Fundamental Analysis of Stocks

Coal India’s unmatched strategic relevance in securing India’s energy requirement and supporting economic growth makes it an attractive investment opportunity. And, after the recent market correction and sharp drop in Coal India share price, does it still offer value at current levels. Let’s check out. 

Overview of Coal India

Coal India is a state-owned world’s largest coal mining company. It produced 774 MT of coal in FY24, accounting for nearly 40% of primary commercial energy requirement. 

The company primarily operates through the long term coal supply contracts with companies and auctions in the free market. Due to its strong financial position and established track record of being profitable, the government has granted it the status of “Maharatna” enterprise. 

Because of the Maharatna status, it enjoys greater financial autonomy, operational freedom, and strategic flexibility. 

Coal India Management Team

Shri PM Prasad is the Chairman & Managing Director of Coal India. He has been with the company since 1984 and joined as an executive trainee with Western Coalfields Limited. He did M. Tech. in ‘Open-Cast Mining’ from Indian School of Mines (IIT- ISM), Dhanbad.

Shri Vinay Ranjan is the Director (Personnel & Industrial Relations) with extensive experience in Human Resource affairs including talent management, performance management, employee engagement, etc. 

Shri Debasish Nanda is the Director (Business Development) and has joined the company in July 2022. Prior to this, he was working as Executive Director (Gas) in Indian Oil Corporation, where he joined the company in 1988 as management trainee. Currently at CIL, Shri Nanda is responsible for leading the diversification portfolio at CIL including forward integration.

Shri Mukesh Choudhary is the Director (Marketing) from December 2022. Prior to joining CIL,  he was Deputy Director General, Department of Defence Production at the Ministry of Defence. Career wise, he is an Officer of Indian Ordnance Factory Services (IOFS) 1996 batch and Mechanical Engineering (Honours) graduate from Engineering College Kota. He also holds a Master of Financial Analysis (MFA) degree and a MBA degree.

Shri Mukesh Agrawal is the Director (Finance) and joined the company in Feb 2024. He is science graduate from University of Allahabad and a Member of the Institute of Cost Accountants of India. Earlier, he has worked with public sectors like ITI Limited, IRCON, NLC India. 

Coal India Shareholding Pattern

In the domestic institution segment, Mutual Funds hold 10.81% and LIC holds 9.74% stake in the company.

Coal India Financial Performance

Net Sales

In FY24, CIL reported 2.1% sales growth to ₹1.30 lakh crore from ₹1.27 lakh crore in FY23. 

And, in the first nine months of FY25- the company’s sales declined by 3% to ₹92,800 crore from ₹96,962 crore, reported for 9MFY24 period. 

EBITDA

In FY24, EBITDA growth was 8.5% to ₹51,793 crore from ₹47,722 crores in FY23. EBITDA Margin to net sales in FY24 was 39.74%. 

For the 9MFY25 period, the EBITDA Margin to Net Sales came in at 41.32%, from 40.61% recorded in the same period previous fiscal. 

Net Profit

In FY24, CIL recorded a 17.7% rise in net profit to ₹37,369 crores, from ₹31,723 crores in FY23.

And, in the first nine months of FY25, net profit declined by 11% to ₹25,710 crores from ₹28,839 crores reported in the same period last year. 

The net profit margin to net sales of the company rose to 28.67% in FY24, from 24.86% in FY23 and has consistently improved over the last five years. 

Period	FY20	FY21	FY22	FY23	FY24
Net Profit Margin (%)	18.69	15.36	17.28	24.86	28.67

Key Financial Metrics

Current Ratio: At the end of December 2024, the current ratio of the company was 1.72 times, slightly increasing from 1.70 times recorded the previous year. 

Debt Equity Ratio: The company has negligible debt in its book. At the end of December 2024, the debt to equity ratio of the company was 0.09 times.

Return on Capital Employed (ROCE): The metric shows how much the company is generating returns on equity and debt investment and is directly linked to the Coal India share price growth. In the last five years, CIL has improved its ROCE consistently from 16.14% in FY21 to 27.30% in FY24. 

Period	FY20	FY21	FY22	FY23	FY24
ROCE (%)	22.60	16.14	19.25	28.21	27.30

Coal India Share Price Analysis

In the recent market correction, Coal India share price has witnessed a sharp drop. As of 7th March 2025, Coal India share price has declined by close to 22% in the last six months, from ₹485 to ₹381. 

It made an all-time high level of  ₹543.55 on 26th August 2024. 

However, despite the correction, Coal India share price has given returns of 19% annually in the last five years.

Coal India has a consistent dividend paying track record. In the last three financial years, it paid ₹17 in FY22, ₹24.25 in FY23, ₹25.50 in FY24. 

The dividend payout ratio for the last three financial years was 60.35%, 47.05% and 42.02% respectively. 

At current Coal India share price of ₹381, the dividend yield ratio is 6.7%.

Coal India Share Price Valuation Score 

Earning Per Share (EPS)

The following is the last five years Earnings Per Share of Coal India:

Period	FY20	FY21	FY22	FY23	FY24	9MFY25
EPS (₹)	27.12	20.61	28.17	51.54	60.69	41.79

EPS of Coal India has increased from ₹27 in FY20 to ₹61 in FY24, which helped in the Coal India share price growth during the period. 

For the 9MFY25 period, the EPS came in at ₹41.69, which is lower from ₹46.78, recorded for the same period previous year. 

Know More:  SEBI Registered Investment Advisory |  Stock Investment Advisory

Price-to-Book VS Median Price-to-Book

At current Coal India share price of ₹381, the stock is trading at 2.4 times its book value and the 5 year median price-to-book value is 2.8, which indicates, the stock is trading at slight discount. 

Source: Screener (As on 7th March 2025)

Price-to-Equity VS Median PE

Coal India share price is trading at a PE of 6.83 and the 5 year median PE is 6.5, indicating it is neither trading at a discount or premium. 

Source: Screener (As on 7th March 2025)

Coal India Share Price Future Growth Potential 

Let’s first look at the operational metrics of Coal India. 

Flat Volume Growth in Coal India in FY25. The company has been consistently improving its coal production rate and has increased from 602 MT in FY20 to nearly 774 MT in FY24. 

However, the volume growth in FY25 looks subdued due to various operational challenges like inclement monsoon, rake unavailability for dispatch, and few technical challenges. For the full financial year, the company is expecting a production of 788 MT, revised from 838 MT set initially. 

Absence of volume growth can hit revenue and profitability growth metrics in the near term. 

Period	FY20	FY21	FY22	FY23	FY24	9MFY25
Volume (MT)	602.13	596.22	622.63	703.20	773.64	543.36 (+2%)

Coal India relies heavily on e-Auction to drive its revenue growth. Due to absence of strong demand and highest pit head inventory at 70 MT, auction prices have remained stable impacting earnings growth. 

Also, subdued demand from power sector due slow economic growth can also impact Coal India share price. 

Another major shift is happening is the drop in coal’s share in India’s power generation capacity. In the first quarter of 2024, the share of coal in India’s power generation capacity dropped below 50%. This is the first drop since 1960, as the government is moving rapidly to increase India’s renewable energy capacity. 

According to IEA, global coal demand is set to plateau through 2027 due to the massive expansion of renewables. And, India will also follow the trend. The global share of coal-fired power generation is expected to come down to 55% by 2030 and a complete phase-out by 2040. 

Diversification of Operations

The growth of renewable energy sources pose a significant challenge and growth of Coal India share price. To address the issue, the company has undertaken many diversification initiatives including:

• Coal to Chemicals and Fertilizers
• Entry to Renewable Energy 
• Surface Coal Gasification
• Critical Mineral Value Chain

With favorable returns metrics (ROCE), earnings growth (EPS), and favorable valuations, Coal India share price may offer long term growth potential. However, much of it will depend on its ability to improve its production rate. 

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Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as a recommendation or investment advice by Equentis – Research & Ranking. We will not be liable for any losses that may occur. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL & the certification from NISM in no way guarantee the performance of the intermediary or provide any assurance of returns to investors.

Union Bank is the fifth largest public sector bank of India with a customer base of over 21 crore Indians. In the consolidation drive, Andhra Bank and Corporation Bank were merged into Union Bank in April 2020. 

The bank’s business and income have more than tripled since then, helping Union Bank share price to rise more than 140% in the last five years, from ₹44.20 on 20 Feb 2020 to ₹107.6 on 17th Feb 2025. It made a high of ₹172.

Union Bank has one of the best asset quality among Indian public sector banks and has a strong growth potential in the long run. In this article, we do a fundamental analysis of Union Bank share price to have a better understanding of the bank’s standing. 

Overview of Union Bank of India

Union Bank of India is a leading public sector bank with its headquarter in Mumbai. The bank was established in 1919 and over years have diversified its offering to meet varied needs of its customers, ranging from individuals to large corporations. 

It offers personal banking, corporate banking, international banking, and treasury operations services through its 8,500+ domestic branches, 9,000+ ATMs, and 23,000+ business correspondents. 

As of 31st December 2024, the bank’s total business stood at ₹21.65 lakh crore, comprising ₹12.16 lakh crore in deposits and ₹9.5 lakh crore of advances. 

Union Bank of India Management Profile

Ms. A. Manimekhalai  is the CEO and Managing Director of Union Bank. She is a seasoned banker with over three decades of experience and started her career as an officer in Vijaya Bank in 1988. Prior joining Union Bank, Ms. Manimekhalai was Executive Director at Canara Bank overseeing strategic planning, credit related matters, financial inclusion, functioning regional rural banks, and others. She holds an MBA (Marketing) from Bangalore University, and a Diploma in Human Resource Management from Narsee Monjee Institute of Management Studies (NMIMS), Mumbai.

Shri P. K. Samal is the Chief Compliance Officer and has been appointed for a tenure for 3 years from June 2024. He is a certified chartered accountant and has over 21 years of experience in banking space. 

Shri Avinash Vasant Prabhu is the Chief Financial Officer of Union Bank and was appointed in November 2023 for a period of 3 years. He is a chartered accountant by profession and has more than 25 years of experience. Prior to joining Union Bank, he was CFO India for Deutsche Bank.

Shri Ashwini Kumar Choudhary is the group Chief Risk Officer with over 24 years of professional experience. He is a certified FRM from Global Associations of Risk Professionals. 

Union Bank of India Shareholding Pattern

Financial Performance

Net Interest Income (NII)

The bank’s net interest income reached ₹36,570 crores during FY24, which is around 11.6% higher compared to the previous financial year from ₹32,765 crores. 

In the April to December period (9MFY25), the bank’s NII reached ₹27,700 crores, which is around 2% higher at ₹27,134 crore recorded during the period in 9MFY24. The bank non-interest income rose 25.33% during the same period to ₹14,254 crores.

Net Profit 

From recording a loss of around ₹2,900 crores in FY20, the bank’s profitability metric has improved a lot. In FY24, net profit of the company reached ₹13,648 crores, from ₹8,433 crores in FY23, recording a growth of 62%. 

For the 9MFY25, the bank’s net profit increased by 25.77% to ₹13,002 crores from ₹10,338 crores recorded in 9MFY24. 

