blockchain-enabled c-pass stack processing over 270 billion transactions so far and Tanla recently partnered with Microsoft and in January 2021, Wise One The product is launched.
• It is a blockchain-enabled communications platform as a service offering built on Microsoft Azure, a unique marketplace for enterprises and suppliers to intelligently deliver a global H2S network that connects your It Provides a private secure, and reliable communication experience.
• Tanla is the leader in the Indian sea-pass industry with 42% revenue market share and around 800 billion interactions per year.
• If you look at the business segment of Tanla it works with both enterprises as well as telecom operators for example enterprises use the Tanla platform for SMS Marketing Two-Factor Authentication where the user is required to login to Omnichannel Communications Telecom Get OTP to SMS Voice Calls Chat Apps Email Push Notification and so on.
• Mobile operators use TANLA for services like SMS A Firewall which monitors your SMS traffic plug revenue leakage and product network from spam spoofs and other abusers, then it provides a PSMSC service which is a 2P messaging Short Message Service Center for Telecom Companies. ,
• This is basically for sending messages through the app.
Management
• If you look at the leadership, its chairman and chief executive officer is Mr. Uday Reddy, he is also the founder of the company, so he is the chief architect of the development, so that
Key strength
• If you look at the core strength of the company, the last major strength is innovation.
• The main reason for the extraordinary development of the Tanla Manch was an innovation.
• It built tools that work on the latest CPA technology and use other technologies such as blockchain and machine learning.
Competitor
• If you look at the competitors Tanla’s competitive route in India is mobile.
• If you look at the future growth by 2023, the global sea-pass industry is projected to grow to $47 billion by 2023.
Future development prospects
• The Indian c-pass addressable market is expected to grow to $1.1 billion, accelerating the pace of growth with the rapid adoption of digital transformation by enterprises and then increasing the smartphone user base for commerce and communications and the need for personalized and targeted communications powered by Omnichannel. Driven by necessity. Experience.
• Overall, ninety percent of enterprises globally will adopt CPA-driven growth in the coming years in 2018. Tanla had acquired Curix Mobile for 340 crores.
• Carix is a leading commercial cloud communications provider, reaching over 1500 enterprise customers across various industries across the country, with this transaction Tanla is India’s leading enterprise cloud communication with top clients in Banking, Insurance, Automotive, and DTH Retail has become one of the providers. , and many other platforms.
• Tanla also acquired Gamuga which is a big data and AI-powered omnichannel marketing automation platform that enables businesses to engage in person with their users across channels including SMS, email, voice, website, app, and other key channels.
• Gamooga is a marketing automation service provider for the b2c company, besides the last two latest products intelligently and high growth potential Triblock which is in the blockchain platform has a 63% market share in India and it is one day Manages over one billion transactions in the US. Wisely, which is in partnership with Microsoft, has been ranked amongst two of the top 10 Indian banks for secure and important notification.
• It has also entered into a multi-year partnership with Vodafone Idea, one of the largest deals in the c-pass industry globally, with the solution in February 2022. The Tanla platform will go live.
• There are also two new partnerships that will be announced soon in 2022, it is also in the final stages of launching its GTM which is a globally intelligent market strategy, so the growth potential for Tanla is not limited to India it will be global.
• We are not here for linear thinking. We are here for big opportunities, says Mr. Uday Reddy, Chairman and CEO of Tanla Platforms, My team is poised to be the fastest growing sea-pass company in the world, we are just getting started so you can understand the confidence level and growing respect for Tanla.
Tanla Platform Financial
Tanla Platforms Financials are as follows:
Tanla Platforms Financials
Increase in revenue
• If we look at the growth ratio, Tanla platforms revenue has increased from 432 crores in FY16 to 3001 crores by 21st December.
• Consistent and exponential growth in revenue over the last 5 years.
• The CAGR rate of growth is 40% which is exceptional.
