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Top 7 Stocks with Monopoly businesses - Analysis of Shares.

Hello Investors,

Let's today talk about the companies which have a monopoly in the business. Monopoly meaning they have full control over the business and no other company provides the same in that sector. In today's article, we will talk about these monopolies and their business models in detail.

Top 7 Stocks with Monopoly businesses - Analysis of Shares.


IRCTC (Indian Railway Catering & Tourism Corporation Ltd.)

So the first company we will talk about is IRCTC owned by the government of India and operates under the Ministry of Railway and has a monopoly in their business segment. The company's business is of catering, online ticket bookings, and packaged water in the railways. The barrier of entry is soo high that no company can operate in this sector right now. 

IRCTC's website is the most visited in India with 25 to 28 million transactions happening every month. The company is also trying to expand into other businesses as they have recently opened railway lounges.  The IPO was launched on 30th Sept 2020, with a price of Rs 320, and today it trades above Rs 1450 and once there was a time when the share price touched Rs 2000 and came down. 

Since COVID impacted all businesses across sectors, a dip in the total sales and revenue was seen in quarter 1,2 and 3.

In quarter 1, the sales went down by 71%, 82% in quarter 2 and 68% in quarter 3 which shows the impact of covid on the company.

If we speak about the financials of the company so that we can see the impact of monopoly on its share price. The market capitalization of the company is ₹ 31,083.20 Cr. and the PE ratio is around 112 and the company has no debt in recent times. 

Strengths

  • The company has shown a good profit growth of 35.03% for the past 3 years.
  • The company has been maintaining a healthy ROE of 33.38% over the past 3 years.
  • The company has been maintaining a healthy ROCE of 50.04% over the past 3 years.
  • The company is virtually debt-free.
  • The company has a healthy interest coverage ratio of 103.47.

Limitations

  • The company has shown a poor revenue growth of 14.32% for the past 3 years.
  • The company is trading at a high EV/EBITDA of 89.64.

Key Ratios
 

Annual2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 
EBIT Margin (%)33.0223.7122.9521.7022.5920.8214.8414.810.0017.2513.3911.89-8.877.1612.246.539.88
Pre Tax Margin (%)32.7525.5923.1021.7522.5820.8014.6114.350.0017.2113.3911.89-8.877.1612.246.539.88
After-Tax Margin (%)23.2216.5014.9614.0913.8012.757.868.750.008.068.917.68-11.334.837.664.296.34
Return On Capital Employed (%)51.3438.9832.5234.1343.0235.8227.5225.470.0061.5358.2261.87-55.4346.2863.6524.2621.74
Return On Equity (%)39.8028.8123.2227.5834.7929.4020.7520.160.0028.7538.7440.62-73.1232.1341.8016.2314.70
Sales (Cr)2,275.481,870.001,466.801,523.201,366.781,024.08915.06671.800.00754.13707.44604.91508.51418.46258.21121.4264.96
Sales % Chg+22%+27%-4%+11%+33%+12%+36%--100%+7%+17%+19%+22%+62%+113%+87%-
Net Income (Cr)528.57308.56219.52214.69188.63130.6372.0158.84-60.7963.0546.50-57.6620.2319.785.214.12
NI % Chg+71%+41%+2%+14%+44%+81%+22%---4%+36%+181%-385%+2%+280%+26%-
Book Value/Share (INR)82.9966.94236.34194.58271.04222.13173.46145.89123.35105.7181.3857.230.000.000.000.000.00
Return On Assets (%)16.2611.899.5411.7513.1211.387.466.780.007.989.048.09-12.975.677.624.434.21
Asset Turnover Ratio (%)70.0172.0863.7783.3895.1189.2594.8777.400.0099.04101.51105.23114.39117.4699.54103.2566.52
Inventory Turnover Ratio (%)233.07237.05198.06231.47165.46107.3996.0274.000.00121.4590.83116.5188.7570.0935.8632.5537.33
Interest Coverage Ratio (%)103.32188.84115.78130.392,682.691,727.97858.19766.380.00435.080.000.000.000.000.000.000.00
Dividend Payout Ratio (%)42.0748.2221.4952.6140.0020.0019.990.000.0020.0020.0020.02-7.1919.7720.2219.1924.27
Earning Retention Ratio (%)57.9351.7878.5147.3960.0080.0080.010.000.0080.0080.0079.98107.1980.2379.7880.8175.73
Current Ratio (X)1.601.551.601.801.591.551.451.201.521.221.131.131.121.131.141.161.13
Quick Ratio (X)1.591.551.591.791.581.531.431.181.511.211.121.121.101.111.101.121.11


