Mehabe score: 2 G Factor: 2 Piotski Score: 6 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 2 and Piotski score of 6.
Description
Kellton Tech Solutions Limited is a software development company.Site:KELLTONTEC
Market Cap:
Rs 848 cr
Price:
88.0
Trading pe:
12.7x
Book-value:
46.7/share
Div yield:
0.00 %
Earning yield:
10.28%
Face-value:
5.00/share
52week high:
92.00
52week low:
13.50
Technical Analysis
Stock trades at 88.0, above its 50dma 71.71. It also trades above its 200dma 60.82. The stock remains bullish on techicals
The 52 week high is at 92.00 and the 52week low is at 13.50
Price Chart
P/E Chart
Sales and Margin
Strengths
– has a good return on equity (ROE) track record: 3 Years ROE 24.31%
Weakness
– Though the company is reporting repeated profits, it is not paying out dividend
-Promoter holding has decreased over last 3 years: -4.71%
Competition
– The industry trades at a mean P/E of 32.1x. Happiest Minds trades at the industry’s max P/E of 85.01x. KELLTONTEC trades at a P/E of 12.7x
– Industry’s mean G-Factor is 3.6 while the mean Piotski score is 9.0. KELLTONTEC has a G-Factor of 2 and Piotski scoreof 6.
– Average 1 month return for industry is 16.4%. The max 1- month return was given by Kellton Tech: a return of 37.93 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 208.0 cr compared to Rs 206.0 cr for period ended Mar 2020, a rise of 1.0%
Operating Profits reported at Rs 29.0 cr for period ended Mar 2021 vis-vis 24.0 for period ended Mar 2020 .
Operating Margins expanded 229.2 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 1.96 compared to Rs 2.27 for previous quarter ended Dec 2020 and Rs 1.51 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 776.0 cr for period ended Mar 2021 vis-vis sales of Rs 771.0 cr for the period ended Mar 2020, a growth of 0.6%. The 3 year sales cagr stood at -0.3%.
Operating margins shrank to 14.0% for period ended Mar 2021 vis-vis 15.0% for period ended Mar 2020, contraction of 100.0 bps.
Net Profit reported at Rs 71.0 cr for period ended Mar 2021 vis-vis sales of Rs 71.0 cr for the period ended Mar 2020,
Company recorded a Net Profit CAGR of 1.4% over the last 3 years
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 19.0% compared to 24.0% over the last 3 Years. – The stock has given a return of 505% on a 1 Year basis vis-vis a return of 17% over the last 3 Years. – The compounded sales growth on a TTM bassis is 3% vis-vis a compounded sales growth of 8% over the last 3 Years. – The compounded profit growth on a TTM basis is -12% vis-vis a compounded profit growth of 10% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2021 fii holding stood at 1.34% vis-vis 0.09% for Dec 2020 – Public shareholding has remained largely constant. The Mar 2021 public holding stood at 42.5% vis-vis 43.75% for Dec 2020
Conclusion
– has a good return on equity (ROE) track record: 3 Years ROE 24.31% – Though the company is reporting repeated profits, it is not paying out dividend
-Promoter holding has decreased over last 3 years: -4.71%
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 71.71 and is trading at 88.0 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
