Mehabe score: 3 G Factor: 3 Piotski Score: 5 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 5.
Description
MRO-TEK Realty Ltd is engaged in manufacture and supply, as well as distribution of Access and Networking equipment & Solutions.#
Main Points
Products Segment (22% of revenues)#
This is the core business of the company. The segment’s revenues declined from 19 crores in FY19 to 9 crores in FY20 due to the heavy disruptions in the industry which adversely affected the company’s customers.#
It also introduced new products in its protfolio such as Industrial grade switches, L2/L3 switches, coach switches and fibre/ IP modems.Site:MRO-TEK
Market Cap:
Rs 61.2 cr
Price:
32.8
Trading pe:
x
Book-value:
-3.24/share
Div yield:
0.00 %
Earning yield:
-3.52%
Face-value:
5.00/share
52week high:
40.70
52week low:
18.10
Technical Analysis
Stock trades at 32.8, above its 50dma 28.26. It also trades above its 200dma 27.14. The stock remains bullish on techicals
The 52 week high is at 40.70 and the 52week low is at 18.10
Price Chart
P/E Chart
Sales and Margin
Strengths
– Debtor days have improved from 59.49 to 45.97 days.
Weakness
– has low interest coverage ratio.
-The company has delivered a poor sales growth of -6.08% over past five years.
– has a low return on equity of -44.67% for last 3 years.
Competition
– The industry trades at a mean P/E of 127.7x. Cerebra Integr. trades at the industry’s max P/E of 432.04x. MRO-TEK trades at a P/E of x
– Industry’s mean G-Factor is 3.4 while the mean Piotski score is 8.0. MRO-TEK has a G-Factor of 3 and Piotski scoreof 5.
– Average 1 month return for industry is 25.8%. The max 1- month return was given by HCL Infosystems: a return of 61.4 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 9.61 cr compared to Rs 6.52 cr for period ended Mar 2020, a rise of 47.4%
Company reported operating profit of Rs 0.09 cr for period ended Mar 2021, operating profit margin at 0.9 %.
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 -0.63 compared to Rs -0.97 for previous quarter ended Dec 2020 and Rs -1.94 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 31.62 cr for period ended Mar 2021 vis-vis sales of Rs 41.05 cr for the period ended Mar 2020, a fall of 29.8%. The 3 year sales cagr stood at -4.4%.
Operating margins shrank to -3.42% for period ended Mar 2021 vis-vis 2.53% for period ended Mar 2020, contraction of 595.0 bps.
Net Profit reported at Rs -7.46 cr for period ended Mar 2021 vis-vis sales of Rs -5.21 cr for the period ended Mar 2020, falling 0%.
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities: Rs 0.0 cr for period ended Mar 2021 vis-vis Rs -15.26 cr for period ended Mar 2020
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 -506.0% compared to -45.0% over the last 3 Years. – The stock has given a return of 34% on a 1 Year basis vis-vis a return of -8% over the last 3 Years. – The compounded sales growth on a TTM bassis is -28% vis-vis a compounded sales growth of 3% over the last 3 Years. – The compounded profit growth on a TTM basis is -120% vis-vis a compounded profit growth of % over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Mar 2021 public holding stood at 45.21% vis-vis 45.53% for Dec 2020
Conclusion
– Debtor days have improved from 59.49 to 45.97 days. – has low interest coverage ratio.
-The company has delivered a poor sales growth of -6.08% over past five years.
– has a low return on equity of -44.67% 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 28.26 and is trading at 32.8 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