Key Financial Metrics

Net Interest Margin (NIM)

Net Interest Margin is like operating margin for banks and is calculated by interest paid from interest earned. In FY24, the NIM of Union Bank of India was 3.1%, improved by 3 basis points year-on-year. 

And for the 9MFY25 period, it was 2.94% and the bank has given guidance of 2.8 to 3% as NIM for FY25, on account of lower lending margin and high deposit cost. 

Gross Non Performing Asset (NPA)

Period	GNPA (%)
FY20	14.15
FY21	13.74
FY22	11.11
FY23	7.53
FY24	4.76
9MFY25	3.85

The bank has steadily improved its asset quality over the years. In FY24, the Gross Non Performing Asset (GNPA) of the bank improved to 4.76% from 7.53% in FY23. It further improved to 3.85% for the period ending in December 2024, indicating better asset and risk management to prevent slippages and loans from turning bad. 

Management is expecting the bank’s GNPA for FY25 to settle below 4%. 

Capital Adequacy Ratio (CAR)

Capital Adequacy Ratio- which indicates the bank’s financial strength and stability The overall CAR at the end of December is 16.72% against the minimum regulatory requirement of 12% for public sector banks. 

A higher CAR indicates that the bank is well insulated to absorb any shock like a spike in non performing assets.  

CASA Ratio

The Current Account Saving Account (CASA) Ratio, which indicates percentage of customer’s total deposit kept in low yielding current and savings accounts, is 33.43% at the end of December 2024. SBI, which is the leader, has a CASA of 39.20%. 

Cost of Deposits and Cost of Funds

The bank’s Cost of Funds for the 9MFY25 increased by 28 bps to 4.98%. And, the cost of deposit also increased to 5.5% for the same period from 5.15% recorded the previous year. Higher cost of funds and deposit, put a pressure on the profitability metrics of the bank. 

Union Bank Share Price Analysis

After reaching a high of ₹172 on 3rd June 2024, Union Bank Share Price is on a downtrend, and has corrected by more than 30%. This correction may be due to the broader weakness in the market and macro slowdown. 

Speaking about the dividend payouts, Union Bank has a consistent dividend payout history has one of the highest dividend yields across public sector banks. 

The bank paid ₹1.9 in 2022, ₹3 in 2023, and 3.60 in 2024 as dividend. At the current market price of ₹114, the bank has a dividend yield of 3.13%. 

Know More:  SEBI Registered investment advisory |  Stock investment advisory

Key Valuation Metrics

Earning Per Share (EPS)

The following is the EPS of Union Bank Share Price of last 5 year:

FY20	– ₹12.49
FY21	₹4.54
FY22	₹7.73
FY23	₹12.34
FY24	₹18.95
9MFY25	₹17.05

The bank has considerably improved its Earning Per Share over the last five years from negative ₹12.49 per share to ₹18.95 per share, which aided in the share price rise. 

Return on Assets

The bank’s Return on Assets (ROA) in FY24 improved from 0.69% in FY23 to 1.03% and for the 9MFY25, the bank’s ROA further improved to 1.24%. 

Price-to-Book VS Median Price-to-Book

The price-to-book value of Union Bank share price is 0.9 and the 5 year Median Price-to-Book is 0.5, meaning it is trading slightly higher than its book value, and also below book value. It can be considered fairly valued for this metric. 

Union Bank Share Price Future Growth Potential

Although the financials of the bank look steady with improving profits, NPA ratio, net interest margin, the bank may face operational risks.

Union Bank’s credit growth for the 9MFY25, grew by 5.94%, lower by the management’s expectation of 11%. And, the deposits growth was 3.76%. Lower deposit growth may impact the bank’s ability to aggressively pursue credit growth and may have to raise funds from the market to fund the growth, which can impact the cost of funds for the bank. 

Another key concern for the bank will be a period of flat growth. For 9MFY25, the bank’s Net Interest Income growth was flat, which again can impact the growth of Union Bank share price. 

The bank’s CASA ratio is also on a declining trend, which again can increase the cost of funds and impact profitability. 

Going forward, the bank’s credit and deposit growth should be closely analyzed to understand the future growth potential of Union Bank share price and also compare the metrics with State Bank of India. 

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Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as a recommendation or investment advice by Equentis – Research & Ranking. We will not be liable for any losses that may occur. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL & certification from NISM in no way guarantee the performance of the intermediary or provide any assurance of returns to investors.

FAQ

Once a penny stock, UCO Bank share price has seen a major turnaround. In the last three years, the share price rose from ₹11.50 on March 7th 2022 to ₹39 on 21st Feb 2025. It made an all-time high of ₹68.40 on Feb 7th, 2024. 

It was the first bank in India, conceived and backed by Indian capital and management. Over the decades, the organizational structure of the bank underwent multiple changes. UCO Bank is ranked 10th largest among public sector banks in India. 

In this article, we will do a fundamental analysis of UCO Bank share price and evaluate its future growth potential. Let’s start.

Overview of UCO Bank

The idea of the bank was conceived of by Indian industrialist Mr G.D. Birla during the “Quit India” movement in 1942 and came into reality on 6th January 1943 as United Commercial Bank. 

Mr. G.D. Birla was the first Chairman of the bank, which was registered and headquartered in Kolkata. Post-independence, the bank was nationalized in 1969, and 100% ownership of the bank was transferred to Govt. of India. Subsequently, the bank’s name was changed to UCO Bank.

Currently, the bank operates through a network of over 3,200 branches across India, three overseas branches, and over 2,000 ATMs. 

At the end of FY24, the bank’s total business was ₹4.5 lakh crore, comprising ₹2.63 lakh crore in deposits and ₹1.86 lakh crore in advances. 

UCO Bank Management Profile

Shri Ashwani Kumar is the MD and CEO of UCO Bank and is a Chartered Accountant by profession. He has worked in multiple public sector banks including Bank of Baroda, Corporation Bank, Punjab National Bank, Oriental Bank of Commerce, and India Bank in various divisions and roles. 

Shri Rajendra Kumar Saboo is the Executive Director of UCO Bank. He started his career as a probationary officer in the erstwhile Oriental Bank of Commerce in the year 1994. Shri Saboo is a graduate of Commerce and holds an MBA in Banking & Finance.

Shri Vijaykumar Nivrutti Kamble, is the Executive Director. A seasoned banker with a career spanning over 33 years, Shri Kamble started his career as an Agriculture Field Officer at Bank of Maharastra and before joining UCO Bank, he was holding the position of General Bank at Bank of Maharastra. 

Shri Sujoy Dutta is the Chief Financial Officer of the bank and a qualified Chartered Accountant. He joined the bank in 2004 and rose through the ranks undertaking various roles and responsibilities. 

UCO Bank Shareholding Pattern

The bank has high promoter shareholding, with little stake held by domestic institutions and fairly any foreign institutions have invested in the bank. 

UCO Bank’s Financial Performance

Net Interest Income (NII)

UCO Bank’s net interest income in FY24 was ₹8,101 crores during FY24, registering a growth of 10.32% compared to the previous financial year from ₹7,343 crores. 

In the April to December period (9MFY25), the bank’s NII reached ₹6,932 crores, which is 17.21% higher compared to the previous year during the same period at ₹5,914 crores in 9MFY24. 

Non-Interest Income

The bank’s non-interest income for FY24 increased by 30.18% to ₹3,266 crore compared to the previous financial year at ₹2,508 crore.

And, in the first nine months of FY25, the bank’s non-interest income rose by 40.78% to ₹3,014 crore from ₹2,141 crore. 

Net Profit

UCO Bank in FY21 marked a significant turnaround in operations by starting to report net profit after a prolonged period of making losses. 

In FY24, the bank’s net profit declined by 11.2% to ₹1,654 crores from ₹1,862 crores in FY23.

And, for 9MFY25, the bank reported a significant growth in net profit to ₹1,793 crores, an increase of nearly 59% from ₹1,128 crores recorded in the same period the previous year. 

Key Financial Metrics

Net Interest Margin (NIM)

Period	FY20	FY21	FY22	FY23	FY24	9MFY25
NIM (%)	2.44	2.58	2.81	2.87	2.92	3.12

Net Interest Margin, the operating margin for a bank, has improved consistently over the years. In FY25, the bank’s NIM was 2.92%, and for the period 9MFY25, it was 3.12%. 

Gross Non-Performing Asset (GNPA)

Period	FY20	FY21	FY22	FY23	FY24	9MFY25
GNPA (%)	16.77	9.59	7.89	4.78	3.46	2.91

The bank’s increased focus on retail loan portfolio and active credit risk management and monitoring has helped to lower its non-performing assets. From 16.77% of the total loan book turning bad to 2.91% at the end of December 2024, the bank has significantly improved its overall asset quality, aiding in improving its profitability. 

Capital Adequacy Ratio (CAR)

Period	FY20	FY21	FY22	FY23	FY24	9MFY25
CAR (%)	11.70	13.74	13.74	16.51	16.98	16.25

The bank’s capital-to-risk weighted ratio indicates the bank’s ability to absorb losses if the bad loans rise. UCO Bank has improved its CAR over the years and is on par with leading public sector banks. 

CASA Ratio

This ratio shows how much percentage of the total deposits is there is low yielding savings and current account.  At the end of FY24, the bank’s domestic CASA ratio is 39.25%, and at the end of December 2024, it is 37.97%. 

Cost of Funds

The bank’s cost of funds in FY24 increased to 4.63% from 3.86% in FY23, indicating the bank is expending more to arrange funds and use them for lending purposes. 

At the end of December 2024, the cost of funds further increased to 4.75%. 

UCO Bank Share Price Analysis

UCO Bank share price has been on a down-trend for the last one year and also the broad-based weakness in the market is resulting in stock going further down. As of 21st Feb 2024, the UCO Bank share price fell over 35% last year. 

Source: tradingview

Regarding dividend payments, the bank resumed paying dividends after a gap of 8 years to shareholders in FY24. The bank paid ₹0.28 per share as dividends to shareholders. 

Know More:  SEBI Registered investment advisory |  Stock investment advisory

UCO Bank Shar Price Valuation Metrics

Earning Per Share (EPS)

Period	FY20	FY21	FY22	FY23	FY24	9MFY25
EPS (₹)	-3.10	0.17	0.8	1.56	1.38	1.50

In the last five financial years, the EPS growth of UCO Bank has been consistent, but in FY24, the bank marked a slight decline. However, at the end 9MFY25, the bank’s EPS growth surpassed the previous year’s level. 

Return on Assets (ROA)

Period	FY20	FY21	FY22	FY23	FY24	9MFY25
ROA (%)	-0.96	0.06	0.34	0.62	0.56	0.75

UCO Bank’s Return on Assets (ROA) is lower than 1% for all periods in the last five years. 

Price-to-Book VS Median Price-to-Book

Source: Screener

At the current market price of UCO Bank share price (₹38.6), the price-to-book value (₹22.9) is 1.6, and the 5-year Median Price-to-Book is 0.7, trading higher than its historical averages.

UCO Bank Share Price What’s Next

UCO Bank share price is struggling due to broader weakness in the market and other market challenges.

One of the major concerns in the Indian banking sector is the lower deposit growth rate compared to the credit growth rate. In the December 2024 quarter, UCO Bank’s deposit growth rate was 9.36%, while the credit growth rate was 16.44%. 

