Mehabe score: 2 G Factor: 1 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 1 and Piotski score of 5.
Description
Reliance Industrial Infrastructure Limited is engaged in infrastructure activity in India. The Company is engaged in providing services of transportation of petroleum products and raw water through its pipelines.Site:RIILMain Symbol:RIIL
Stock trades at 694.0, above its 50dma 675.42. It also trades above its 200dma 506.09. The stock remains bullish on techicals
The 52 week high is at 866.00 and the 52week low is at 344.00
Price Chart
P/E Chart
Sales and Margin
Strengths
– is almost debt free.
– has been maintaining a healthy dividend payout of 47.40%
Weakness
– Stock is trading at 2.54 times its book value
-The company has delivered a poor sales growth of -11.80% over past five years.
-Tax rate seems low
– has a low return on equity of 2.55% for last 3 years.
-Earnings include an other income of Rs.18.01 Cr.
-Debtor days have increased from 102.13 to 132.26 days.
Competition
– The industry trades at a mean P/E of 13.8x. Rel. Indl. Infra trades at the industry’s max P/E of 104.82x. RIIL trades at a P/E of 105.0x
– Industry’s mean G-Factor is 3.8 while the mean Piotski score is 7.0. RIIL has a G-Factor of 1 and Piotski scoreof 5.
– Average 1 month return for industry is -4.5%. The max 1- month return was given by Larsen & Toubro: a return of 6.19 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 15.66 cr compared to Rs 12.94 cr for period ended Jun 2020, a rise of 21.0%
Operating Profits reported at Rs 0.85 cr for period ended Jun 2021 vis-vis 1.26 for period ended Jun 2020 .
Operating Margins contracted -430.9 bps for period ended Jun 2021 vis-vis Jun 2020 .
The EPS for Jun 2021 was Rs 1.59 compared to Rs 1.99 for previous quarter ended Mar 2021 and Rs 1.36 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 57.0 cr for period ended TTM vis-vis sales of Rs 54.0 cr for the period ended Mar 2021, a growth of 5.3%. The 3 year sales cagr stood at -12.5%.
Operating margins shrank to 9.0% for period ended TTM vis-vis 10.0% for period ended Mar 2021, contraction of 100.0 bps.
Net Profit reported at Rs 10.0 cr for period ended TTM vis-vis sales of Rs 10.0 cr for the period ended Mar 2021,
Company recorded a Net Profit CAGR of 3.6% 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 3.0% over the last 3 Years. – The stock has given a return of 68% 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 -21% vis-vis a compounded sales growth of -15% over the last 3 Years. – The compounded profit growth on a TTM basis is 4% vis-vis a compounded profit growth of -4% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Jun 2021 fii holding stood at 0.01% vis-vis 0.0% for Mar 2021 – Public shareholding has remained largely constant. The Jun 2021 public holding stood at 54.53% vis-vis 54.54% for Mar 2021
Conclusion
– is almost debt free.
– has been maintaining a healthy dividend payout of 47.40% – Stock is trading at 2.54 times its book value
-The company has delivered a poor sales growth of -11.80% over past five years.
-Tax rate seems low
– has a low return on equity of 2.55% for last 3 years.
-Earnings include an other income of Rs.18.01 Cr.
-Debtor days have increased from 102.13 to 132.26 days.
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 675.42 and is trading at 694.0 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
