Mehabe score: 5 G Factor: 1 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 1 and Piotski score of 6.
Description
Frontier Informatics Ltd. engages as a Software Development company in India. The company offers Onsite Consultancy Services, Offshore Software Development, Product Development and Internet enabled Services.Site:531225Main Symbol:XTGLOBAL
Stock trades at 40.8, above its 50dma 35.44. It also trades above its 200dma 27.9. The stock remains bullish on techicals
The 52 week high is at 46.45 and the 52week low is at 14.25
Price Chart
P/E Chart
Sales and Margin
Strengths
– is expected to give good quarter
Weakness
– Though the company is reporting repeated profits, it is not paying out dividend
– might be capitalizing the interest cost
-Earnings include an other income of Rs.14.92 Cr.
Competition
– The industry trades at a mean P/E of 35.3x. Happiest Minds trades at the industry’s max P/E of 137.18x. 531225 trades at a P/E of 52.5x
– Industry’s mean G-Factor is 3.1 while the mean Piotski score is 9.0. 531225 has a G-Factor of 1 and Piotski scoreof 6.
– Average 1 month return for industry is 15.1%. The max 1- month return was given by L&T Technology: a return of 24.75 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 51.51 cr compared to Rs 43.82 cr for period ended Jun 2020, a rise of 17.5%
Operating Profits reported at Rs 5.39 cr for period ended Jun 2021 vis-vis 0.25 for period ended Jun 2020 .
Operating Margins expanded 989.3 bps for period ended Jun 2021 vis-vis Jun 2020 .
The EPS for Jun 2021 was Rs 0.2 compared to Rs 0.36 for previous quarter ended Mar 2021 and Rs -0.02 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 189.0 cr for period ended TTM vis-vis sales of Rs 181.0 cr for the period ended Mar 2021, a growth of 4.2%.
Operating margins expanded to 10.0% for period ended TTM vis-vis 7.0% for period ended Mar 2021, expansion of 300.0 bps.
Net Profit reported at Rs 23.0 cr for period ended TTM vis-vis sales of Rs 20.0 cr for the period ended Mar 2021, rising 0%.
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 19.0 cr for period ended Mar 2021 vis-vis Rs 17.0 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 improved its Return on Equity (RoE) metric. The RoE on Last Year basis was 14.0% compared to 0% over the last 3 Years. – The stock has given a return of 161% on a 1 Year basis vis-vis a return of 139% over the last 3 Years. – The compounded sales growth on a TTM bassis is -7% vis-vis a compounded sales growth of % over the last 3 Years. – The compounded profit growth on a TTM basis is 140% 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 0.42% vis-vis 0.0% for Mar 2021 – Public shareholding has remained largely constant. The Jun 2021 public holding stood at 29.99% vis-vis 30.41% for Mar 2021
Conclusion
– is expected to give good quarter – Though the company is reporting repeated profits, it is not paying out dividend
– might be capitalizing the interest cost
-Earnings include an other income of Rs.14.92 Cr.
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 35.44 and is trading at 40.8 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