Failure to attract a higher deposit growth rate could increase the bank’s cost of funds, which could impact profitability. In the long term, UCO Bank’s share price growth will depend on its ability to improve its Return on Assets, NPA, and profitability metrics. To comply with SEBI’s minimum public shareholder norm of 75%, the government will bring ₹2000 crore QIP in Q4FY25. 

Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as a recommendation or investment advice by Equentis – Research & Ranking. We will not be liable for any losses that may occur. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL & certification from NISM in no way guarantee the performance of the intermediary or provide any assurance of returns to investors.

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FAQs

Many know Voltas as a leading room air conditioner manufacturer, but only in India. However, it is a big player in the industrial and commercial cooling segment in domestic and international geographies. One of the prime international projects was installing an air conditioning system in the world’s tallest building, Burj Khalifa. It shows the company’s prowess in executing challenging projects, driving value for all stakeholders.

Now, speaking about Voltas share price, it has given steady returns to its shareholders. But, one of the major concerns of investors in the market is, the stock has failed to outperform the broader market over time.

As of 31st Jan 2025, Nifty 500 has given an annualized total return of 18.18% in the last 5 years, while Voltas share price delivered 13% annualized return during the same period. Will Voltas reverse the trend in the near term and what is the future growth potential of Voltas share price, we will do a deep dive on the fundamentals. Let’s start. 

Voltas Business Overview

Voltas Limited was established in 1954 and was a collaboration between Tata Group and Volkart Brothers. Currently, Voltas is the largest room air conditioning company in India. The company recently diversified other ranges of cooling and home appliances marketed under the Voltas Beko brand. It sells refrigerators, water dispensers, microwaves, water heaters, washing machines, coolers, and AC stabilizers. 

Voltas has divided its business into three segments:

• Unitary Cooling Products: Under this segment, the sales and services of cooling appliances and cold storage products are made.  
• Electro-Mechanical Projects and Services: Under this segment, the company houses its Electro-Mechanical Projects, Water Solutions Projects, and Electrical and Solar.

• Engineering Products and Services: This segment includes the sale of Textile Machinery and Mining & Construction equipment. 

Voltas Management Team

The following are the key management personnel of Voltas Limited:

Mr Pradeep Bakshi is currently the Managing Director & CEO. His term expires in August 2025, and he has been leading the company for over 20 years. 

Mr. Mukundan C.P. Menon is the Executive Director and Head of the room Air Conditioner Business. He will take over the Managing Director & CEO role from Mr Pradeep Bakshi in September 2025. Earlier, he was with Blue Star, holding the position of President and Chief Operating Officer, and has over 37 years of management experience. Mr. Menon has done B. Tech in Mechanical Engineering, Graduate Diploma in Management, along with Executive Management programs from IIM and Leadership Excellence Program from INSEAD, France. of Management) and a Leadership Excellence program from INSEAD, France.

Mr. Jitender Pal Verma is the Chief Financial Officer of Voltas and is a qualified Chartered Accountant with over 24 years of experience. Prior to joining Voltas in 2021, he was the senior Executive Vice President and Group CFO of Thoresen Thai Agencies Public Ltd Company, Thailand.

Shareholding Pattern

.Tata Sons is the promoter, holding nearly 30% stake in the company. Mutual Fund houses are the company’s second-largest stakeholder, cumulatively holding nearly 21% stake, followed by insurance companies, including LIC, HDFC Life, ICICI Life, and SBI Life, owning 9.59% of the company. 

Financial Performance

Revenue from Operations 

In FY24, Voltas’ revenue from operations increased by 32% to  ₹12,407 crores, compared to ₹ 9,399 crores in the previous financial year.  During the financial year, Voltas became the first-ever brand to sell 2 million AC units, recording a volume growth of around 35%. 

Looking at the segment-wise performance, Unitary Cooling Products contributed more than 60% to the company’s total revenue. For the 9MFY25 (April to December 2025), the company’s revenue increased to ₹10,645 crores from ₹8,278 crores in the same period of the previous financial year, an increase of 28.5%. 

Operating Profit

Despite the company’s revenue rise, the operating profit has declined year after year. In FY24, the company’s operating profit declined nearly 12% from ₹551 crores in FY23 to ₹486 crore.

Net Profit

In FY24, the company’s net profit rose from ₹136 crore in FY23 to ₹248 crore.  For the 9MFY25 (April to December 2025), the company’s net profit increased to ₹598 crores from ₹137 crores in the same period of the previous financial year, an increase of more than 330%. 

Key Financial Metrics

Current Ratio: The company’s current ratio declined marginally to 1.45 times in FY24 from 1.44 times in FY23. 

Debt-to-equity Ratio: The company’s debt-to-equity is favorable and is steady at 0.05 times, which indicates the company has low debt in its books. 

Inventory Turnover Ratio: This ratio shows how many times a company’s inventory is sold and replaced over a specific period. In FY24, the inventory turnover ratio rose to 3.64 times from 3.33 times in FY23. It was 2.48 times in March 2021. 

Return on Equity (ROE): In FY24, the ROE of the company was at a lower single digit at 8%.

Return on Capital Employed (ROCE): The ROCE of the company improved to 10% in FY24/

Voltas Share Price Analysis

In the last 5 years, Voltas share price has given returns of approximately 80%, rising from ₹688 to ₹1,211, and making an all-time high of ₹1,946. The stock underperformed significantly between 2022 and 2024, compared to the broader market, because of the declining earnings growth.

Source: Tradingview

Voltas has a consistent dividend payment track record and has paid more than 70% of its net profit as dividends to shareholders. In the last three years, it paid ₹5.5 in 2022, ₹4.25 in 2023, and ₹5.5 in 2024 as dividends. 

Free Cash Flow

Free cash flow is an important metric to check because it provides a clear picture of the company’s cash holdings, allowing investors to assess its financial health, ability to weather challenging business environments, and growth potential. 

Free cash flow is the cash left after subtracting Capital Expenditure from Cash from Operating Activity. 

In FY24, the net cash flow generated from operating activity was ₹761 crores. The capital expenditure in the form of the purchase of property, plant, and equipment was ₹293 crores. So, the free cash flow comes to nearly ₹468 crores. 

In FY23, the company’s free cash flow was negative at ₹21 crores. It shows the company’s improved cash-generating ability, which may enhance its growth potential. 

Voltas Share Price Valuation Score

Earning Per Share (EPS)

The following is the last 5 years EPS of Voltas Limited:

FY20	₹15.63
FY21	₹15.87
FY22	₹15.23
FY23	₹4.08
FY24	₹7.62
9MFY25	₹18.4

In FY23, the company’s EPS deteriorated significantly, reducing from ₹15.23 to ₹4.08, which resulted in Volta’s share price underperforming. The company has improved its EPS growth significantly, and for the 9MFY25, it has touched ₹18.4. 

Price-to-Book vs. Median Price-to-Book

The price-to-book value of Voltas share price is 6.4, and the 5-year Median Price-to-Book is 6.1, meaning it is trading slightly higher than its book value and can be considered fairly valued for this metric. 

Price-to-Equity VS Median PE

The current PE ratio of Voltas is 56.7, meaning investors are paying 56.7 times for every ₹1 of earnings. And the 5-year median PE is 71.9, which indicates the stock is trading at a lower valuation than historical PE levels. 

Voltas Share Price What’s Next

Analysing the financial performance and other key metrics of Voltas share price, here are the following observations:

• The company has come out of a period of flat growth, which it witnessed between FY20 and FY23. It may post strong revenue growth in FY25, keeping the strong momentum of the first nine months. The company’s inventory turnover ratio has improved significantly, from 2.48 times in March 2021 to 3.64 times in March 2024, indicating it sells more goods in a given period. The revenue growth is backed by volume growth.
• The company’s free cash flow levels have increased, which may help it to undertake aggressive marketing and growth plans. Speaking about valuations, the stock is trading at a lower valuation compared to its historical averages, and the company’s EPS has also improved significantly.
• Voltas has established leadership in Room Air Conditioners in India. The home appliance brand of Voltas Beko has emerged as the fastest-growing, durable Indian consumer brand. It has sold over 5 million household appliances in the last 5 years and has become one of the top three players in the semi-automatic washing machine category.

Some of the key concerns in Voltas share price growth are:

The company’s operating profit is declining year-over-year, meaning it makes less profit on every product it sells. The Return on Equity and Return on Capital Employed by Voltas at the end of March 2024 were 8% and 10%, respectively. However, it has improved over the previous year. Meanwhile, its peers, Blue Star, have better ROE and ROCE metrics. 

FAQs

Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as a recommendation or investment advice by Equentis – Research & Ranking. We will not be liable for any losses that may occur. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL & certification from NISM in no way guarantee the performance of the intermediary or provide any assurance of returns to investors.

Want to understand the fundamental analysis for Reliance Power? In 2008, Reliance Power made history by launching the largest IPO in the Indian market. The issue size was ₹11,500 crores and was oversubscribed approximately 70 times. 

Despite high optimism, the stock debuted at 17% discount. 

At the time, the company had no significant business operations and just recorded a mere ₹2.2 crores revenue in FY07. The plan was to utilize the IPO proceeds for the construction and development of the new power projects and build the business. 

However, onset of global financial crisis in 2008, regulatory hurdles, and market manipulation concerns resulted in the company’s share price to nosedive. 

Now, fast forward to 2024, the company is again making headlines. Reliance Power share price has given returns of up to 100% in the last one year. So, what’s happening in Reliance Power share price?

So, in this article, we will do a deep dive on the company’s fundamentals and check out its future growth potential. Let’s start. 

What Does Reliance Power Do?

Reliance Power is an energy generation company involved in the development, construction, and operation of power projects. The company has close to 6000 MW of operational power generation assets with diverse energy projects including coal-fired power plants and hydroelectricity projects located in Arunachal Pradesh and Himachal Pradesh. One of their significant projects is the 3,960 MW Sasan Ultra Mega Power Project in Madhya Pradesh

Recently, the company diversified into solar and wind energy projects. Reliance Power has a portfolio of 45 MW of wind energy and 140 MW of solar energy projects.

Reliance Power Management Team

Shri Anil Dhirubhai Ambani is the Chairman of Reliance Power and the Reliance ADA Group. 

Shri Ashok Kumar Pal is the Chief Financial Officer and was also appointed as the manager of the company. He is a qualified chartered accountant with more than 23 years of experience in handling accounts, finance, taxation, and other statutory compliance requirements. 

Smt. Ramandeep Kaur is the Company Secretary and Compliance Officer. She is also appointed as a key management personnel having more than 23 years of experience in secretarial matters with expertise in business strategy, business and corporate structuring, corporate actions. 

Reliance Power Shareholding Pattern

In the domestic institution segment, LIC holds 2.56% stake in the company, and retail shareholders holding almost half of the company with 49.85% stake. 

Reliance Power Financial Performance

Revenue From Operations

The revenue growth has been flat in the last five years, as you can see in the table below. In FY24, the revenue from operations of the company rose 5% to ₹7,893 crores from ₹7,514 crores in FY23.

And, in the first half of FY25, revenue from operations declined by 5% to ₹3,752 crores from ₹3,952 crores reported in the same period last year. 