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HAL, (Hindustan Aeronautics Ltd)

The next company is HAL, Hindustan Aeronautics Ltd and is an alone player in its sector. It was incorporated in 1940 by Walchand Hirachand in association with the Government of Mysore. The full control was shifted to the Government of India and manufactures different aircraft for them. 

After 1951, the company was put under the Ministry of Defense who still owns it. It has a monopoly because due to security reasons, the ministry doesn't allow any other company's in air defence.

The sales went to -47% due to COVID in the first quarter and rose to 45% in quarter 2.  The market capitalization is around 31000 Cr and the PE is less around 12.6. It has given a 15% return in the past year and the debt to equity ratio is 0.31 which is a good number.

Strengths

  • The company has been maintaining a healthy ROE of 20.74% over the past 3 years.
  • The company has been maintaining a healthy ROCE of 27.04% over the past 3 years.
  • The company has a healthy interest coverage ratio of 11.93.
  • The company’s PEG ratio is 0.58.
  • The company has a high promoter holding of 75.15%.

Limitations

  • The company has shown a poor profit growth of 2.69% for the past 3 years.
  • The company has shown a poor revenue growth of 6.10% for the past 3 years.
  • The company has high debtor days of 204.67.
  • The company has contingent liabilities of 17,384.65 Cr.

ALSO READ WHY THE RICH PAY LESS IN TAXES? Save Income Tax in India 2021 under Section 80C, 80D, 80E.

Key Ratios
 
Annual2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 
EBIT Margin (%)19.3919.5517.9720.0119.1310.7824.1924.9123.4221.6323.4622.5125.2522.6121.9817.6516.92
Pre Tax Margin (%)18.3218.7017.9419.9519.1310.7324.1824.9123.4221.6323.4622.5125.0922.4021.0816.7015.77
After-Tax Margin (%)13.2111.7211.1714.5711.926.3916.8621.4117.8616.1117.1716.7718.9214.7614.4311.0510.78
Return On Capital Employed (%)18.7417.3913.9913.8513.436.2016.0117.4513.7612.2327.9228.6832.6834.1325.6122.9722.26
Return On Equity (%)21.4719.4217.2020.8618.136.7417.6224.9422.3921.6924.2126.2930.8828.4724.3119.0618.28
Long Term Debt To Equity (%)-0.820.830.000.000.000.030.030.040.050.000.000.000.0911.5014.5216.52
Sales (Cr)21,438.3820,008.4718,519.2517,950.2016,758.5015,647.7015,134.9015,121.4014,211.0613,123.7311,455.8210,370.708,623.127,781.925,341.504,533.803,799.79
Sales % Chg+7%+8%+3%+7%+7%+3%0+6%+8%+15%+10%+20%+11%+46%+18%+19%-
Net Income (Cr)2,832.362,346.062,070.412,615.631,998.001,000.702,551.903,237.602,539.432,114.261,967.411,739.861,631.881,148.76771.14501.07409.79
NI % Chg+21%+13%-21%+31%+100%-61%-21%+27%+20%+7%+13%+7%+42%+49%+54%+22%-
Book Value/Share (INR)394.45361.10359.86346.79304.82307.82300.351,077.28940.96808.73674.15549.08438.480.000.000.000.00
Return On Assets (%)5.324.624.205.073.531.604.005.624.594.034.263.914.053.282.922.613.04
Asset Turnover Ratio (%)40.2939.4737.6534.8429.6525.0723.7426.2825.6925.0624.8423.3221.4422.2220.2223.6428.24
Inventory Turnover Ratio (%)1.101.020.960.840.700.630.680.850.880.760.690.991.001.081.111.291.47
Interest Coverage Ratio (%)11.9323.07643.72351.550.00203.333,661.700.000.006,31,006.3178,153.107,817.75164.47110.3924.4618.6714.77
Dividend Payout Ratio (%)39.2528.2251.9642.2125.5247.9634.8725.4432.0520.0119.9920.0020.0321.7626.0019.9920.00
Earning Retention Ratio (%)60.7571.7848.0457.7974.4852.0465.1374.5667.9579.9980.0180.0079.9778.2474.0080.0180.00
Current Ratio (X)1.331.411.461.571.401.491.331.191.501.511.161.041.010.980.980.981.02
Quick Ratio (X)0.710.710.690.740.670.780.790.690.980.910.700.760.760.740.760.750.77


