Mehabe score: 4 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
Gromo Trade & Consultancy is engaged in the Commodity Business and Finance Business.(Source : 201903 Annual Report Page No: 51)Site:501314
Market Cap:
Rs 197 cr
Price:
69.2
Trading pe:
302.0x
Book-value:
14.7/share
Div yield:
0.00 %
Earning yield:
0.49%
Face-value:
10.0/share
52week high:
80.35
52week low:
5.26
Technical Analysis
Stock trades at 69.2, above its 50dma 66.18. It also trades above its 200dma 51.96. The stock remains bullish on techicals
The 52 week high is at 80.35 and the 52week low is at 5.26
Price Chart
P/E Chart
Sales and Margin
Strengths
– is almost debt free.
Weakness
– Stock is trading at 4.71 times its book value
-Though the company is reporting repeated profits, it is not paying out dividend
-Promoter holding is low: 1.40%
– has a low return on equity of 1.54% for last 3 years.
Competition
– The industry trades at a mean P/E of 41.2x. Prismx Global trades at the industry’s max P/E of 302.46x. 501314 trades at a P/E of 302.0x
– Industry’s mean G-Factor is 3.9 while the mean Piotski score is 7.0. 501314 has a G-Factor of 2 and Piotski scoreof 6.
– Average 1 month return for industry is 8.1%. The max 1- month return was given by Redington India: a return of 45.86 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 2.33 cr compared to Rs 18.22 cr for period ended Mar 2020, a fall of 87.2%
Company reported operating profit of Rs 0.37 cr for period ended Mar 2021, operating profit margin at 15.9 %.
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 0.09 compared to Rs 0.15 for previous quarter ended Dec 2020 and Rs -0.15 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 7.92 cr for period ended Mar 2021 vis-vis sales of Rs 22.31 cr for the period ended Mar 2020, a fall of 181.7%. The 3 year sales cagr stood at -34.1%.
Operating margins expanded to 18.18% for period ended Mar 2021 vis-vis 5.65% for period ended Mar 2020, expansion of 1253.0 bps.
Net Profit reported at Rs 1.34 cr for period ended Mar 2021 vis-vis sales of Rs 0.97 cr for the period ended Mar 2020, rising 27.6%.
Company recorded a healthy Net Profit CAGR of 137.5% 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 had stable/constant Return on Equity (RoE) metric. The RoE on Last Year basis was 2.0% compared to 2.0% over the last 3 Years. – The stock has given a return of 1148% on a 1 Year basis vis-vis a return of -48% over the last 3 Years. – The compounded sales growth on a TTM bassis is -24% vis-vis a compounded sales growth of 4% over the last 3 Years. – The compounded profit growth on a TTM basis is -36% vis-vis a compounded profit growth of 219% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Mar 2021 public holding stood at 98.6% vis-vis 98.6% for Dec 2020
Conclusion
– is almost debt free. – Stock is trading at 4.71 times its book value
-Though the company is reporting repeated profits, it is not paying out dividend
-Promoter holding is low: 1.40%
– has a low return on equity of 1.54% for last 3 years.
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 66.18 and is trading at 69.2 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