Net Loss

Reliance Power is consistently reporting losses in its operations and in FY24, the losses increased by over 5 times to ₹2,068 crores from ₹403 crores in FY23. 

However, in the first half of FY25, the company reported a net profit of ₹2,780 crores crores against a loss of ₹534 crores reported in the same period the previous year. The profit during the period is due to an one-time exceptional gains of ₹3,230 crores on account of a deconsolidation of a subsidiary. 

Key Financial Ratios

Current Ratio: The current ratio of the company in FY24 was steady at 0.3 times. It indicates that the company’s current assets are insufficient to cover the short term liabilities. 

Debt-to-equity Ratio: The company’s debt to equity ratio improved marginally to 1.6 times in FY24, compared to 1.8 times in FY23. 

The net debt of the company reduced from ₹5,391.7 crores in FY23 to ₹4,200 crores in FY24. 

Debt Service Coverage ratio: The company’s debt service coverage ratio improved to 0.32 times in FY24 from 0.15 times in FY23. 

Operating Margin: Operationally, Reliance Power is making profits and in FY24, its operating profit margin was 15%. However, it declined from 25% in FY23. 

Reliance Power Share Price Analysis

In the last 5 years, Reliance Power share price has shed the tag of being a penny stock and rose by more than 1300%, from ₹3.3 to ₹46.60. Its 52-week high level is ₹54.25. 

Reliance Power paid zero dividend to its shareholders since it is listed in the stock market. 

The rise in Reliance Power share price due to multiple factors that will aid in improving its operational efficiency. Some of the key factors include:

• Raised ₹1,525 crore in October 2024 through a preferential allotment of equity shares from qualified investors to support business expansion and reduce debt.
  

• Settled debt-related disputes worth Rs 3,872.04 crore with CFM Asset Reconstruction related to Vidarbha Industries Power Ltd, thus improving the company’s financial stability.
  
• Signed a strategic deal to transfer the development rights of its proposed 1,200 MW Kalai-II hydro-electric project in Arunachal Pradesh to THDC for Rs 128.39 crore, which attracted significant investor attention.
  
• General bullish sentiment in the market towards power stocks, driven by tariff hikes in the power sector. 

The normal valuation metrics will not apply to Reliance Power, since it is a loss-making enterprise. For investors, the key is to look at the growth in earnings in the next few quarters. 

Reliance Power Share Price Future Growth Outlook

Debt restructuring, diversifying into renewable energy projects, and general bullish sentiment in power stocks has led to rise in the Reliance Power share price. But, the management is still facing significant challenges in improving the fundamentals of the company. 

The failure of Reliance Power to emerge as a top power company in India is due to many factors like unrealistic expectations and expensive valuation of the company at the time of IPO, overambitious projects, underplayed fuel supply challenges resulted in power plants going idle, high debt levels, regulatory hurdles, and erosion of credibility in the market. 

In recent months, the management of the company has shown strong intent to turnaround the company, but it needs to improve its operational efficiency and improve its earnings. The company’s ability to navigate the challenges and capitalize on growth opportunities will be crucial for its long-term success.

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Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as a recommendation or investment advice by Equentis – Research & Ranking. We will not be liable for any losses that may occur. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL & the certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors.

Want to understand the fundamental analysis of ONGC? Read on. ONGC is a leading oil exploration company in India but is struggling in the stock market. In the last 10 years, its share price has returned 1% annually to investors, but it is currently trading below its book value. So, can ONGC’s share price turn around and grow multi-fold? What is its future growth potential?

This article looks into the fundamentals of ONGC’s share price.

What Does ONGC Do?

Oil and Natural Gas Corporation (ONGC) is India’s largest oil & gas exploration and production company with Maharatna status. The company is responsible for over 70% of India’s crude oil and 84% of natural gas production. 

ONGC also has a strong international presence through its subsidiary, ONGC Videsh, which has projects in multiple countries. Through its subsidiaries, ONGC is present across all the value chains of hydrocarbons, including marketing, refinery, LNG, fuel transportation, etc. ONGC holds a 54.9% stake in Hindustan Petroleum. 

ONGC Management Team

Mr. Arun Kumar Singh is the Chairman and CEO of ONGC and the ONGC group of companies. He assumed his role on 7 December 2022 and has a three-year tenure. Mr. Singh has over 37 years of experience in the oil and gas sector and was previously the CMD of Bharat Petroleum. 

Mr. Om Prakash Singh is the Director (Technology & Field Services) and a mechanical engineer. He has over 36 years of experience in Indian oil and gas exploration and is an expert in deepwater drilling projects in India and abroad. Mr. Singh also chairs various Boards of ONGC subsidiaries. 

Mr. Pankaj Kumar is the Director (Production) and has over 36 years of experience across ONGC’s business functions. He holds a B.Tech in Chemical Engineering from IIT Roorkee and a Master’s in Process Engineering & Plant Design from IIT Delhi. 

Ms. Susma Rawat is the Director (Exploration), an industry veteran with over 34 years of experience. She heads the ONGC Carbon Management and Sustainability Group and is also a member of various inter-ministerial committees of NITI Aayog. 

Mr. Vivek Chandrakant Tongaonkar is the Director of Finance and CFO. He has 37 years of expertise in various roles within the energy industry. He joined ONGC in March 1987 as an Assistant Executive Engineer (Electrical) after graduating from the College of Engineering in Pune. After completing an MBA (Finance) program at Symbiosis Institute of Business Management in Pune, he switched to ONGC’s Finance department. 

Shareholding Pattern

In the Domestic Institution segment, mutual funds hold a 7.94% stake in the company, and LIC holds a 9.29% stake. 

Financials Performance

Total Revenue

In FY24, ONGC group posted a total revenue of ₹6,55,259 crores, lower by 5.4% compared to the previous financial year at ₹6,92,903 crores. 

And, in the first half of FY25, total income increased by 4.63% to ₹333,359 crores from ₹318,584 crores reported in the same period last year. 

EBITDA

In FY24, EBITDA rose by nearly 35% to ₹1,15,057 crore from ₹85,320.8 crore in FY23. 

Profit After Tax

In FY24, ONGC’s net profit increased by 67.7% to ₹57,101 crores from ₹34,047 crores in FY23.

In the first half of FY25, net profit declined by 41.5% to ₹19,688.6 crores from ₹33,665.89 crores reported in the same period the previous year.

The company’s operational and net profit margins were 41.25% and 29.28%, respectively, in FY24.

Key Financial Ratios

• Current Ratio: The company’s current ratio improved to 1.58 times in FY24 from 1.29 times in FY23. 
• Debt-to-equity Ratio: The company has no debt in its books, so its debt-to-equity ratio is close to zero. 
• Return on Equity (ROE): The company’s ROE declined by 12.5% to 14% in FY24 from 16% in FY23. 
• Return on Capital Employed (ROCE): The company’s ROCE declined to 30.60% in FY24 from 39.82% in FY23. 

ONGC Fundamental Analysis

In the last five years, ONGC’s share price has traded sideways with occasional price spikes, failing to deliver meaningful returns to its investors.

ONGC share price reached an all-time high of ₹345 in July 2024, from roughly ₹126 on December 13, 2019. Since then, it has traded with a downward bias.

Being a state-owned and profitable company, ONGC consistently pays dividends to its shareholders, sometimes paying more than 50% of its net profits as dividends. 

In the last three financial years, the company has paid ₹10.5 in FY22, ₹11.25 in FY23, and ₹12.25 in FY24 as dividends to shareholders. At a current market price of ₹260 per share, the dividend yield is 4.71%. 

ONGC Share Price Valuation Score

Earning Per Share (EPS)

The following is the last five years Earnings Per Share of ONGC:

FY20	₹8.59
FY21	₹12.96
FY22	₹36.19
FY23	₹29.18
FY24	₹39.13

The company’s EPS growth has been inconsistent, and in recent financial years, it has moderated. It is important to note that a company’s share price rise is driven by its earnings growth.

Price-to-Book VS Median Price-to-Book

ONGC’s share price is currently 0.9, trading below its book value. The 5-year median price-to-book value is 0.7, which indicates that the stock has historically traded below its book value.

Price-to-Equity VS Median PE

The current PE ratio is 7.85, meaning investors are paying 7.85 times for every ₹1 of earnings. Looking at the historical averages, ONGC 5 year median PE is 5.7. It indicates that the company shares trade at a lower valuation than its long-term averages. 

*Note: While stocks with a lower PE may look attractive initially, they indicate that investors are not ready to value the company higher because of its limited growth potential. If you look at all high-growth companies, such as Trent and Zomato, the valuation of them is expensive as they grow at a higher rate than the market, and investors expect to make more money in such stocks.

ONGC Share Price What’s Next

The company’s primary business activity is crude oil exploration and production, and its ability to expand depends on the successful discovery of oil and gas basins. For a very long time, the company has been unable to make major oil and gas discoveries, which has impacted its crude oil production capacity. Supply is depleting from its existing wells.

The table above shows that the company’s crude oil and natural gas production has consistently declined in the last five years.

In addition, the company’s proven oil reserves have also declined. In its FY24 annual report, the company stated that there is a natural decline in western offshore oil fields. It will focus on production enhancement by aiming to develop the Eastern Offshore Asset (EOA) early and gradually open wells by FY25.

Until new game-changing discoveries are made, the company plans to sustain current supply levels by effectively and efficiently managing existing oil fields. 

As part of its diversification strategy and to improve its financials, ONGC is focusing on developing its petrochemical business, converting crude oil directly to high-value chemical products.

This Maharatna is also diversifying into renewable energy. By 2030, it will invest close to ₹10,000 crores in establishing 5GW of renewable energy capacity, including solar, wind, biogas, and pump storage projects. On the capex front, ONGC expects to invest between ₹ 33,000 crores and 35,000 crores in FY25, focusing on developing and redeveloping oil and gas fields.

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Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as a recommendation or investment advice by Equentis – Research & Ranking. We will not be liable for any losses that may occur. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL & the certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors.

FAQ

Want to know about the fundamental analysis of JP Power? Read on. Jaiprakash Power Ventures Ltd, additionally referred to as JP Power Ventures, is part of the Jaypee Group. Following several years of repeated losses, the company has returned to profitability, with strong earnings growth. JP Power share price has also shed the image of being a penny stock, and investors are showing more interest in the company. In this article, we will do a fundamental analysis of JP Power’s share price and evaluate its long-term growth prospects. 

Let’s start. 

What Does JP Power Ventures Do?

JP Power Ventures was incorporated on December 21, 1994 and is a part of the Jaypee Group, a diversified infrastructure conglomerate with interests in civil engineering, construction, cement, power, and real estate.

JP Power Ventures operates both thermal and hydropower plants and has aggregate power generation capacity of 2,200 MW. 

Some of the notable projects of the company include 400 MW Vishnuprayag hydroelectric project, 500MW Bina thermal power plant, 2×660 MW Nigrie super thermal power project in Madhya Pradesh.

It has also implemented 1091 MW Karcham Wangtoo hydroelectric project, which is now owned and operated by JSW Energy, 1980 MW Bara Thermal Power Plant, which is now owned and operated by Tata Power, and many others.

