Mehabe score: 4 G Factor: 5 Piotski Score: 2 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 5 and Piotski score of 2.
Description
Palash Securities is engaged in the business of Other financial service activities, except in insurance and pension funding activities and Real Estate Activities.(Source : 201903 Annual Report Page No:32)Site:PALASHSECUMain Symbol:PALASHSEC
Stock trades at 77.8, above its 50dma 73.89. It also trades above its 200dma 55.91. The stock remains bullish on techicals
The 52 week high is at 93.50 and the 52week low is at 24.05
Price Chart
P/E Chart
Sales and Margin
Strengths
– is almost debt free.
-Stock is trading at 0.28 times its book value
– is expected to give good quarter
Weakness
– has low interest coverage ratio.
– has a low return on equity of -1.57% for last 3 years.
Competition
– The industry trades at a mean P/E of 27.1x. SBI Cards trades at the industry’s max P/E of 110.2x. PALASHSECU trades at a P/E of x
– Industry’s mean G-Factor is 3.2 while the mean Piotski score is 6.0. PALASHSECU has a G-Factor of 5 and Piotski scoreof 2.
– Average 1 month return for industry is 5.8%. The max 1- month return was given by Bajaj Finserv: a return of 21.65 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 18.32 cr compared to Rs 13.11 cr for period ended Mar 2020, a rise of 39.7%
Company reported negative operating profit of Rs -8.6 cr for period ended Mar 2021. For same period last year, operating profit was -1.4
The EPS for Mar 2021 was Rs -9.06 compared to Rs -2.29 for previous quarter ended Dec 2020 and Rs -1.7 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 59.0 cr for period ended Mar 2021 vis-vis sales of Rs 46.0 cr for the period ended Mar 2020, a healthy growth of 22.0%. The 3 year sales cagr stood at 11.1%.
Operating margins shrank to -19.0% for period ended Mar 2021 vis-vis -2.0% for period ended Mar 2020, contraction of 1700.0 bps.
Net Profit reported at Rs -13.0 cr for period ended Mar 2021 vis-vis sales of Rs -2.0 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 -6.0% compared to -2.0% over the last 3 Years. – The stock has given a return of 205% on a 1 Year basis vis-vis a return of 18% over the last 3 Years. – The compounded sales growth on a TTM bassis is 28% vis-vis a compounded sales growth of 11% over the last 3 Years. – The compounded profit growth on a TTM basis is -565% vis-vis a compounded profit growth of % over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has risen for the period ended Jun 2021. The Jun 2021 public holding stood at 32.16% vis-vis 29.87% for Mar 2021
Conclusion
– is almost debt free.
-Stock is trading at 0.28 times its book value
– is expected to give good quarter – has low interest coverage ratio.
– has a low return on equity of -1.57% 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 73.89 and is trading at 77.8 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
