Mehabe score: 3 G Factor: 3 Piotski Score: 8 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 3 and Piotski score of 8.
Description
Nirlon Ltd is in business of development and management of the Industrial Park / Information Technology (IT) Park, i.e. Nirlon Knowledge Park (NKP) – Goregaon (East), Mumbai#
Main Points
Nirlon Knowledge Park
The company is the owner of Nirlon Knowledge Park which is an industrial park with an approx 223 acre campus.
A total of approx. 29.46 lakh sq. ft. area has been constructed in Phases 1, 2, 3 and 4 of the knowledge park corresponding to approx. 18.78 lakh sq. ft. of licensable area.Site:500307
Market Cap:
Rs 2,736 cr
Price:
304.0
Trading pe:
21.4x
Book-value:
56.9/share
Div yield:
0.25 %
Earning yield:
5.25%
Face-value:
10.0/share
52week high:
319.80
52week low:
225.25
Technical Analysis
Stock trades at 304.0, above its 50dma 289.55. It also trades above its 200dma 271.11. The stock remains bullish on techicals
The 52 week high is at 319.80 and the 52week low is at 225.25
Price Chart
P/E Chart
Sales and Margin
Strengths
– has delivered good profit growth of 31.45% CAGR over last 5 years
-‘s median sales growth is 15.84% of last 10 years
Weakness
– The company has delivered a poor sales growth of 5.34% over past five years.
– might be capitalizing the interest cost
Competition
– The industry trades at a mean P/E of 42.4x. Phoenix Mills trades at the industry’s max P/E of 266.95x. 500307 trades at a P/E of 21.4x
– Industry’s mean G-Factor is 3.2 while the mean Piotski score is 8.0. 500307 has a G-Factor of 3 and Piotski scoreof 8.
– Average 1 month return for industry is 8.2%. The max 1- month return was given by NBCC: a return of 18.12 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 77.0 cr compared to Rs 82.0 cr for period ended Mar 2020, a fall of 6.1%
Operating Profits reported at Rs 55.0 cr for period ended Mar 2021 vis-vis 59.0 for period ended Mar 2020 .
Operating Margins contracted -52.3 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 3.19 compared to Rs 3.64 for previous quarter ended Dec 2020 and Rs 3.26 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 317.0 cr for period ended Mar 2021 vis-vis sales of Rs 310.0 cr for the period ended Mar 2020, a growth of 2.2%. The 3 year sales cagr stood at 2.9%.
Net Profit reported at Rs 127.0 cr for period ended Mar 2021 vis-vis sales of Rs 109.0 cr for the period ended Mar 2020, rising 14.2%.
Company recorded a healthy Net Profit CAGR of 31.4% 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 improved its Return on Equity (RoE) metric. The RoE on Last Year basis was 27.0% compared to 22.0% over the last 3 Years. – The stock has given a return of 31% 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 6% vis-vis a compounded sales growth of 3% over the last 3 Years. – The compounded profit growth on a TTM basis is 35% vis-vis a compounded profit growth of 29% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2021 fii holding stood at 13.15% vis-vis 12.93% for Dec 2020 – Public shareholding has remained largely constant. The Mar 2021 public holding stood at 15.78% vis-vis 15.98% for Dec 2020
Conclusion
– has delivered good profit growth of 31.45% CAGR over last 5 years
-‘s median sales growth is 15.84% of last 10 years – The company has delivered a poor sales growth of 5.34% over past five years.
– might be capitalizing the interest cost
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 289.55 and is trading at 304.0 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