The company is also involved in the business of setting up of transmission lines, coal mining and cement grinding plants to set up power projects and to carry on the business of generating electricity.

JP Power Management Team

Shri Manoj Gaur serves as the Chairman (Non-Executive) of the company’s Board. He is an established name in the Indian real estate business, serving as Chairman and Managing Director of Gaurs Group as well as Chairman of CREDAI’s Affordable Housing Committee (National).

Shri Suren Jain is the Managing Director and CEO of JP Power. He has been with the JP Group since 1993 and has held several high management positions in the group’s company. He has served as the Managing Director of JP Power Ventures since 2007. Shri Suren Jain received his BE degree in Production Engineering from Jawaharlal Nehru Engineering College.

Shri Madan Gopal Gupta is the Chief Operating Officer of JP Power Ventures and has joined the company in April 2019. He has over three decades of experience in India’s power sector and prior to joining JP Power, he was the CEO of Essar Power. Shri Madan Gupta has received his BE in Mechanical Engineering from NIT, Srinagar. 

Shri M.K.V. Rama Rao is the Chief Technical Officer of JP Power Ventures and has vast experience in India’s power sector. He has held various positions in NTPC from 1978 to 2013 and has completed his M.Tech in Production Technology from IIT-Kharagpur. 

Shareholding Pattern

Jaiprakash Associates is the company’s sole promoter entity, holding a full 24% ownership, with 79.20% of the shares pledged.

In the domestic institution segment, banks own 16.54% stake of the company, while LIC owns 1.38%. 

JP Power Financial Review

Revenue From Operations

In FY24, revenue from operation increased by 18.66.8% to ₹6,763 crores from ₹5,787 crores in FY23. 

And, in the first half of FY25, revenue from operations declined marginally by 2.5 % to ₹2,981 crores from ₹3,057.63 crores reported in the same period last year. 

Net Profit

In FY24, JP Power recorded a massive 1758% rise in net profit to ₹1,022 crores, up from ₹55 crores in FY23.

The rise in net profit in FY24 is due reducing financing cost and one time exception gain of ₹461 crore

And, in the first half of FY25, net profit increased by 104% to ₹531.20 crores from ₹260.31 crores reported in the same period last year. 

Key Financial Ratios

Current Ratio: The current ratio of the company improved by 53% in FY24 to 1.82 times from 1.19 times in FY23. 

Debt-to-equity Ratio: During FY24, the company’s debt position improved slightly. The Debt-to-equity ratio of the company in FY24 improved to 0.37 times from 0.44 times in FY23. It was 3 times in FY19.

Other important metrics in FY24, such as Debt-service Coverage Ratio, Return on Equity, Return on Capital Employed, Return on Asset, and Net Profit Margin, are inflated and non-comparable due to an increase in post-tax earnings from one-time extraordinary gains. 

JP Power Ventures Debt Status

At the end of FY24, the outstanding debt (including short and long term) of the company declined by 10.7% to ₹4,242 crores.

JP Power Share Price Analysis

The last five year performance of JP Power share price has been impressive, rising from ₹1.35 to ₹19 in the last five years, registering 1200% gains during the period. 

JP Power share price all time high level is ₹137, which it made on 4th January 2008. In recent years, the company has stopped paying dividends and the last dividend it paid was in 2009. 

Source: Tradingview

JP Power Share Price Valuation Score

Earning Per Share (EPS)

The following is the last five years Earnings Per Share of JP Power:

FY20	– ₹3.16
FY21	₹0.39
FY22	₹0.16
FY23	₹0.08
FY24	₹1.49

The company’s EPS growth has been inconsistent during the last five years. However, EPS growth has improved over the last two fiscal years. In the first half of FY25, EPS growth reached ₹0.60, up from ₹0.24 the previous year. 

Price-to-book VS Median Price-to-book

The current price-to-book value of JP Power is 1.1 times, while the 5 year Media Price-to-book value is 0.6 times, which means, it is trading at slightly valuation compared to historical averages. 

EV/EBITDA vs Median EV Multiple

EV/EBITDA compares a company’s enterprise value (EV) to its earnings before interest, taxes, depreciation, and amortization (EBITDA) to assess its worth and performance. It is an important valuation metric for asset heavy companies. 

EV includes a company’s stock, debt, cash, and cash equivalents and has been viewed as the better alternative to market capitalization. A lower EV/EBITDA multiple indicates that the company is undervalued relative to its earnings. 

JP Power EV/EBITDA multiple is 5.6 times, which is lower than the 5 years median EV multiple of 6.9 times. 

Free Cash Flow (FCF)

In the last two financial years- the company has been able to generate free cash flow. It measures the cash generated after accounting for capital expenditure. 

To calculate free cash flow, we need to deduct capital expenditure incurred during the year from net operating cash flow. 

In FY24, the net cash flow from operations is ₹1,933 crores and capital expenditure is ₹184 crores, translating to free cash flow of ₹1,749 crores. It was ₹647.52 crores in FY23. 

Rising free cash flow indicates improved financial health, operational efficiency, and investment potential. 

JP Power Share Price Future Outlook

Once a debt-ridden company staring at a bleak future, JP Power has slowly charted a turnaround with improved operational efficiency and better financials. The company in the last few years has steadily worked on to reduce its debt through strategic debt restructuring, selling some of its core and non-core assets, which has helped to improve its finances significantly. 

Looking at the company’s operational performance, JP Power is able to improve its operational efficiency. 

However, the hydrology risks in hydro electric plants can reduce their efficiency, which can impact revenue. 

Other big risks include ever changing carbon emission norms for fossil fuel based power plants, high volatility in fuel prices for thermal power plants, and lack of long-term PPA with utilities. 

JP Power has recently received “Right of Exploration” for the Banda (North) Coal Block, where exploration activity is currently underway. This can add to revenue growth of the company. 

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Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as a recommendation or investment advice by Equentis – Research & Ranking. We will not be liable for any losses that may occur. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL & the certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors.

FAQ

Extended non-performance period and failure to surpass its IPO issue price of ₹ 36. Investors almost wrote off NHPC. 

But something changed for the stock in the last couple of years. A greater push for renewable energy and favorable government policies led to strong demand for the stock, helping it cross the ₹100 threshold for the first time on February 2, 2024. 

In this article, we will perform a fundamental analysis of the NHPC share price and examine the stock’s long-term growth potential. Let’s begin. 

What does NHPC Do?

NHPC is a state-owned hydropower generation company that develops, operates, and sells bulk power to state utilities. 

Recently, it has also diversified into developing solar and wind energy projects. 

As of 31st October 2024, the company operates 22 hydropower stations, five solar power projects, and one wind energy project, with a combined installed capacity of over 7,200 MW. 

Along with its multiple joint venture partners, NHPC is currently developing 15 renewable energy projects, a mix of hydro and solar, with an installed capacity of over 10,000 MW.

Apart from selling energy from all its renewable energy projects, it earns revenue from power trading, contract execution, project management, and consultancy work. 

NHPC Management Team

Shri Rajendra Prasad Goyal is the Chairman and Managing Director of NHPC and holds the additional charge of Director (Finance). He started his career with NHPC in 1988 as a Senior Accountant and rose through the ranks, serving the company on various key projects. He is an associate member of ICAI and holds a Master’s Degree in Commerce from the University of Rajasthan. 

Shri Uttam Lal is the Director (Personnel) and has over 35 years of rich experience in human resource policies, industrial relations, employee benefits, and learning and development. Before joining NHPC, he headed the HR functions of the R&D wing of NTPC. Shri Lal has a management graduate degree from XISS, Ranchi, with an additional qualification of Bachelor of Law (HRM) and Harvard Manage-mentor certification. 

Shri Raj Kumar Chaudhary is the Director (Technical) at NHPC, overseeing the development and operations of various projects in India and Bhutan. He joined NHPC in 1989 as a Probationary Executive (Civil) and rose through the ranks of his career to the post of Director (Technical). 

Shri Sanjay Kumar Singh is the Director (Projects), and before joining NHPC, he was the Chief General Manager of SJVN Ltd. He has over 32 years of experience in the Power & Infrastructure sector. Shri Sanjay holds a degree in B.Tech (Civil) and has worked at various levels for key project activities like Project Construction, Survey & Investigation, preparation of detailed project reports and cost estimates, project planning and execution, and many other things. 

NHPC Shareholding Pattern

In the Domestic Institution segment, mutual funds in India hold a 3.63% stake in the company, and the Life Insurance Corporation of India has a 3.96% stake. 

NHPC Financial Performance

Revenue

In FY24, total income declined by 1.24% to ₹10,025 crores from ₹10,150.90 crores in FY23. 

And, in the first half of FY25, total income increased by 5.1% to ₹6,440 crores from ₹6,124 crores reported in the same period last year. 

EBITDA

In FY24, EBITDA growth was flat and decreased slightly to ₹5,733 crore from ₹5,743 crore in FY23. However, the EBITDA margin improved to 68% in FY24 from 61.65% in FY23. 

Net Profit

In FY24, NHPC recorded a 2.3% decline in net profit at ₹3,743.94 crores, down from ₹3,833 crores in FY23.

In the first half of FY25, net profit decreased by 21% to ₹2,177.74 crores from ₹2,788.64 crores reported in the same period last year. The company’s net profit margin declined to 37.90% at the end of H1FY25 from 49% at the end of H1FY24. 

NHPC Financial Ratios

Current Ratio: At the end of Q2FY25, the company’s current ratio declined 1.15 times from 1.24 times recorded in the same period last year. 

Debt-Equity Ratio: At the end of Q2FY25, the debt-to-equity ratio increased to 0.90 times from 0.82 times in Q2FY24. 

Debt Service Coverage Ratio (DSCR): The company’s debt service capability declined significantly. At the end of Q2FY25, its DSCR was 2.05 times, down from 4.39 times at the end of Q2FY24. 

Return on Capital Employed (ROCE): At the end of FY24, the company’s ROCE was 6.85%. 

NHPC Share Price Analysis

NHPC shares were listed on 1 September 2009, and they were oversubscribed nearly 24 times. After their listing, investor response was muted, and the stock traded in a range-bound fashion below its IPO price for more than 10 years. 

On 15th July 2024, the NHPC share price reached an all-time high level of ₹118.40.  In the last three years, the NHPC share price made a remarkable turnaround and became a multibagger stock, growing by 37% annually. 

NHPC has a consistent dividend payment track record. Over the years, it has distributed more than 50% of its net profit as dividends to shareholders. In FY24, the dividend payout percentage was 53% of its net profit. 

In FY24, it paid ₹1.90 as dividend per share, ₹1.85 in FY23, and ₹1.81 in FY22.  At the current NHPC share price of ₹79, the dividend yield ratio is 2.40%.

NHPC Share Price Valuation Score

Earning Per Share (EPS)

The following is the last five years Earnings Per Share of NHPC:

FY20	₹2.99
FY21	₹3.22
FY22	₹3.52
FY23	₹3.82
FY24	₹3.73

The company’s EPS growth has been moderate during the last five years and even decreased in the most recent fiscal year. It is important to note that a company’s share price rise is directly proportional to its earnings growth.

Price-to-Book VS Median Price-to-Book

The price-to-book value of NHPC’s share price is 2, while the 5-year median price-to-book value is 2. This indicates that the stock is trading at two times the book value compared to its historical averages. 

