Mehabe score: 4 G Factor: 3 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 3 and Piotski score of 6.
Description
Helpage Finlease is engaged in the business of Business of Providing Loans & Advances.Site:539174Main Symbol:HELPAGE
Stock trades at 12.5, above its 50dma 11.62. However it is trading below its 200dma 13.35. The stock remains weak though short term bullish momentum supports price action. It needs to close above 13.35 for bullish price action to continue
The 52 week high is at 13.70 and the 52week low is at 7.05
Price Chart
P/E Chart
Sales and Margin
Strengths
– Stock is trading at 0.94 times its book value
Weakness
– Though the company is reporting repeated profits, it is not paying out dividend
– has low interest coverage ratio.
-Promoter holding is low: 32.62%
– has a low return on equity of 3.40% for last 3 years.
– might be capitalizing the interest cost
– has high debtors of 742.41 days.
Competition
– The industry trades at a mean P/E of 24.9x. SBI Cards trades at the industry’s max P/E of 107.91x. 539174 trades at a P/E of 26.4x
– Industry’s mean G-Factor is 2.9 while the mean Piotski score is 6.0. 539174 has a G-Factor of 3 and Piotski scoreof 6.
– Average 1 month return for industry is 4.2%. The max 1- month return was given by Bajaj Finserv: a return of 10.8 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 0.77 cr compared to Rs 0.67 cr for period ended Mar 2020, a rise of 14.9%
Operating Profits reported at Rs 0.71 cr for period ended Mar 2021 vis-vis 0.57 for period ended Mar 2020 .
Operating Margins expanded 713.3 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 0.17 compared to Rs 0.08 for previous quarter ended Dec 2020 and Rs 0.11 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 2.94 cr for period ended Mar 2021 vis-vis sales of Rs 2.75 cr for the period ended Mar 2020, a growth of 6.5%. The 3 year sales cagr stood at 52.4%.
Operating margins shrank to 84.01% for period ended Mar 2021 vis-vis 85.09% for period ended Mar 2020, contraction of 108.0 bps.
Net Profit reported at Rs 0.47 cr for period ended Mar 2021 vis-vis sales of Rs 0.48 cr for the period ended Mar 2020, falling 2.1%.
Company recorded a healthy Net Profit CAGR of 111.0% 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 had stable/constant Return on Equity (RoE) metric. The RoE on Last Year basis was 4.0% compared to 3.0% over the last 3 Years. – The stock has given a return of 9% on a 1 Year basis vis-vis a return of 0% over the last 3 Years. – The compounded sales growth on a TTM bassis is 7% vis-vis a compounded sales growth of 52% over the last 3 Years. – The compounded profit growth on a TTM basis is -2% vis-vis a compounded profit growth of 111% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Jun 2021 public holding stood at 67.38% vis-vis 67.38% for Mar 2021
Conclusion
– Stock is trading at 0.94 times its book value – Though the company is reporting repeated profits, it is not paying out dividend
– has low interest coverage ratio.
-Promoter holding is low: 32.62%
– has a low return on equity of 3.40% for last 3 years.
– might be capitalizing the interest cost
– has high debtors of 742.41 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 11.62 and is trading at 12.5 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
