These are the top 5 largest turnaround companies from last quarter

0 Comment

Companies that have the ability to improve their financial position are worth analysing. They are generally a good buy. Making a turnaround in terms of profits requires identification of problem areas, managing costs and technological changes. Looking at the recent consolidated corporate results, 18 companies have turned profitable in September 2017 quarter after suffering losses for the past 4 quarters (September 2016 to June 2017).  As many as  total of 11 of the 18 companies are small-caps with market cap less than Rs 500 crores. 6 companies are from mid-cap space with market cap ranging from Rs 500 crores to Rs 10000 crores and one company is the large cap with market cap greater than Rs 10000 crores. Let us look at the top 5 largest turnaround companies:Adani Power:  With power plants in Gujarat, Maharashtra, Rajasthan & Karnataka, the company claims to be the largest private power producer with an installed capacity of 10480 MW.  The company turned profitable in Sep 2017 due to increase in revenues. The receipts of interim relief from Haryana discoms helped to boost the revenues. Moreover, cost reduction due to a favourable currency movement & fall in short term loans helped the bottom-line. The net sales & operating profit grew by 11.3% & 37.4% respectively. The interest costs fell by over 3%.HMT: Diversified company with businesses in watches, tractors, printing machinery, metal forming presses, die casting & plastic processing machinery, CNC systems & bearings.  Increase in revenues & reduction in total expenditure helped the company in Sep 2017 quarter. Sales & other income grew by 7.4% & 63.3% respectively. Total expenditure & Interest income fell by 4.6% & 34% respectively. HEG: Graphite electrode player located in Madhya Pradesh with production capacity of 80000 MT per annum. The company turned profitable in Sep 2017 due to healthy capacity utilization & increase in realization. Its top-line grew by over 100% due to increase in graphite electrode prices. Its operating profit witnessed a prominent 777% growth with over 16% reduction in interest costs. Den Networks: A mass media & entertainment company with presence across 13 key states and 433 cities. It provides services including cable TV, over-the-top (OTT) entertainment, tele-commerce and broadband services. Cost optimisation and better collections helped company to generate profits in Sep 2017 quarter. Its revenue and operating profit grew by 20% & 144% respectively in Sep 2017.Nagarjuna Fertilizers & Chemicals:  The company is in the business of manufacturing & supplying plant nutrients. Although, the revenues have declined by over 6%, the company turned profitable due to significant jump in the other income. The other income grew by 268% in Sep 2017. Reduction in both total expenditure & interest costs also improved the bottom-line. Total expenditure fell by 6.9% and interest costs came down by 2.5%. Data source: ACE Equity. Analysis based on consolidated quarterly numbers.

Tags: , , , , , , , , , , , ,

Leave a Reply

Your email address will not be published. Required fields are marked *