Price-to-Equity VS Median PE

The current PE ratio of NHPC is 26.7, meaning investors are paying 26.7 times for every ₹1 of earnings. 

However, looking at the PE ratio in isolation doesn’t tell the full story. Therefore, we will compare it with a 5-year median PE.

As per data from the screener, the company’s 5-year median PE is 9.3. This means that at its current PE level, the stock is not trading at a premium compared to its historical valuations. 

Because the stock was trading sideways with no major upside momentum following its IPO, the median long-term PE is low, and after the recent surge, the stock appears overpriced.

Comparing the stock PE to a peer firm will provide a more accurate estimate of stock valuations.

For example, SJVN Ltd., a state-owned hydropower generation business, trades at a PE of 45.7 times and has comparable financial metrics. This indicates that NHPC sells at a lower premium than its peer, SJVN.

NHPC Future Growth Outlook

The nature of its business restricts NHPC’s pursuit of aggressive growth in the hydropower segment. However, its recent diversification to solar and wind energy businesses provides the company with new growth opportunities.

Factors to look out for that could drive the earnings of the company:

Expansion Plans: The company has 10,402 MW of hydro and solar projects under various stages of construction, 4,112 MW of projects awaiting clearance, and 4,110 MW under survey & investigation, providing a long-term growth runway.

Flat revenue growth: In the last five years, the company’s compounded annual revenue growth has been 1%. A longer project execution timeline and flat revenue growth are key risks for NHPC’s share price growth. 

The company’s operating margins are high, but due to the capital-intensive nature of the business and higher non-classified expenses, the net earnings margin is lower. A boost in earnings per share is crucial for the long-term growth of its shares. 

Favorable Government Policies: In a bid to achieve 500 GW of renewable energy capacity by 2030, the government is supporting renewable energy companies through various policy initiatives, helping them grow and strengthen their balance sheets. 

Environmental and Hydrological Risks: Adverse weather conditions, unfavorable hydrology, and variations in water flows can affect power generation and the company’s operational performance. 

Regulatory Risks: Changes in regulatory regulations, particularly tariff adjustments, can impact NHPC’s revenue and profitability. While producing stable returns, the cost-plus tariff regime is subject to regulatory changes.

Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as a recommendation or investment advice by Equentis – Research & Ranking. We will not be liable for any losses that may occur. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL & the certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors.

FAQ

This railway multibagger stock has caught everyone’s attention in the market. IRFC share price has reached an all-time high of ₹229 on 15th July 2024, rising more than 800% since its IPO in January 2021. And, investors continue to bet heavily on this stock. 

IRFC stands for Indian Railway Finance Corporation, and its primary task is to meet Indian Railways’ financial requirements by borrowing funds from financial markets. In short, IRFC is a funding arm of Indian Railways. 

In this article, we will analyze the IRFC share price and delve deeper into its financials. Let’s start. 

What does IRFC do?

IRFC is a public sector enterprise under the administrative control of the Ministry of Railways. It was incorporated on 12th December 1986 as a dedicated financing arm of Indian Railways to mobilize funds from domestic and overseas markets. 

Its primary business is to finance the acquisition of rolling stock assets of Indian Railways including locomotives, passenger coaches, wagons, electric multiple units and leasing these assets to other entities under the Ministry of Railways. 

All of these assets are leased for up to 30 years and lease rentals serve as the primary source of revenue for the company. The lease is divided into blocks of two 15-year periods. In the first 15 years, the lessee pays the principal amount for the leased assets, followed by a rent of ₹1 lakh per annum for the remaining 15 years, or until the asset is sold off before the lease period ends. 

So far, IRFC has funded the acquisition of 13,764 locomotives, 76,735 passenger coaches, and 2,65,815 wagons, accounting for approximately 75% of the total rolling stock fleet of Indian Railways. 

It is also lending to other railway entities like RVNL, Railtel, Konkan Railway Corporation Limited, and Pipavav Railway Corporation Limited, etc. 

IRFC raises funds through issue of both taxable and tax-free bonds and term loans from banks and financial institutions. 

IRFC Management Team

Smt. Usha Venugopal is the Chairman and Managing Director of IRFC from 1st August 2024. She is an Indian Railways Account Service (IRAS) officer of 1987 batch and has over 35 years of experience handling various key roles in the Ministry of Railways. 

Ms. Uma Ranade is the CEO and Railway Board has given her additional charge of CMD. She is a 1986 batch IRAS officer with over 35 years of experience in various Railway divisions and the Ministry of Railways. 

Ms. Shelly Verma is the Director (Finance) of IRFC. She holds B.Com degree from Shri Ram College of Commerce, Delhi and is a fellow member of ICAI. Prior to joining IRFC, she was with Power Finance Corporation as Executive Director (Finance) and has more than 30 years of experience in power sector financing. 

Shareholding Pattern

The shareholding pattern shows that mutual funds and other institutional investors own a small stake in the company.

The company’s free-float is close to 14%, which means that only 14% of its shares are available for trading. When compared to IRCTC, the free float is nearly 38%.

When demand for shares rises, a lower free float frequently causes a sharp increase in share price.

IRFC Financials

Total Income

In FY24, the company’s total income increased by 12.2% to ₹26,656 crores from ₹23,763 crores. 

And, in the first half of FY25, IRFC’s total income increased marginally by 1.7% to ₹13,666.22 crores from ₹13,437.93 crores. 

Net Profit

In FY24, net profit of the company increased by 4% to ₹6,412 crores from ₹6,167 crores.

And, in H1FY25, IRFC’s net profit increased by 3% to ₹3,189.47 crores from ₹3,095.86 crores. 

Asset Under Management

Asset Under Management or AUM reflects the total market value of all assets that the company manages for its clients. In IRFC’s case, Indian Railways is the primary client. 

At the end of FY24, IRFC managed assets worth ₹4.64 lakh crores and at the end of H1FY25, AUM marginally declined to ₹4.62 lakh crores.

Asset Quality 

IRFC is one of the few NBFCs in India with no NPAs. This is because all loans are guaranteed by the Indian government, allowing it to operate with a low-risk business model and borrow funds at low rates. 

Also, the Government of India has exempted IRFC from paying any income taxes. 

IRFC Share Price Analysis

IRFC shares were listed on 29th January 2021 and made a quiet start around its IPO issue price. Eventually, IRFC share price exploded to make an all-time high of ₹229 on 15th July 2024, around 9 times its listing price. 

As of 15th November 2024, IRFC market cap stands at ₹1,82,515 crore and is trading at ₹140 per share. 

IRFC has a good dividend payment history. In 2021, the dividend per share was ₹1.43, ₹1.5 in 2023, and ₹1.5 in 2024.

As of 15th November 2024, the dividend yield of IRFC stands at 1.07.

Earning Per Share (EPS)

EPS is an essential metric to assess whether a company is enhancing its profitability per share over time. Consistent flat EPS growth suggests that the company isn’t generating sufficient profit for its shareholders.

The following is the last five years EPS of IRFC.

FY20	₹3.93
FY21	₹3.66
FY22	₹4.66
FY23	₹4.85
FY24	₹4.91

Over the last five years, IRFC reported a marginal increase in EPS. Consistent growth in earnings is important for rise in share price. 

Return on Equity (ROE)

Return on Equity is calculated by dividing the net profit by shareholder’s fund or equity. 

The following is the last 5 years ROE of IRFC:

FY20	11.92
FY21	12.29
FY22	14.85
FY23	13.93
FY24	13.03

The five year average ROE of IRFC is 13.20%. 

A consistent ROE of 15% or higher is generally considered good as it indicates that the company is effectively using shareholder’s equity to generate profits. 

Return on Assets (ROA)

Return on assets is another profitability metric that is especially important for banks and NBFCs, which have an asset-heavy balance sheet. It is calculated by dividing net profit by total assets. 

The following is the last five year ROA of IRFC. 

FY20	1.33
FY21	1.16
FY22	1.35
FY23	1.29
FY24	1.32

The five year average ROA of IRFC is 1.29.

A ratio of more than one indicates that a company is generating more profit than the value of its assets. 

Price-to-Book VS Median Price-to-Book

For banking and NBFC stocks, the price-to-book ratio is the more appropriate ratio to measure valuations.

IRFC is trading at a price-to-book value of 3.5 times, while the 5 year Median Price-to-book value is 0.9 times, which means, it is trading at higher valuation compared to historical averages. 

Future Growth Potential of IRFC

The growth of IRFC is dependent on the growth of Indian Railways and its ability to raise low-cost funds.

In FY25, the Government of India has allocated a record ₹2.62 lakh crore in capex, a significant increase from ₹28,174 crores in FY14. The money will be spent on modernization of Indian Railways, new infrastructure development, and improving passenger safety and experience. 

Recent developments, such as the introduction of Vande Bharat train sets and Vande Bharat Sleeper train sets, the conversion of train rakes from ICF to LHB coaches, the transition to a fully electrified network, and the Dedicated Freight Corridor, have all contributed to an increase in demand for rolling stock within the Indian Railways.

The India’s railway and metro rolling stock market is expected to reach ₹4.75 lakh crores in the next five years, growing at a CAGR of 46%, showcasing huge growth potential for IRFC. 

One of the biggest advantages of IRFC is its low risk business model and predictable business growth. Recently, it has diversified its lending activities to financially viable project financing, And, it is the sole player in its business, giving it a long runway of growth.

However, in the event of unfavorable policy changes by the Ministry of Railways, it can adversely impact the growth of the company and IRFC share price. 

FAQ on IRFC Share Price

Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as a recommendation or investment advice by Equentis – Research & Ranking. We will not be liable for any losses that may occur. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL & the certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors.

Introduction:

The Public Sector Undertaking (PSU) bank sector is a key part of India’s banking system, comprising banks where the government holds a majority stake. This ownership ensures that these banks operate in the public interest. The growth of PSU banks aligns closely with national economic policies and efforts toward financial inclusion. The ongoing reforms and the government’s push for digital banking in 2024 have positioned PSU banks to adopt new technologies that enhance their services and operational efficiency. This growth is reflected in the NIFTY PSU Bank index, highlighting the sector’s positive trajectory.

Source: NSE

To make the best out of this growth, you can either invest in the index itself or a PSB like the Canara Bank. But before deciding on the investment, let’s take a look at the Canara Bank stock rate and use fundamental analysis to evaluate the Canara Bank stock price. 

Canara Bank Overview:

Canara Bank, known for its customer-centric approach, was established in July 1906 in Mangalore, Karnataka. Over its more than a century-long journey, the bank has experienced significant growth, especially after nationalization in 1969, which propelled it into a national player with extensive geographical reach and diverse clientele. The 1980s marked a period of business diversification for the bank. In June 2006, Canara Bank celebrated a century of operations in the Indian banking sector and later merged with Syndicate Bank in April 2020.

Today, Canara Bank is a major financial conglomerate with thirteen subsidiaries and sponsored institutions. It serves over 11.42 crore customers through a vast network of 9,627 branches and 12,256 ATMs across India. As of June 2023, it holds a market share of 6.2% in net advances and 6.5% in total deposits. The bank excels not only in commercial banking but also in corporate social responsibility. It focuses on national priorities, promotes rural development, and enhances self-employment through training institutes while advancing financial inclusion.