Coal India Ltd

The third company is Coal India Ltd which is headquartered in Kolkata, West Bengal and is the biggest coal producing company in the world, and the largest to give corporate employment. 

They have 82 mining areas spread across 8 states with 394 coal production mines. The major consumers are the power sector, the steel sector and the cement sector too buy from Coal India.

This is one of a few companies which didn't see any impact on COVID and the usage remained the same. It was a fully established monopoly till the government auctioned 41 mines where entry of private players is also possible.  

The interesting fact here is that Coal India provides 80% of the coal to the whole power sector and the demand is expected to remain the same and even grow more. 

It is a profit-making company that gives out huge dividends to its investors and is the highest company to give dividend yield in nifty 50.  The market capitalization is around 78000 Cr and has given more than -25% returns to its investors in the past year.

ALSO READ Top 15 Mutual Funds & 9 Stocks that gave highest returns in Jan 2021.

Strengths

  • The company has shown a good revenue growth of 33.86% for the past 3 years.
  • The company has been maintaining a healthy ROE of 73.84% over the past 3 years.
  • The company has been maintaining a healthy ROCE of 74.26% over the past 3 years.
  • The company is virtually debt-free.
  • The company’s PEG ratio is 0.74.

Limitations

  • The company has shown a poor profit growth of -8.03% for the past 3 years.
  • The company has a negative cash flow from operations of -2,640.45.
  • The tax rate is low at 0.16.
  • The company has a low EBITDA margin of -79.34% over the past 5 years.


Key Ratios

 
Annual2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 
EBIT Margin (%)1,337.551,132.442,484.764,958.6010,055.213,589.714,989.413,041.532,158.951,203.34944.311,289.831,106.901,128.74692.991,622.311,240.18
Pre Tax Margin (%)1,336.931,130.512,555.505,005.5910,130.003,526.724,907.142,934.892,067.881,153.60862.511,147.79949.281,013.75623.201,431.281,088.86
After Tax Margin (%)1,334.761,120.582,549.635,001.7510,024.163,457.164,775.982,780.501,939.371,146.90843.471,036.11902.761,005.65738.731,447.201,070.58
Return On Capital Employed (%)52.0257.7854.4581.7685.8169.9381.8644.8339.2723.7222.8424.0920.2122.1412.1211.2012.63
Return On Equity (%)67.0974.7973.20104.17103.4179.9791.2647.7341.2226.3522.1521.6218.3522.2915.0912.1713.74
Long Term Debt To Equity (%)-0.000.000.000.000.000.004.455.996.668.5811.7211.3013.0016.7421.8026.03
Sales (Cr)845.16934.30364.50289.88165.53387.12314.25352.25415.86409.46448.14318.05271.81280.54231.7091.55124.51
Sales % Chg-10%+156%+26%+75%-57%+23%-11%-15%+2%-9%+41%+17%-3%+21%+153%-26%-
Net Income (Cr)11,280.8810,469.679,293.4214,499.0916,593.0013,383.3915,008.549,794.328,065.104,696.103,779.923,295.382,453.802,821.291,711.661,324.921,332.98
NI % Chg+8%+13%-36%-13%+24%-11%+53%+21%+72%+24%+15%+34%-13%+65%+29%-1%-
Book Value/Share (INR)27.2822.7120.4522.4225.4026.4926.0432.4830.9728.2127.0124.122,116.602,003.401,795.500.000.00
Return On Assets (%)50.3254.9850.3376.7777.6160.4259.9328.7726.2616.9615.7714.8012.4414.819.457.498.10
Asset Turnover Ratio (%)3.774.901.971.530.771.741.251.031.351.471.861.421.371.471.280.510.75
Inventory Turnover Ratio (%)56.4230.4617.044.241.096.647.8822.4922.4711.4716.8616.2926.0411.857.401.933.58
Interest Coverage Ratio (%)2,149.15586.50-35.12-105.51-134.4556.9960.6528.5223.7124.1911.559.087.029.829.938.498.20
Dividend Payout Ratio (%)65.5577.41110.2085.19104.3097.69122.0490.2878.3152.4558.4651.7569.5053.1673.8020.7213.60
Earning Retention Ratio (%)34.4522.59-10.2014.81-4.302.31-22.049.7221.6947.5541.5448.2530.5046.8426.2079.2886.40
Current Ratio (X)7.702.681.172.773.234.732.582.282.682.613.223.032.752.661.521.081.23
Quick Ratio (X)7.672.641.162.723.154.702.582.282.682.603.223.022.752.661.521.071.22


