A company is said to be ‘Fundamentally Strong’ when it has robust underlying operations. Those companies would be able to run their business even when the sector is facing unfavorable situations. Listed below are 2 of such fundamentally strong companies trading near their 52-week low numbers despite strong financials and profitability metrics.
Tata Consumer Products Limited
Tata Consumer Products Limited, the 2nd largest branded tea company in the world, functions to collaborate the principal food and beverage interests of the Tata Group under one roof. The Company’s portfolio of products includes tea, coffee, water, RTD, salt, pulses, spices, ready-to-cook and ready-to-eat offerings, breakfast cereals, snacks, and mini meals.
Its key beverage brands include Tata Tea, Tetley, Tata Coffee Grand, Tata Water Plus, Tata Gluco Plus, etc. Its ‘food’ portfolio includes brands such as Tata Sampann, Tata Salt, Tata Q, and Tata Soulfull.
Recently, the stock prices of the company have been falling and one of the major reasons for the same to occur is the demand volatility for its premium tea business and input cost inflations faced in the salt segment altogether.
The company’s stock closed today at around Rs 701 showing marginal down movements compared to the previous closing price of Rs 703.40. The stock is near its 52-week low of Rs 686.60. In the last six-month period, the stock has dipped about 9 percent ranging from Rs 767 to the current price levels.
The sales consistently increased in the past 4 quarters with the latest movement from Rs 3,363 crores in Q2 FY21-22 to Rs 3,475 crores in Q3 FY21-22. Moreover, the net profit figures, during the same timeframe, shifted from Rs 355 crores to Rs 370 crores.
Coming onto the profitability ratios, the company has reported healthy ROE and ROCE numbers with ROE moving from 7.02 percent during FY20-21 to 7.28 percent in FY21-22. ROCE numbers, during the same period, moved from 8.97 percent to 9.6 percent. The debt-to-equity ratio of the company has been reducing in the past 3 financial years from 0.09 in FY19-20 and fell down to 0.07 during FY21-22.
As per the latest shareholding pattern released by the company, promoters hold a 34.44 percent stake in the company. FIIs hold a considerable amount of stake in the company which is around 25.04 percent.
CE Info Systems Limited
CE Info Systems Limited is a data and technology products and platforms company providing platforms, products, application programming interfaces and solutions across a variety of software and IoT (Internet of Things) for the Indian market under the ‘MapmyIndia’ brand and under the ‘Mappls’ brand for the international markets.
The company has witnessed down movements today ahead of its annual results which will be declared on 22nd April 2023.
The company’s stock closed today at around Rs 1,007 showing marginal down movements compared to the previous closing price of Rs 1,009.60. The stock is near its 52-week low of Rs 989.10. In the last six-month period, the stock has dipped about 25 percent ranging from Rs 1,351 to the current price levels.
Having a quick walkthrough of the financials, the revenues shifted down from Rs 76 crores in Q2 to Rs 68 crores in Q3. Moreover, the PAT figures, during the same period, saw an up movement from Rs 25 crores to Rs 30 crores.
The profitability metrics exhibit mixed sentiments with ROE, on one hand, reducing from 32.7 percent in FY20-21 to 27.03 percent in FY21-22, and ROCE, on the other hand, improved during the same timeframe from 24.78 percent to 29.6 percent. The company sourced its funds involving the debt capital thus having a debt-to-equity ratio of 0.01 during FY21-22.
According to the data available for the March quarter, promoters hold a 53.31 percent stake in the company. FIIs, on the other hand, increased their stake from 5.5 percent in Q3 to 6.61 percent in Q4.
Written by Amit Madnani
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