Canara Bank has consistently maintained a balanced asset mix, emphasizing sectors like agriculture and Micro, Small, and Medium Enterprises (MSMEs) alongside retail assets such as housing, education, and vehicle loans. As of March 2024, the bank’s capital adequacy ratio stood at 16.28%, well above the regulatory requirement of 11.5%. In FY 2023-24, it raised infrastructure bonds to diversify funding sources, totaling Rs.10,000 crore at competitive rates.

Shareholding Pattern:

The shareholding pattern of Canara Bank as of the quarter ending September 2024 is as follows-

Source: Company Report

Key Management Personnel:

Canara Bank was started by Shri Ammembal Subba Rao Pai in 1906. As of the financial year ending March 2024, the bank operates under the leadership of the following key management personnel:

1. Shri Vijay Srirangan (Non-Executive Chairman):

Shri Vijay Srirangan, a Gold Medalist from IIM Ahmedabad (PGDBM) and IIT Delhi (B.Tech), brings extensive experience to his role since November 2022. He was the Director General and Mentor at the Bombay Chamber of Commerce & Industry. Previously, he spent 36 years with Tata Group, serving in leadership roles at Tata Consultancy Services, Tata Infotech, Tata Unisys, and Tata Burroughs. His responsibilities ranged from training and research to international sales and systems integration.

2. Shri K Satyanarayana Raju (MD and CEO):

Shri K. Satyanarayana Raju, a Physics graduate with a postgraduate degree in Business Administration (Banking and Finance), began his banking career in 1988 at Vijaya Bank. He rose to Chief General Manager at Bank of Baroda, leading branches and serving as Zonal Head of Mumbai. He also held key roles in operations and services at the head office and was on the board of BoB Financial Solutions Limited. Currently, as Executive Director of Canara Bank since March 2021, he oversees various functions, including IT, digital banking, MSME, and corporate credit. 

3. Dr. Parshant Kumar Goyal (Director representing the Government of India):

Dr. Parshant Kumar Goyal, IAS, serves as Joint Secretary in the Department of Financial Services, Ministry of Finance, focusing on Financial Inclusion and Digital Payments. Earlier, as director of the same department, he handled agriculture credit and regional rural banks. He has also served as Secretary to the Chief Minister of Tripura, managing additional portfolios in the GA (C&C) and Industries & Commerce departments.

Canara Bank Financials:

1. Operating Profit:

Operating profit reflects the income generated from its core activities like lending, deposits, and other financial services, minus the operating expenses such as salaries, rent, and administrative costs. As of the financial year 2023-24, the operating profit for Canara Bank was Rs.29413 crore. The trend of operating income over the last few years is as under-

Source: Annual Report

2. Net Profit:

One of the primary measures of profitability, the net profit, for Canara Bank has been increasing since the bank incurred losses in 2019-20. As of the financial year 2023-24, the net profit of the bank was Rs.14554 crore. The trend of net profit over the last few years is as under-

Source: Annual Report

3. Net Interest Income:

Net Interest Income represents the bank’s profitability earned through its core activities. As of the financial year ending March 2024, the bank’s net interest income stands at Rs.36566 crore, which was 16.32% more than the NII of FY2023 (Rs.31435 crore). The trend for the NII of the bank over the last few years is as under-

Source: Annual Report

4. Deposits:

Deposits are a major source of funding for a bank, representing the money customers leave in savings, checking, or fixed accounts. For a bank, a growing deposit base means it has a larger base for lending, and its ability to generate income is good. A stable deposit trend indicates consistency and a lower base could signal a doubt in the bank’s ability to lend and earn. As of the financial year 2023-24, Canara Bank received a total deposit of Rs.22,72,968 crore, of which the CASA deposits were Rs.392327 crore, 7.06%. The trend for deposits received by Canara Bank over the last few years is as under-

Source: Annual Report

5. Advances:

Advances refer to the loans and credits extended by a bank to its customers. Interpreting a bank’s advances reveals the bank’s risk exposure and profitability. Higher advances indicate active lending and is considered positive when driven by a healthy demand and good credit quality. However, this needs to be examined in combination with risk management and the bank’s NPA. As of FY2024, Canara Bank’s advances stood at Rs.960602 crore. The trend for advances as per the bank’s loan book over the last few years is as under-

Source: Annual Report

Key Financial Ratios for Canara Bank:

• Capital Adequacy Ratio: The bank’s capital adequacy ratio is 16.28%. This means that for every Rs.100 of risk-weighted assets, the bank has Rs.16.28 in capital. The ratio highlights the bank’s healthy cushioning for organic growth in the forthcoming quarters and the bank’s ability to absorb potential losses.
• Net NPA Ratio: The net NPA ratio is 1.27%, meaning that out of every Rs.100 lent, Rs.1.27 is classified as non-performing. A lower NPA ratio shows effective credit management and a lower risk of bad loans.
• Return on Equity: The return on equity is 22.06%. This indicates that for every Rs.100 of equity invested by shareholders, the bank generated Rs.22.06 in profit, reflecting strong profitability.
• Return on Average Assets: The bank’s RoAA is 1.01%. This means that for every Rs.100 of assets, the bank earned Rs.1.01 in profit. A higher ROAA shows better asset utilization.
• Net Interest Margin: The net interest margin is 3.05%, meaning that for every Rs.100 of interest-earning assets, the bank earns Rs.3.05 in net interest income. A higher NIM shows the bank’s efficiency in earning from its lending activities.
• CASA Ratio: The CASA ratio for Canara Bank is 32.29%. This means that 32.29% of the bank’s total deposits come from low-cost current and savings accounts, reflecting a stable and cost-effective source of funding for the bank.

Source: Annual Report

Canara Bank Share Price Analysis:

A registered investment advisor evaluates a company share using analysis techniques and a stock screener. Canara Bank was listed on the NSE in December 2002. Since then, the stock has generated gains of over 900%. As of 24th October 2024, the market cap of Canara Bank stands at Rs.89,101.01 crore, and its share price stands at Rs.98.22, more than the Bank of Maharashtra share price (Rs.50). 

Source: MoneyControl

Over the last twelve months, the stock has grown 38.07% as of 24th October 2024. It has surpassed the growth levels of the major indices NIFTY50 (26.42%) and SENSEX (23.92%). 

FY2024 Performance Highlights of Canara Bank:

• The bank’s global business grew by 11.31% in FY 2023-24, reaching Rs.22,72,968 crores, with global deposits increasing by 11.29%.
• Its retail portfolio saw an 11.68% growth, reaching Rs.1,56,414 crores. Housing loans rose by 10.81% to Rs.93,482 crores, vehicle loans by 14.03% to Rs.17,251 crores, and education loans grew by 6.65% to Rs.15,726 crores.
• Advances to agriculture and allied activities increased by 18.69%, reaching Rs.2,53,206 crores, while advances to the MSME segment grew by 6.67% to Rs.1,31,869 crores by March 2024.
• The bank’s yield on advances rose by 101 basis points, from 7.70% in March 2023 to 8.71% in March 2024.
• In January 2024, Canara Bank inaugurated its Data and Analytics Center (DnA) in Bengaluru, setting a benchmark in the Indian banking sector.
• The bank introduced API Banking to provide seamless digital banking services for corporate customers.
• Canara SHG E-money, a unique digital initiative in partnership with the Reserve Bank Innovation Hub, now offers doorstep digital services to Self-Help Groups (SHGs).
• The bank has partnered with NEC Corporation and HPE for Data Lake House implementation and with Microsoft for establishing an Advanced Analytics Platform and Data Lake in the cloud.

Source: Annual Report

Bottomline:

In FY2024, Canara Bank introduced API banking for corporate customers and launched Canara SHG E-money with the Reserve Bank Innovation Hub. Embracing digital transformation, it uses advanced analytics and cloud-based solutions to enhance customer service. The bank aims to increase low-cost deposits by offering innovative, customized products, striving to be recognized as the “Best Bank to Bank With.” Investing in Canara Bank could be a way to participate in the growth of India’s banking sector. However, when deciding whether to invest in Canara Bank or another option, remember to consider fundamental analysis vs. technical analysis. Use a stock screener to compare your investment choices with your financial goals. If necessary, consult a registered advisor for guidance.

FAQs

Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as a recommendation or investment advice by Equentis – Research & Ranking. We will not be liable for any losses that may occur. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL & certification from NISM in no way guarantee the performance of the intermediary or provide any assurance of returns to investors.

Tata Tele (Maharashtra) Limited (TTML), Tata Group’s telecom arm, offers a wide range of enterprise telecommunications services, both wired and wireless. It provides services under the name Tata Tele Business Services (TTBS).

Incorporated on March 13th, 1995, Hughes Ispat Limited secured essential telecom licenses to offer cellular services in the Maharashtra region. In December 2002, the company was acquired by Tata Group and renamed Tata Tele Maharashtra Limited. 

The company has been struggling to achieve growth due to rising competition. However, with Tata Sons infusing nearly ₹60,000 crore for debt payments in the past six years, could this become a turnaround stock? Let’s dive into the analysis of TTML share price.

What does TTML Do?

Operating under the Tata Tele Business Services (TTBS), it offers connectivity and communications solutions for businesses in Maharashtra and Goa. 

TTBS offers India’s businesses the most extensive information and communication technology (ICT) services, including connectivity, collaboration, cloud, security, IoT, and marketing solutions. 

The company also operated a consumer mobile business, partnering with Docomo and Tata Teleservices, but it later suspended operations due to unsustainable competition. On July 1, 2019, it sold its consumer mobile business to Bharti Airtel.

TTML Business Overview

The company has a fiber optic network of over 1.3 lakh KM, offering a comprehensive portfolio of smart digital solutions. It includes

• Cloud Infrastructure
• Cybersecurity Solutions
• Managed Services
• Business Communications
• Network & Connectivity
• Communication Suite for Collaboration & Productivity

TTBS primarily focuses on catering and empowering micro, small, and medium enterprises spanning various industries. 

TTML Management Team

Mr. Amur S. Lakshminarayanan is the TTML’s Chairman and a Tata Group veteran. And has also been MD & CEO of Tata Communications since November 2019. He is an engineering graduate from BITS Pilani. Before joining Tata Communication, he was President and CEO of TCS, Japan. 

Mr. Harjit Singh is the Managing Director and CEO of TTML and is responsible for the company’s growth and expansion as a leading digital service provider in the MSME category. He is also a Tata veteran and has been associated with companies such as Tata Housing, Tata AutoComp Systems, Tata Communication, and Neotel before joining TTML in 2019. 

Mr. Shinu Mathai is the Chief Financial Officer of TTML and joined the company in March 2004 and worked in various leadership roles. 

TTML Shareholding Pattern

The company’s shareholding pattern has not changed significantly over the last year, and no mutual funds have invested in it. 

TTML Financial Performance Review

Revenue From Operations

In the last four financial years, TTML’s revenue from operations has grown at a lower single digit of 3.37% annually. In FY24, the company posted ₹1,191.65 crore in revenue from operation, up from ₹1,106.7 crore in FY23. 

