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Our Rating: OBSERVE & HOLD
Mehabe score: 1 G Factor: 1 Piotski Score: 4 The stock has a rating OBSERVE & HOLD. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 1 and Piotski score of 4.
Description
Dewan Housing Finance Corporation’s main business is of providing loans to Retail customers for construction or purchase of residential property, loans against property,Site:DHFL
Market Cap:
Rs 595 cr
Price:
19.0
Trading pe:
x
Book-value:
-243/share
Div yield:
0.00 %
Earning yield:
-36.97%
Face-value:
10.0/share
52week high:
43.00
52week low:
12.01
Technical Analysis
Stock trades at 19.0, above its 50dma 16.88. However it is trading below its 200dma 20.19. The stock remains weak though short term bullish momentum supports price action. It needs to close above 20.19 for bullish price action to continue
The 52 week high is at 43.00 and the 52week low is at 12.01
Price Chart
P/E Chart
Sales and Margin
Strengths
–
Weakness
– has low interest coverage ratio.
-The company has delivered a poor sales growth of 8.29% over past five years.
– has a low return on equity of -72.83% for last 3 years.
-Contingent liabilities of Rs.2265.76 Cr.
-Promoters have pledged 100.00% of their holding.
Competition
– The industry trades at a mean P/E of 22.4x. AAVAS Financiers trades at the industry’s max P/E of 65.69x. DHFL trades at a P/E of x
– Industry’s mean G-Factor is 4.2 while the mean Piotski score is 8.0. DHFL has a G-Factor of 1 and Piotski scoreof 4.
– Average 1 month return for industry is 33.2%. The max 1- month return was given by PNB Housing: a return of 128.33 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 2035.0 cr compared to Rs 2623.0 cr for period ended Mar 2020, a fall of 22.4%
Company reported operating profit of Rs 280.0 cr for period ended Mar 2021, operating profit margin at 13.8 %.
Operating profit was negative for the same period last year thus company has improved its margins this year
The EPS for Mar 2021 was Rs 3.08 compared to Rs -417.29 for previous quarter ended Dec 2020 and Rs -239.21 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 8771.0 cr for period ended Mar 2021 vis-vis sales of Rs 9558.0 cr for the period ended Mar 2020, a fall of 9.0%. The 3 year sales cagr stood at -6.8%.
Operating margins shrank to -226.0% for period ended Mar 2021 vis-vis -128.0% for period ended Mar 2020, contraction of 9800.0 bps.
Net Profit reported at Rs -15051.0 cr for period ended Mar 2021 vis-vis sales of Rs -13456.0 cr for the period ended Mar 2020, falling 0%.
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has worsened on its Return on Equity (RoE) metric. The RoE on Last Year basis was -1125.0% compared to -73.0% over the last 3 Years. – The stock has given a return of 30% on a 1 Year basis vis-vis a return of -69% over the last 3 Years. – The compounded sales growth on a TTM bassis is -5% vis-vis a compounded sales growth of -6% over the last 3 Years. – The compounded profit growth on a TTM basis is -180% vis-vis a compounded profit growth of % over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2021 fii holding stood at 1.92% vis-vis 2.47% for Dec 2020 – Public shareholding has remained largely constant. The Mar 2021 public holding stood at 55.42% vis-vis 54.87% for Dec 2020
Conclusion
– – has low interest coverage ratio.
-The company has delivered a poor sales growth of 8.29% over past five years.
– has a low return on equity of -72.83% for last 3 years.
-Contingent liabilities of Rs.2265.76 Cr.
-Promoters have pledged 100.00% of their holding.
Fundamentally, the stock remains weak on business fundamentals. Weak near term results have dampened and questioned business drivers. We suggest to wait for a upturn in business performance.
Technically, the stock trades above its 50 DMA 16.88 and is trading at 19.0 It has shown near term bullish momentum contrary to business fundamentals. We suggest to observe price action. However as investors, who like to avoid timing the markets, we suggest to avoid the stock
