Some companies whose quarterly results are worth raising a toast to

Techno Electric had pre-tax profit of Rs 94 cr in Q1, compared to Rs 66 cr in the preceding quarter

It is that time of the year when one is lost so deeply in the papers while appraising quarterly results that even when the wife says, “I am going to be away at my parents for a month”, all you can absent-mindedly respond with is a “good”.

These are some of the quarterly results worth raising a toast to: 

Avenue Supermarts: I have a home-grown theory when appraising the results of non-cyclical companies: If the profit of a quarter is considerably higher than the corresponding one of the previous year and, when annualised, higher than the profit reported in the past financial year, there is traction worth taking seriously. So it is with this company. Standalone profit before tax of Rs 268 crore in the first quarter of the current year, from Rs 183 crore in the first quarter of last year and Rs 747 crore for all of last year —that’s a pre-tax profit average of almostRs 3 crore a day, in a sector people gave up as impossible a few years ago.

The paper trio: Who would have thought paper companies would do a Lazarus (rise from the dead)? I have since emerged as an admirer of JK Paper, West Coast Paper and Ruchira Papers. JK Paper reported an Ebitda (earnings before interest, tax, depreciation and amortisation) of Rs 160 crore for the first quarter, with an interest cover that strengthened from two-plus to four, even as market capitalisation (m-cap) is a mere Rs 1,700 crore. West Coast Paper’s post-tax bottom line more than trebled during this period to Rs 54 crore; interest cover strengthened to around 11, outstanding for a capex-heavy sector, against an m-cap of Rs 1,250 crore. Ruchira Papers reported a pre-tax profit of Rs 18 crore (Rs 11 crore in the first quarter of last year), with a stunning interest cover of 12, against an m-cap of Rs 335 crore.

Techno Electric: I am in love with this company. It reports a pre-tax profit of Rs 94 crore in the first quarter, compared to Rs 66 crore in the immediately preceding quarter, with a net interest income. The company completed a buyback a few months ago. There is a case that the m-cap of Rs 4,100 crore is a trifle on the lower side for a company that possesses a large order book, is perpetually cash-rich and looks like a ‘happily forever’ kind of story, as long as the country keeps expanding its power transmission network. 

Prakash Industries: Even as the company has been in the news for the wrong reasons, it would serve to see what it has achieved — turnover sequence of Rs 501 crore, Rs 469 crore, Rs 627 crore and Rs 650 crore in the past four quarters, respectively, corresponded by an earnings before interest and taxes (Ebit) sequence of Rs 31 crore, Rs 37 crore, Rs 63 crore and Rs 82 crore, respectively. Interest cover has doubled during this period, to a shade more than four. Will track this company closely.

The author is a stock market writer, tracking corporate earnings and investor psychology to gauge where markets are not headed