In Q1FY25, the company’s revenue from operations increased by 13.31% year-over-year to ₹323.50 crore from ₹285.51 crore in Q1FY24. 

EBITDA

The company’s EBITDA rose marginally in the last four years, from ₹500.3 crores in FY21 to ₹536 crores. The EBITDA margin is maintained at 45%. 

In Q1FY25, the company’s EBITDA was reported at ₹138.53 crores, up from ₹127.20 crores in Q1FY24.

Profit After Tax

Because of higher interest expenses, the company is reporting losses which are greater than its revenue.

The company reported a net loss of ₹323.40 crore in Q1 FY25, compared to a loss of  ₹301.18 crore in Q1 FY24.

TTML Key Financial Ratios

Current Ratio: The company’s ratio deteriorated in FY24 to 0.54 times from 0.64 times in FY23. 

Debt-to-equity Ratio: The debt-to-equity ratio has stayed constant at 1.04 times for the last two financial years. 

Interest Service Coverage Ratio: This metric measures the company’s ability to pay its debt interest costs. It has deteriorated to 0.80 times in FY24 from 0.85 times in FY25, indicating that the company is falling short of meeting interest costs in a financial year. 

Debt Service Coverage Ratio (DSCR): Similar to the interest service coverage ratio, this ratio indicates a company’s ability to repay debt. In FY24, DSCR was 0.08 times, improving marginally from 0.06 times in FY23. It suggests the company lacks enough financial means to repay its debt. 

TTML Share Price Analysis

The company has not created wealth for its investors. Tata Tele was listed on the stock market in October 2000, while its previous owner still owned it. The IPO’s issue price was ₹12. 

Because of the stiff competition in the telecom space following Jio’s arrival in 2016, TTML lost most of its market share due to the closure of its cellular operation, and its share price dropped to the level of a penny stock. However, it bounced back due to the strong performance of its enterprise business. 

TTML share price was trading at ₹2.70 on 14th October 2019 and made a high of ₹290 on 10th Jan 2022. It is currently trading around ₹80 level for quite some time now. 

The company has no history of paying dividends. In August 2013, the company issued bonus shares at a 2:15 ratio, which means that for every 15 shares held, shareholders received two bonus shares.

Tata Tele Maharashtra Limited- TTML Debt Position

TTML’s net debt was ₹19,954 crores at the end of FY24, up slightly from ₹19,825 crore at the end of FY23. 

The interest expenses in FY24 increased to ₹1,621 crores from ₹1,501 crore in FY23. 

	FY23	FY24
Total Borrowings (in ₹ cr)	₹19,825	₹19,954
Interest Expenses (in ₹ cr)	₹1,501	₹1,621

Despite its low debt-to-equity and interest service coverage ratio, TTML’s debt profile has been assigned a stable outlook by CARE Ratings. 

Tata Sons, its holding company, continues to provide strong financial support, which has resulted in a stable outlook. It has invested ₹46,595 crore in TATA Tele Business Services (TTBS) and continues to support the company.

Valuations Score

The valuation metric doesn’t apply to TTML because it is a loss-making company. Hence, the Price-to-Earnings (PE) Ratio cannot be calculated. With a negative net worth, the P/B Ratio is also negative. 

Market Cap to Sales

The company’s market cap-to-sales ratio is around 13 and is trading close to its 5-year median, which indicates that it is neither overvalued nor undervalued in these valuation metrics. 

However, it would help if you compared TTML share price with that of peer companies and analyzed the valuation metrics. 

Industry Outlook

India is the second-largest telecom market in the world, with a teledensity of 85.87% at the end of May 2024. According to IBEF, the total number of telephone subscribers stood at 1,203.69 million, and Wired broadband subscribers stood at 41.31 million.

The percentage of digital penetration in the MSME sector is still lower. According to a report by Redseer, India is home to about 64 million MSMEs, contributing 30% to the nation’s GDP. However, the current digital penetration among MSMEs is 12%, which opens up many opportunities for players like TTML. 

To make MSME more digitally empowered, the Government of India has launched the Digital MSME Scheme for the increased adoption of digital tools, applications, and technologies. The government will provide subsidies to MSME units for using cloud-based software,

All these factors can offer a considerable growth potential for TTML stock price. 

Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as a recommendation or investment advice by Equentis – Research & Ranking. We will not be liable for any losses that may occur. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL & the certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors.

FAQ

Introduction:

The rising middle class and the increasing youth population are leading to a high demand in India’s automobile sector. The indicative index, NIFTY Auto’s yearly gains of 51.71% as of 18 October 2024, shows the sector’s growth and also reflects a growing investment opportunity in the automobile manufacturing industry. 

The industry opportunity can be leveraged by investing in automobile manufacturing companies like Ashok Leyland, India’s second-largest commercial vehicle manufacturer. But what is Ashok Leyland share price? How stable is the company, and what does the fundamental analysis of Ashok Leyland say? Let’s find out. 

Overview of Ashok Leyland Limited:

Ashok Leyland is the Hinduja group’s flagship company, with a strong presence in the medium and heavy commercial vehicle (M&HCV) market. It ranks as the fourth largest bus maker in the world and the 19th largest truck manufacturer. Recently, it was recognized as the 34th-best brand in India. Headquartered in Chennai, Ashok Leyland operates nine manufacturing plants—seven in India and one in the UAE and UK.

The company has a broad portfolio in the auto industry with product concepts that set commercial vehicle (CV) benchmarks. In FY24, it held a 31% market share in the M&HCV segment and 20% in the LCV segment. Ashok Leyland also plays a key role in defense, supplying the largest fleet of logistics vehicles to the Indian Army and partnering with armed forces worldwide. Its portfolio includes diesel engines for industrial, genset, and marine uses, along with electric vehicles through Switch Mobility.

The company has one of the largest networks in the commercial vehicle industry, with 52,863 touchpoints, including 1,748 exclusive ones and 11,207 outlets for Leyparts. Additionally, Ashok Leyland runs driver training institutes across India, having trained over 8,00,000 drivers to date. 

Share Holding Pattern:

The shareholding pattern for the company as of September 2024 is as follows-

Key Management Personnel:

Ashok Leyland was founded by Raghunandan Saran in Chennai, where it began as ‘Ashok Motors’. The leadership baton currently lies in the hands of the following executives-

Mr. Dheeraj G. Hinduja (Executive Chairman):

Mr. Dheeraj Gopichand Hinduja earned his B.Sc. (Hons) in Economics and History from University College, London, in 1993. He represents the Hinduja Group, and his expertise includes global business strategies, building and transforming organizations, and attracting top Boards and management talent. 

Mr. Gopal Mahadevan (Director):

Mr. Gopal Mahadevan is a Chartered Accountant and Company Secretary with 35+ years of experience in finance across various industries. He has worked in manufacturing, internet services, financial services, and project companies. Throughout his career, Mr. Gopal has been part of leading organizations like Thermax, Amara Raja Batteries, Sify, Sanmar Group, and TTK Pharma. He also serves on the board of multiple companies within the Ashok Leyland Group.

Mr. Shenu Agarwal (MD & CEO):

Mr. Shenu Agarwal is an NIT Kurukshetra graduate with Honors and holds an MBA from Duke University, USA. He brings over 25 years of hands-on experience in Sales, Marketing, R&D, Product Management, Strategy, Project Management, New Business Start-ups, and Strategic Tie-ups. Previously, he served as the President of Agri Machinery and Construction Equipment at Escorts Kubota Limited.

Ashok Leyland Financials:

Revenue (Gross Sales):

The company’s revenue has been growing steadily since 2020-21. It reached its highest-ever sales revenue of Rs.38,367 crore in FY24, marking a 6% increase from the previous year. This growth came from selling 1,94,555 vehicles, 32,374 engines, and 3,469 spare parts and other items.

EBITDA:

The company’s EBITDA as of FY2024 was Rs.4607 crore, an all-time high level with a 57% growth from FY2023. Additionally, it was Rs.911 crore for the quarter ending June 2024. Over the years, the EBITDA trend for the company has been as follows-

Profit After Tax:

The company posted a record profit (PAT) of Rs.2,617 crore, its highest ever. The previous record was Rs.1,983 crore in FY19. This marks a 90% growth compared to the previous year. As of the quarter ending June 2024, this figure had already reached Rs.526 crore. Over the past few years, the trend in the company’s PAT has been as follows-

Key Financial Ratios for Ashok Leyland:

As of the financial year ending 31st March 2024, the key financial ratios of the company are as follows:

• Current Ratio: The company’s current ratio is 0.96, which means that for every Rs.1 of liabilities, it has Rs.0.96 in assets. A current ratio lower than 1 is generally considered less favorable. 
• Debt-to-Equity Ratio: The company’s debt-to-equity ratio is 0.01, which means that for every Rs.100 of equity, the company has only Rs.1 in debt. 
• Return on Capital Employed: The company’s ROCE is 15%. This means that the company generates a profit of 15 paise for every rupee of capital employed in the business. 
• Return on net worth: The company gave a 30.8% return on its net worth, meaning that for every Rs.100 of equity invested by the shareholders, it earned Rs.30.8 as profit. This indicates an effective use of shareholder funds to generate profits. 
• The company achieved a 31.1% market share in the  M&HCV Bus and Truck segment in FY2024. 

(Source: Annual Report) 

Ashok Leyland Share Price Analysis:

A company’s share price analysis can be done through both techniques; thus, the question of fundamental analysis vs technical analysis doesn’t affect the outcome. Ashok Leyland was listed on the NSE on 25th May 1995. As of 18th October 2024, the company’s share price is Rs.223.40, and its market cap stands at Rs.65,599.79 crore. In the last twelve months, the stock investment advisors have seen the company stock grow 27.15%, lower than the index growth of 52.08% seen in NIFTY Auto. The company stock, however, crossed the NIFTY50 returns of 26.35% and the SENSEX returns of 23.30% as of the same date.  

Key Highlights of Ashok Leyland For FY2024:

• The company’s aftermarket business grew by 28% over the past year. It also climbed to 2nd place in Sales & Service Satisfaction, showing the impact of its customer-focused initiatives.
• In International Operations (IO), the company saw a 5% increase, delivering 11,853 units in FY24, up from 11,289 units in FY23.
• On March 25, 2024, the Board of Directors declared an interim dividend of Rs.4.95 per equity share for the financial year ending March 31, 2024.
• Over the past three years, the company has achieved strong profit growth of 117.9% and revenue growth of 35.85%. It has also maintained a Return on Capital Employed (ROCE) of 21.57%.
• In October 2024, Ashok Leyland secured a contract to supply 180 electric trucks to Group BillionE.

Bottomline:

Ashok Leyland Limited’s shares have a PE ratio of 23.87, which is lower than that of Force Motors share price. The company’s financial performance in FY2024 is comparatively better than in previous years, considering the record sales and revenue generated this year. However, whether to invest in the automobile sector or not, and if yes, whether to choose Ashok Leyland or go with Tata Motors share price, must be decided based on your financial profile and relevant industry factors like market trends and growth rate. 

*Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as recommendation or investment advice by Research & Ranking. We will not be liable for any losses that may occur. Investment in securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL, and certification from NISM in no way guarantee the performance of the intermediary or provide any assurance of returns to investors.

FAQ