Hindustan Zinc

The fourth company is Hindustan Zinc which is a part of the Vedanta group and makes lead, zinc and sulphuric acid. It is the only company that makes zinc and lead and is the biggest integrated company in the world. The company is said to be the leading steel manufacturer and at the lowest of costs. 

It was incorporated in 1966 under the public sector and after the disinvestment of 26%, it was given to the Vedanta group. The zinc market share of the company is 78% and to challenge this a lot of capital would be required because the company is already the market leader and the business is capital intensive. 

Due to which the barriers to entry is tough and hence the company maintains its leverage. The company's market cap is 160000 Cr and the PE ratio is around 17 and the company has given over 41% returns to its investors in the past year due to which it has outperformed nifty.

Strengths

  • The company has significantly decreased its debt by 1,927 Cr.
  • The company has been maintaining a healthy ROE of 23.03% over the past 3 years.
  • The company has been maintaining a healthy ROCE of 28.51% over the past 3 years.
  • The company is virtually debt-free.
  • The company has a healthy interest coverage ratio of 75.91.
  • The Company has been maintaining an effective average operating margins of 49.50% in the last 5 years.
  • The company has an efficient Cash Conversion Cycle of -2.36 days.
  • The company has a healthy liquidity position with a current ratio of 4.58.
  • The company has good cash flow management; CFO/PAT stands at 0.97.

Limitations

  • The company has shown a poor profit growth of -6.47% for the past 3 years.
  • The company has shown a poor revenue growth of 2.43% for the past 3 years.
  • Promoter pledging is high as 22.83%.

