Mehabe score: 2 G Factor: 1 Piotski Score: 4 The stock has a rating SELL. 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 4.
Description
Star Delta Transformers Ltd (SDTL) is a leader in the manufacturing, supplying, erecting, testing and commissioning of Power and Distribution transformers since last 35 years. SDTL is an ISO 9001-2008 certified company and follow structured processes for the entire business processes right from the basic design to manufacturing and installation as our continuous drive towards total Quality Management Systems.Site:539255Main Symbol:STARDELTA
Stock trades at 80.7, below its 50dma 85.13 and below its 200dma 85.91. The stock remains bearish on technicals
The 52 week high is at 107.30 and the 52week low is at 67.50
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
– is almost debt free.
-Stock is trading at 0.46 times its book value
Weakness
– Though the company is reporting repeated profits, it is not paying out dividend
-The company has delivered a poor sales growth of -24.02% over past five years.
– has a low return on equity of 8.07% for last 3 years.
-Contingent liabilities of Rs.17.87 Cr.
-Earnings include an other income of Rs.3.61 Cr.
– has high debtors of 193.37 days.
Competition
– The industry trades at a mean P/E of 28.3x. A B B trades at the industry’s max P/E of 140.33x. 539255 trades at a P/E of 13.8x
– Industry’s mean G-Factor is 2.9 while the mean Piotski score is 7.0. 539255 has a G-Factor of 1 and Piotski scoreof 4.
– Average 1 month return for industry is 4.0%. The max 1- month return was given by CG Power & Indu.: a return of 35.26 %
Quarterly Results
Sales for period ended Sep 2021 is Rs 5.51 cr compared to Rs 1.73 cr for period ended Sep 2020, a rise of 218.5%
Company reported operating profit of Rs 0.23 cr for period ended Sep 2021, operating profit margin at 4.2 %.
Operating profit was negative for the same period last year thus company has improved its margins this year
The EPS for Sep 2021 was Rs 1.33 compared to Rs 1.1 for previous quarter ended Jun 2021 and Rs 1.3 for Sep 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 23.49 cr for period ended TTM vis-vis sales of Rs 18.46 cr for the period ended Mar 2021, a healthy growth of 21.4%. The 3 year sales cagr stood at -39.8%.
Operating margins expanded to 2.34% for period ended TTM vis-vis -1.68% for period ended Mar 2021, expansion of 402.0 bps.
Net Profit reported at Rs 1.76 cr for period ended TTM vis-vis sales of Rs 1.77 cr for the period ended Mar 2021, falling 0.6%.
Company reported a poor Net Profit CAGR of -32.1% 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 worsened on its Return on Equity (RoE) metric. The RoE on Last Year basis was 3.0% compared to 8.0% over the last 3 Years. – The stock has given a return of -27% 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 -43% vis-vis a compounded sales growth of -32% over the last 3 Years. – The compounded profit growth on a TTM basis is -39% vis-vis a compounded profit growth of -7% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Sep 2021 public holding stood at 25.01% vis-vis 25.01% for Jun 2021
Conclusion
– has reduced debt.
– is almost debt free.
-Stock is trading at 0.46 times its book value – Though the company is reporting repeated profits, it is not paying out dividend
-The company has delivered a poor sales growth of -24.02% over past five years.
– has a low return on equity of 8.07% for last 3 years.
-Contingent liabilities of Rs.17.87 Cr.
-Earnings include an other income of Rs.3.61 Cr.
– has high debtors of 193.37 days.
Fundamentally, the stock remains weak. The business fundamentals are on shaky ground. Weak near term results have dampened and questioned business drivers. We suggest to wait for a upturn in business performance.
Technically, the stock reflects the poor fundamentals. The stock remains below its 50 DMA 85.13 and is trading at 80.7. It has shown near term lack of bullish momentum. We suggest to observe price action. However as investors, who like to avoid timing the markets, we suggest to avoid the stock