Profit growth
• Tanla’s profit has increased from 7 crores in FY16 to 501 crores till 21st December.
• One-time decline in net profit in FY20 due to one-time adjustment in depreciation, CAGR growth, and profit is 110%, which is insane.
• Now you can see how the craziness of this company has grown in the last 5 years.
• This was mainly due to their innovative products using the latest technologies.
• The one-time fall in profit was only on account of higher depreciation otherwise operating profit in FY 20 was positive.
ROE and ROCE
• If you look at profitability, Tanla’s latest ROE is 24% and ROCE is 29.47%, which is good.
Debt to equity ratio
• It is a debt-free company, which is again great. So on debt to equity, I would rate it 10 out of 10.
• Now you actually find companies that are growing insanely with zero debt and at such high profitability, and that’s a recipe for a multi-bagger company. No wonder Tanla’s share price has risen more than 30 times in the last 3 years.
Shareholding pattern
• If we look at the shareholding pattern of Tanla, its promoters have continuously increased the stake from 35.06% to 43.74 percent in the company.
• FIIs have also increased their stake from zero to 13.46%.
• The most interesting aspect of the shareholding pattern is that the promoters have consistently increased the shareholding in the company, despite the huge jump in the share price.
• Tanla has announced its quarterly results and its revenue is up 35% year on year and profits are up 68% year on year. So Q3 has been a very good performance again.
Conclusion
• In this article, we discuss the basic principles of the tonal stage.
• Companies in the CPaaS (Communication Platform as a Service) business.
• It uses latest technologies like Blockchain, Cloud, Machine Learning etc. to provide services to both Enterprises and Telecom Operators including SMS OTP, Push Notification, Secure Messaging etc.
• Tanla is a leader in India’s CPaaS industry with 42% revenue share, and the industry is growing rapidly.
• With the acquisition Tanla is growing both organic and inorganic.
• Its financial position is looking strong with amazing growth and profitability and zero debt. The promoters of the company have continuously increased their stake in the company which shows the confidence of the promoter in the company.
• It is currently trading at a PE ratio of 35.75 around two P1300. Although a PE of 35.75 is generally considered high, it would command a premium, given the fact that Tonalla is moving fast.
• The stock has already recovered about 37% from its peak, and has a PEG ratio of less than 1 which makes it attractive even at current levels.
• Any downside in this stock will be a buying opportunity on the downside, but like I said, please do your research before investing your money. I hope you found this article useful.
Tarson products is an Indian labware company in the design, development, construction, and marketing of plastic lab equipment Company was established in 1983 in Kolkata, West Bengal.
This tarsons product is used for laboratories in research organizations, educational institutions, and pharmaceutical companies, Its products are divided into 3 categories
Contract Research Organization (“CRO”), clinical companies and hospitals.
The company has a huge portfolio of more than 1,700 SKU in 300 products.
Consumer consumption: Centrifuse wear, cryogenic wear, liquid handling, PCR consumables, Petri dishes, transfer pipettes, etc.
Reusables: Bottles, Carboy, Becar, Cylinder measuring, and tube racks.
Others: benchtop instruments such as vortex shakers, centrifuge pipettes, and others.
The company has many reputed organizations as customers educational institutions like the Indian Institute of Chemical Technology and the National Center for Biological Sciences
Doctor. Reddy’s laboratories and Annezer Biosyinses Cross like Sinnene International and Vida Clinical Research
Diagnostic companies with Molibio Diagnostics, Egappa Diagnostic, Metropolis Healthcare, Dr. Lal Path Labs, Mylab Life Solutions.
The company has 5 manufacturing facilities in West Bengal.
Tarsons products revenue distribution across its major segments for FY 2011:
It also has a wide distribution network of 130 plus distributors in India.
The top 9 plus distributors were responsible for more than 54% of sales for Tarson in FY2011.
In FY21, around 33% of revenue was from exports.
The company supplies its products to more than 40 countries.