Key Ratios
 

Annual2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 
EBIT Margin (%)45.8050.0456.7860.2256.0664.8958.7761.9461.3859.7562.7758.9874.2275.7458.4740.4542.59
Pre Tax Margin (%)45.2049.5156.5859.0555.7664.7158.4461.5760.8859.3662.4058.8973.9375.4057.2440.3742.55
After-Tax Margin (%)36.6637.6742.0048.1452.8655.3050.6354.3248.4548.8150.3747.9455.6751.9638.1029.9221.93
Return On Capital Employed (%)20.4530.4433.9532.9522.7720.8620.4823.4224.9925.5226.7322.4647.5981.6053.2439.8547.87
Return On Equity (%)16.8823.6725.8126.9921.8618.8618.4521.3720.5521.7422.2918.9937.1058.2342.9331.5426.84
Long Term Debt To Equity (%)-0.000.000.000.000.000.000.000.000.000.000.060.000.0016.260.010.02
Sales (Cr)18,561.0021,118.0022,084.0017,273.0015,463.0014,788.3913,636.0412,699.8411,405.3110,039.178,023.165,688.517,895.478,547.423,864.442,189.671,844.10
Sales % Chg-12%-4%+28%+12%+5%+8%+7%+11%+14%+25%+41%-28%-8%+121%+76%+19%-
Net Income (Cr)6,805.007,956.009,276.008,316.008,175.008,178.006,904.626,899.485,526.044,900.494,041.412,727.614,396.074,441.811,472.48655.33404.59
NI % Chg-14%-14%+12%+2%0+18%0+25%+13%+21%+48%-38%-1%+202%+125%+62%-
Book Value/Share (INR)95.4179.5485.0572.9188.49102.6088.5676.3963.6253.3342.8933.9828.0418.058.124.923.57
Return On Assets (%)14.4818.7321.6016.0515.3616.6916.5619.4518.7419.5619.9817.1133.2750.7030.3719.8215.01
Asset Turnover Ratio (%)39.5149.7351.4333.3429.0630.1832.7135.8038.6840.0739.6735.6959.7697.5779.7366.2568.42
Inventory Turnover Ratio (%)10.1113.6816.018.9214.6212.2011.3811.4314.2913.1717.7610.4315.2417.1210.096.555.72
Interest Coverage Ratio (%)75.9193.5344.3151.50510.00408.19178.34270.34501.91328.17169.92652.77254.24227.6347.67493.231,054.35
Dividend Payout Ratio (%)-106.2236.44149.37156.6122.7321.4118.9818.358.626.276.194.804.757.1711.2814.62
Earning Retention Ratio (%)--6.2263.56-49.37-56.6177.2778.5981.0281.6591.3893.7393.8195.2095.2592.8388.7285.38
Current Ratio (X)4.582.794.021.712.4411.1111.0212.6313.2910.611.443.783.021.792.170.681.06
Quick Ratio (X)4.242.593.791.622.3710.7110.5512.0412.7510.121.113.242.441.191.540.370.75



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ITC Ltd (Imperial Tobacco Company of India Limited)

The next company is ITC Ltd who has a very diversified business spread across sectors. ITC's major business is in Tobacco, Agri, FMCG, and hotels but the major is tobacco with a market share of 77% due to which the company has acted as a monopoly in that sector. 

The operating profit margin of the company from this segment is 70% and return on capital is 400% in the cigarette and tobacco segment but in recent times, they have tried diversifying their business in the FMCG sector on products like Aashirwad and many more where they have established a presence but how will they improve their margins, that would be seen in the coming times. 

If we speak about the company's compounded sales for the past 5 years, it is 5% and profit with a growth of 10% CAGR. The company saw a negligible impact of COVID but its hospitality sector suffered the most. 

The hotel segment suffered but as compared to the company size it can be adjusted and hence little effect on sales and profit.  The market cap is 2.5 lac Cr and the PE ratio is around 17 and has given -13% returns in the past year. They have aspirational goals in the FMCG sector as the valuations there are very high. But their margins are lacking. This can become a very good case study on how they increase their market share and margins. 

ALSO, READ Why ITC Stock is falling? - Detailed Analysis.

Strengths

  • The company has been maintaining a healthy ROE of 24.45% over the past 3 years.
  • The company has been maintaining a healthy ROCE of 33.48% over the past 3 years.
  • The company is virtually debt-free.
  • The company has a healthy interest coverage ratio of 239.27.
  • The Company has been maintaining an effective average operating margins of 32.76% in the last 5 years.
  • The company’s PEG ratio is 0.90.
  • The company has an efficient Cash Conversion Cycle of 36.88 days.
  • The company has a healthy liquidity position with a current ratio of 4.02.
  • The company has good cash flow management; CFO/PAT stands at 0.99.
  • The company has a strong degree of Operating leverage, Average Operating leverage stands at 3.50.

Limitations

  • The company has shown a poor revenue growth of 4.40% for the past 3 years.


