Mehabe score: 6 G Factor: 3 Piotski Score: 3 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 3.
Description
Narayana Hrudayalaya is engaged in providing economical healthcare services.(Source : 202003-01 Annual Report Page No:131)Site:NHMain Symbol:NH
Stock trades at 540.0, above its 50dma 482.1. It also trades above its 200dma 430.0. The stock remains bullish on techicals
The 52 week high is at 566.70 and the 52week low is at 289.50
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
– is expected to give good quarter
-‘s median sales growth is 21.44% of last 10 years
Weakness
– Stock is trading at 9.86 times its book value
-The company has delivered a poor sales growth of 9.86% over past five years.
– has a low return on equity of 5.29% for last 3 years.
Competition
– The industry trades at a mean P/E of 36.3x. Max Healthcare trades at the industry’s max P/E of 952.26x. NH trades at a P/E of 60.8x
– Industry’s mean G-Factor is 4.7 while the mean Piotski score is 9.0. NH has a G-Factor of 3 and Piotski scoreof 3.
– Average 1 month return for industry is 6.4%. The max 1- month return was given by Dr Lal Pathlabs: a return of 14.67 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 860.0 cr compared to Rs 394.0 cr for period ended Jun 2020, a rise of 118.3%
Company reported operating profit of Rs 132.0 cr for period ended Jun 2021, operating profit margin at 15.3 %.
Operating profit was negative for the same period last year thus company has improved its margins this year
The EPS for Jun 2021 was Rs 3.73 compared to Rs 3.33 for previous quarter ended Mar 2021 and Rs -5.86 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 3049.0 cr for period ended TTM vis-vis sales of Rs 2582.0 cr for the period ended Mar 2021, a healthy growth of 15.3%. The 3 year sales cagr stood at 2.1%.
Operating margins expanded to 13.0% for period ended TTM vis-vis 7.0% for period ended Mar 2021, expansion of 600.0 bps.
Net Profit reported at Rs 182.0 cr for period ended TTM vis-vis sales of Rs -14.0 cr for the period ended Mar 2021, rising 107.7%.
Company recorded a healthy Net Profit CAGR of 45.6% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
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 -1.0% compared to 5.0% over the last 3 Years. – The stock has given a return of 78% on a 1 Year basis vis-vis a return of 29% over the last 3 Years. – The compounded sales growth on a TTM bassis is 11% vis-vis a compounded sales growth of 4% over the last 3 Years. – The compounded profit growth on a TTM basis is 900% vis-vis a compounded profit growth of % over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Jun 2021 fii holding stood at 10.12% vis-vis 10.96% for Mar 2021 – Public shareholding has remained largely constant. The Jun 2021 public holding stood at 5.27% vis-vis 4.89% for Mar 2021
Conclusion
– has reduced debt.
– is expected to give good quarter
-‘s median sales growth is 21.44% of last 10 years – Stock is trading at 9.86 times its book value
-The company has delivered a poor sales growth of 9.86% over past five years.
– has a low return on equity of 5.29% 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 482.1 and is trading at 540.0 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