Consumer Content: 62% Reusable: 34% Others: 4%
Tarson is the largest player in the Lab Equipment Industry in India.
Tarson had geographic revenue and distributor breakup in FY1 21
The company has performed well in the recent past with a Roe of 31% and a net profit margin of 29.4% in FY21.
The fundamental analysis of Tarsons Products Limited is as follows:
Tarsans product industry observation
The global healthcare market is expected to grow at a steady CAGR of 8.9% from 2025 to $15 trillion.
There will be a healthcare services market of approximately $12.3 trillion that will dwarf all other segments of the industry.
There is a lot of potential for the expansion of the healthcare sector in India.
Health care spending as a % of GDP in India was only 3.5% in 2018.
We can say that the healthcare sector in India has huge potential for growth.
The Indian healthcare market is expected to undergo a boom with a CAGR of 23% to reach a market size of $557 billion by 2025.
While the global laboratory equipment market is expected to grow at a steady CAGR of 4.9% till 2025.
The plastic lab equipment market is expected to grow at a rate of 10.5%, more than twice the market rate.
This will be due to the widespread acceptance and replacement of traditional glass appliances with plastic ones.
The overall market for plastic products is expected to grow from 46% to 67% in 2015 and 52% of the overall market at present.
This transition from glass to plastic is expected to reach 75% in India by 2025 from the current 52%.
The fastest CAGR for Plastics Lab Equipment is expected to be witnessed in India by 2025 with an estimated CAGR of 16%.
The key growth driver for the worldwide plastics lab equipment industry is:
The factors are–
The rise in lifestyle diseases and conditions has led to increased research and development.
Increase in outsourcing in replacement of glass pharma industry with plastics.
Covid-19 brought attention to healthcare due to its longer shelf life and recyclability.
This was an overview of this industry.
Competitors to Tarsan Products
Now let’s talk about the competitors of Tarson products.
On the above data, you can see that Tarson Products is one of the oldest companies among its competitors.
It is one of only a few companies that deal in consumable, reusable, PCR/cell culture.
It has its own manufacturing plant in India.
Company Financial
Now let’s talk about the financial position of the company.
In the chart above you can see that all the figures are in crores.
First, look at net worth. This figure increased from 248.71 crores in FY 2010 to 295.95 crore in FY21.
In total revenue, this figure increased from 180 crores to 234.29 crores.
This figure in profit after tax increased from 40.53 crores to 68.87 crores at the end of FY 2011.
Comparing Quarter 1 with FY 2011 and FY 2012, we can see an improvement here as well.
In total assets, this figure increased from 235.66 crores to 364.77 crores.
In total revenue, this figure increased from 43.57 crores to 71.13 crores.
This figure increased from 6.97 crores to 24.84 crores in profit after tax.
Significant Proportion of Tarson Products Compan
Important Ratios of Tarsan Products Company are as follows:
The net profit margin is 29.40%.
The operating profit margin is 40.58%.
13.43% per share.
The PE is 49.29.
Debt to equity is 0.356.
The current ratio is 1.86.
The 2-year sales CAGR is 12.62%.
2-year-old profit CAGR is 32.96%.
Pros and Cons of Tarsons products
Now we will talk about the pros and cons of investing in Tarson products.
Pros
Invest now in the pros first.
There are major opportunities for the rise of the healthcare industry, especially the diagnostics space and crams space.
The diagnostics space in India is untapped, while the CRAMS industry has a low-cost and highly skilled workforce in India.
Tarsons Products has been in this industry of manufacturing laboratory equipment for more than 3 decades and is the largest player in India with a manufacturing plant.
Thus, it has a brand advantage in India in this area.
The company has good export potential considering the low-cost manufacturing advantages.
The company will focus on ODM sales in mature markets such as the United States and the European Union.
The company will expand using branded sales in emerging markets such as South America and the Asia Pacific.