Key Ratios
 
Annual2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 
EBIT Margin (%)42.4241.0640.6738.7240.7338.4938.0936.0235.6534.1832.5931.8932.0731.7533.4535.0436.47
Pre Tax Margin (%)42.0140.9941.4738.6740.6038.3438.0835.7335.3433.8732.1931.7031.9531.6833.2834.4136.02
After-Tax Margin (%)33.1727.7027.6225.4426.7226.3126.4324.8024.4723.2421.8721.8022.2321.9222.8128.8124.84
Return On Capital Employed (%)29.2630.7030.8732.7642.9643.2245.6745.4745.1843.2639.5631.8434.5834.6333.7731.1932.99
Return On Equity (%)23.6321.5021.8322.4929.9431.3133.5133.3632.8831.3628.9923.8825.9926.0124.8327.9725.08
Long Term Debt To Equity (%)-0.010.020.030.070.120.190.290.410.540.760.841.021.191.040.971.02
Sales (Cr)45,619.7044,995.6540,627.5440,088.6836,837.3936,507.4033,238.6029,901.2725,173.8221,458.9818,567.4514,985.8114,032.2012,313.839,798.337,605.606,412.08
Sales % Chg+1%+11%+1%+9%+1%+10%+11%+19%+17%+16%+24%+7%+14%+26%+29%+19%-
Net Income (Cr)15,136.0512,464.3211,223.2510,200.909,844.719,607.738,785.217,418.396,162.374,987.614,061.603,267.563,120.102,699.972,235.352,191.401,592.85
NI % Chg+21%+11%+10%+4%+2%+9%+18%+20%+24%+23%+24%+5%+16%+21%+2%+38%-
Book Value/Share (INR)52.0947.2742.1237.3327.2425.5221.9718.7615.9813.7012.2312.0810.629.207.99105.2185.45
Return On Assets (%)20.1117.8517.9918.8119.8821.7322.3921.8021.2719.6117.4016.5217.7917.7316.7918.6514.91
Asset Turnover Ratio (%)60.6364.4665.1273.9474.3982.6084.7287.8986.9084.3779.5475.7880.0180.8873.6364.7360.05
Inventory Turnover Ratio (%)5.685.935.615.104.324.664.524.534.474.074.083.263.463.673.723.804.18
Interest Coverage Ratio (%)347.36540.46190.71676.51305.47244.774,292.22124.56115.19107.2982.90168.41260.62453.04207.7155.8280.13
Dividend Payout Ratio (%)46.5650.4251.4167.0569.4852.1454.3155.9257.0969.0494.0042.7342.2743.1944.5135.2831.09
Earning Retention Ratio (%)53.4449.5848.5932.9530.5247.8645.6944.0842.9130.966.0057.2757.7356.8155.4964.7268.91
Current Ratio (X)4.023.072.773.591.652.051.821.701.591.541.011.711.551.531.391.110.97
Quick Ratio (X)3.132.281.952.441.071.381.181.060.970.920.440.750.660.680.660.480.54


Pidilite (Pidilite Industries Limited)

Before starting about the next company, you might have used fevicol once and the name is associated with the brand and the company which owns fevicol is a brand named Pidilite and they run their business in the adhesive and chemical sector where their market share is around 70%.

It was incorporated on 28th July 1969 after which they made there mark and now is the most trusted brand. The company's products like adhesive, ceilents, construction chemical 

The company has some big brands which are directly associated with the products like Drfixit, mseal, feviquick where Pidilite has a big name. The company has 9 regional offices with 23 brands and international manufacturing which is spread across the USA, Thailand, Dubai, Brazil.

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The company has been giving good returns to its investors in terms of revenue and profits because the company has been innovating itself according to the requirements due to which they have entered new segments and have brought new products from time to time to meet customer demands. The sales of the company have compounded by 8.5% in the past 5 years and for such a big company growing at this rate is a huge impact. 

Now if we speak about the company's profit, it has compounded by 18% in the past 5 years which is referred to as a positive sign. Pidilite has given a return of 10% in the past year and its market cap is around 85000 Cr. The PE ratio is around 85 meaning it has been trading on good premium valuations because of the huge market share and monopoly. You can assume that the company doesn't have debt, it is only negligible. The operating profit margin is around 23% which is a strong point and if sales are high, the profit will be high too.  

