Mehabe score: 4 G Factor: 4 Piotski Score: 5 The stock has a rating 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 4 and Piotski score of 5.
Description
RS Software (India) is engaged in development, testing and maintenance of software for its clients based in different geographies.(Source : 201903 Annual Report Page No: 142)Site:RSSOFTWAREMain Symbol:RSSOFTWARE
Stock trades at 45.2, above its 50dma 33.56. It also trades above its 200dma 30.36. The stock remains bullish on techicals
The 52 week high is at 46.00 and the 52week low is at 18.25
Price Chart
P/E Chart
Sales and Margin
Strengths
– is almost debt free.
Weakness
– has low interest coverage ratio.
-The company has delivered a poor sales growth of -28.52% over past five years.
– has a low return on equity of -35.68% for last 3 years.
-Debtor days have increased from 58.14 to 105.51 days.
Competition
– The industry trades at a mean P/E of 29.5x. Happiest Minds trades at the industry’s max P/E of 119.87x. RSSOFTWARE trades at a P/E of x
– Industry’s mean G-Factor is 3.6 while the mean Piotski score is 9.0. RSSOFTWARE has a G-Factor of 4 and Piotski scoreof 5.
– Average 1 month return for industry is 2.2%. The max 1- month return was given by R S Software (I): a return of 24.35 %
Quarterly Results
Sales for period ended Sep 2021 is Rs 7.32 cr compared to Rs 9.21 cr for period ended Sep 2020, a fall of 20.5%
Company reported negative operating profit of Rs -3.0 cr for period ended Sep 2021. For same period last year, operating profit was -4.23
The EPS for Sep 2021 was Rs -0.93 compared to Rs -0.21 for previous quarter ended Jun 2021 and Rs -1.84 for Sep 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 33.0 cr for period ended TTM vis-vis sales of Rs 35.0 cr for the period ended Mar 2021, a fall of 6.1%. The 3 year sales cagr stood at -20.2%.
Operating margins expanded to -43.0% for period ended TTM vis-vis -50.0% for period ended Mar 2021, expansion of 700.0 bps.
Net Profit reported at Rs -13.0 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: Rs -15.0 cr for period ended Mar 2021 vis-vis Rs -41.0 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 -32.0% compared to -36.0% over the last 3 Years. – The stock has given a return of 121% on a 1 Year basis vis-vis a return of 12% over the last 3 Years. – The compounded sales growth on a TTM bassis is -36% vis-vis a compounded sales growth of -18% over the last 3 Years. – The compounded profit growth on a TTM basis is 78% vis-vis a compounded profit growth of 10% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Sep 2021 fii holding stood at 1.95% vis-vis 1.95% for Jun 2021 – Public shareholding has remained largely constant. The Sep 2021 public holding stood at 57.32% vis-vis 57.32% for Jun 2021
Conclusion
– is almost debt free. – has low interest coverage ratio.
-The company has delivered a poor sales growth of -28.52% over past five years.
– has a low return on equity of -35.68% for last 3 years.
-Debtor days have increased from 58.14 to 105.51 days.
The business fundamentals of the stock remain stable. Stronger near term results will build interest in the stock. We suggest to wait for a upturn in business performance.
Technically, the stock remains above its 50 DMA 33.56 and is trading at 45.2, thus bullish price action wise.