The largest share of sales falls on more than 60% of consumable products.
This is a category that demands constant demand for the industry as most of them are single or limited use.
So these were the advantages.
Cons
Now let’s talk about some negative things as well.
The company imports more than 75% of its raw materials and over 44% of its imports are from the European Union.
Its top 10 suppliers accounted for 76.8% of raw material requirements in Q1fy22.
Hence the company depends on its suppliers for its raw materials.
The loss of any major supplier would be very damaging to the company.
Raw material cost is a significant part of the overall cost at 31.6% of the total expenditure in FY2011.
Most raw materials are exported, so the price of a company’s raw materials can be negatively affected by inflation and foreign exchange volatility.
The company is threatened by environmental regulations that may limit the use or sale of plastic products in the future.
ROCE is a very important factor for creating wealth through capital investments and can include such things as a company’s marketable securities, production machinery, land, software, patents, and brand names.
How a company chooses to allocate its capital assets can have a direct bearing on its performance. In many cases, this can mean the difference between a company generating positive financial returns or losing money. Return on capital employed is a valuable tool for measuring this.
Understanding Return on Capital Employed
While companies use ROCE as a useful metric to gauge their performance, they are not the only ones who can take advantage of it. Analysts, shareholders, and potential investors all use ROCE as a reliable measure of corporate performance when analyzing a company for investment.
Return on capital employed is especially useful when comparing businesses in the same industry. It is best employed in conjunction with other performance measures rather than in isolation.
Return on capital employed is one of several profitability ratios used to evaluate a company’s performance. It is designed to show how efficiently a company uses its available capital by looking at the net profit generated with respect to each dollar of capital the company uses.
In addition to ROCE, companies may also review other key return ratios when analyzing their performance, such as return on assets (ROA), return on equity (ROE), and return on capital invested (ROIC).
You can find the earnings before interest and taxes (EBIT) on a company’s income statement. Some analysts use net profit instead of EBIT to calculate. You can calculate capital employed from a company’s balance sheet.
What ROCE can tell you
ROCE is a useful measure of financial efficiency because it measures profitability after factoring in the amount of capital used to create that level of profitability. Comparing ROCE with basic profit margin calculations can show the value of looking at the Return on capital employed.
For example, consider two companies, one with a 10% profit margin and the other with a 15% profit margin. The other company seems to be doing better; However, if the other company uses twice as much capital to generate its profit, it is actually a less financially efficient company because it is not maximizing its revenue.
A higher ROCE indicates that a higher percentage of the company’s value may eventually be returned to shareholders in the form of profits.
Is Return on Investment (ROI) the same as Return on Capital Employed?
ROI and ROCE are both financial metrics that determine how well a company uses its capital for operations and growth. ROCE is mainly used when comparing companies in the same industry, whereas ROI can be used with more flexibility. ROCE takes a specific time period, whereas ROI does not. ROCE mainly looks at how capital is used within a company whereas ROI looks at the return of investment.
What is the difference between capital employed and invested capital?
Invested capital is the level of capital that flows through a business. Capital employed is the total capital that a firm has. Capital employed is a more comprehensive number than the capital invested; Capital employed looks at total equity and debt financing minus short-term liabilities. The purpose of invested capital is to calculate the return of a business with respect to the capital that the business is currently using.
How do I Calculate Return On Capital Employed?
ROCE can be calculated by dividing earnings before interest and taxes (EBIT) by capital employed. It can also be calculated by dividing EBIT by the difference between total assets and current liabilities.
Bottom-line
Return on capital employed is a useful metric of financial performance and has proven particularly helpful in comparisons between companies engaged in capital-intensive industry sectors. It has gained a strong reputation as a benchmark financial tool for evaluating oil and gas companies.
However, no one performance metric is perfect, and ROCE is most effectively used in conjunction with other measures, such as return on equity (ROE). it’s is not the best valuation for companies with large, untapped cash reserves.