Strengths

  • The company has been maintaining a healthy ROE of 26.13% over the past 3 years.
  • The company has been maintaining a healthy ROCE of 35.88% over the past 3 years.
  • The company is virtually debt-free.
  • The company has a healthy interest coverage ratio of 108.24.
  • The Company has been maintaining an effective average operating margins of 22.68% in the last 5 years.
  • The company has an efficient Cash Conversion Cycle of 50.33 days.
  • The company has good cash flow management; CFO/PAT stands at 1.02.
  • The company has a high promoter holding of 70.19%.

Limitations

  • The company has shown a poor revenue growth of 9.18% for the past 3 years.
  • The company is trading at a high PE of 90.11.
  • The company is trading at a high EV/EBITDA of 57.39.


Key Ratios
 

Annual2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 
EBIT Margin (%)23.8322.7024.9725.5823.3015.8116.6818.7816.6318.0618.5111.0415.6313.8714.6113.9814.28
Pre Tax Margin (%)22.6922.5824.8623.5222.6015.2016.2718.5915.7616.7817.039.2414.5913.3314.4513.7614.00
After-Tax Margin (%)17.3916.0717.8315.9015.7811.4112.0813.8211.8712.8315.208.2812.2510.389.989.969.38
Return On Capital Employed (%)32.5331.5835.7635.4640.0828.7130.6734.8630.6729.5025.7615.8323.4926.2028.1924.8526.15
Return On Equity (%)24.6723.3926.8022.7628.1721.3622.9726.5924.2826.6631.3020.4129.4424.5721.9921.4219.82
Long Term Debt To Equity (%)-0.000.000.000.000.000.000.006.7022.8042.6264.6052.3818.106.4412.595.35
Sales (Cr)6,332.596,093.885,354.404,865.374,731.034,398.073,878.243,331.692,816.322,367.021,930.591,765.781,537.191,154.98908.05768.39653.93
Sales % Chg+4%+14%+10%+3%+8%+13%+16%+18%+19%+23%+9%+15%+33%+27%+18%+18%-
Net Income (Cr)1,101.62979.44955.19773.79746.72501.86468.61460.76334.51303.89293.50146.38188.35119.9390.6876.5861.40
NI % Chg+12%+3%+23%+4%+49%+7%+2%+38%+10%+4%+101%-22%+57%+32%+18%+25%-
Book Value/Share (INR)87.8782.4270.1866.3051.7045.8339.7833.7927.1322.5118.5314.1712.649.678.1770.8161.35
Return On Assets (%)18.9318.3020.6318.0121.5315.3616.2118.1514.5015.1915.979.0913.2414.2614.2113.6212.87
Asset Turnover Ratio (%)108.82113.90115.69113.26136.45134.61134.23131.25122.13118.38105.09109.71108.11137.42142.39136.68137.15
Inventory Turnover Ratio (%)8.678.308.498.759.578.237.637.387.116.687.707.715.795.845.925.916.24
Interest Coverage Ratio (%)112.66193.78220.68219.14188.7673.1966.7951.4019.1214.1812.506.1414.9625.5590.5564.3550.59
Dividend Payout Ratio (%)62.2531.1025.493.3154.1229.6229.5328.9228.8529.1425.8630.2523.5131.5634.7932.9532.88
Earning Retention Ratio (%)37.7568.9074.5196.6945.8870.3870.4771.0871.1570.8674.1469.7576.4968.4465.2167.0567.12
Current Ratio (X)2.573.023.003.392.461.721.841.761.511.781.391.821.781.801.852.192.03
Quick Ratio (X)1.952.262.292.681.771.081.191.151.001.130.831.221.110.940.931.201.16


Container Corporation of India.

Let's speak about the last company on the list named Container Corporation of India. It was established in 1966 and comes directly under the Ministry of Railways. It has a market share of 68% in its market segment and the government of India has a 54% stake in the company and the govt is planning to disinvest 30% of its stake and will maintain the rest 24%. The market cap is 25000 Cr and the PE ratio is around 35 as compared to the industry ratio of 22 which means it is a bit higher than the industry's ratio. The company has given a -24% return to its investors in the past year.

Strengths

  • The company has significantly decreased its debt by 700.65 Cr.
  • The company is virtually debt-free.
  • The company has a healthy interest coverage ratio of 15.37.
  • The Company has been maintaining an effective average operating margins of 23.79% in the last 5 years.
  • The company has an efficient Cash Conversion Cycle of -9.77 days.
  • The company has a healthy liquidity position with a current ratio of 2.54.
  • The company has good cash flow management; CFO/PAT stands at 2.40.
  • The company has a high promoter holding of 54.80%.
  • The company has a strong degree of Operating leverage, Average Operating leverage stands at 4.96.

Limitations

  • The company has shown a poor profit growth of -24.06% for the past 3 years.
  • The company has shown a poor revenue growth of 4.91% for the past 3 years.
  • The company is trading at a high PE of 43.43.


Key Ratios
 

Annual2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 
EBIT Margin (%)22.2624.5522.5021.1222.0823.2225.7627.5029.1027.5926.7329.8128.1628.9527.4030.4128.21
Pre Tax Margin (%)8.0924.5422.5021.0522.0823.2225.7627.5029.1027.5926.7329.8128.1628.9527.3930.3928.20
After Tax Margin (%)5.8017.6616.9615.3016.0518.7919.7521.3321.6122.8421.2223.1522.4723.1721.6021.4820.83
Return On Capital Employed (%)13.8215.9114.3912.9014.9316.3817.5018.3720.0420.0521.7225.6827.9831.4429.7732.8932.95
Return On Equity (%)3.7311.7211.149.6911.3913.7114.0914.9615.6517.5918.1421.0323.6226.7625.1425.2326.69
Long Term Debt To Equity (%)-0.000.000.000.000.000.000.000.000.000.000.000.000.000.000.620.87
Sales (Cr)6,473.796,881.916,157.165,606.135,921.735,573.704,984.554,406.164,060.953,834.853,705.683,417.163,347.303,037.292,433.161,995.121,764.43
Sales % Chg-6%+12%+10%-5%+6%+12%+13%+9%+6%+3%+8%+2%+10%+25%+22%+13%-
Net Income (Cr)375.781,215.411,044.46858.02950.821,047.55984.76940.03877.88875.95786.69791.20752.21703.82525.80428.60367.59
NI % Chg-69%+16%+22%-10%-9%+6%+5%+7%0+11%-1%+5%+7%+34%+23%+17%-
Book Value/Share (INR)165.19170.16153.84145.19136.98125.32114.65103.1092.0281.7071.1861.7552.2643.1734.3227.8822.61
Return On Assets (%)3.249.649.758.6310.0812.0512.2012.9613.5115.2115.1617.2519.2521.6220.2220.3320.52
Asset Turnover Ratio (%)55.9654.5857.5156.3962.7964.1361.7760.7662.4966.6071.4174.5185.7093.3493.6194.6898.49
Inventory Turnover Ratio (%)248.23296.00224.63248.72334.56331.37334.31363.24497.06612.60530.14672.67695.90658.85514.41590.27598.11
Interest Coverage Ratio (%)39.972,283.2715,397.11323.578,720.670.000.000.000.000.000.000.000.000.002,898.962,092.341,991.44
Dividend Payout Ratio (%)150.7915.0339.9034.3127.4724.9424.3524.1924.4323.0023.1323.0022.4620.3122.2421.9822.10
Earning Retention Ratio (%)-50.7984.9760.1065.6972.5375.0675.6575.8175.5777.0076.8777.0077.5479.6977.7678.0277.90
Current Ratio (X)2.542.372.973.421.934.344.545.325.485.884.093.513.542.982.472.382.51
Quick Ratio (X)2.512.362.953.391.914.314.525.305.475.874.083.513.532.972.452.372.50


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Disclaimer: We make all articles for educational purposes. We don't give any buy/sell recommendations. Before investing in any stock do your own research and then invest in the long term.

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