Mehabe score: 4 G Factor: 5 Piotski Score: 4 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 5 and Piotski score of 4.
Description
Aditya Birla Capital currently operates as a Non-Deposit taking Systemically Important-Core Investment Company (CIC-ND-SI) registered with the RBI vide certificate no. B.01.00555 dated 16th October 2015.(Source : 202003-01 Annual Report Page No:155) Site:ABCAPITAL Main Symbol:ABCAPITAL
Stock trades at 125.0, above its 50dma 121.3. It also trades above its 200dma 113.2. The stock remains bullish on techicals
The 52 week high is at 139.70 and the 52week low is at 84.40
Price Chart
P/E Chart
Sales and Margin
Strengths
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Weakness
– Though the company is reporting repeated profits, it is not paying out dividend
– has low interest coverage ratio.
– has a low return on equity of 8.78% for last 3 years.
Competition
– The industry trades at a mean P/E of 25.9x. Bajaj Finance trades at the industry’s max P/E of 72.08x. ABCAPITAL trades at a P/E of 22.4x
– Industry’s mean G-Factor is 3.5 while the mean Piotski score is 6.0. ABCAPITAL has a G-Factor of 5 and Piotski scoreof 4.
– Average 1 month return for industry is -1.9%. The max 1- month return was given by Cholaman.Inv.&Fn: a return of 17.71 %
Quarterly Results
Sales for period ended Sep 2021 is Rs 5593.0 cr compared to Rs 4595.0 cr for period ended Sep 2020, a rise of 21.7% .
vis-vis 1337.0 for period ended Sep 2020 .
Operating Margins contracted -544.2 bps for period ended Sep 2021 vis-vis Sep 2020.
Company reported operating profit of Rs 1323.0 cr for period ended Sep 2021 and operating profit margin at 23.7 % for same period.
The EPS for quarter ended Sep 2021 is Rs 1.56 compared to Rs 1.25 for previous quarter ended Jun 2021 and Rs 1.09 for Sep 2020.
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 20511.0 cr for period ended TTM vis-vis sales of Rs 19260.0 cr for the period ended Mar 2021, a growth of 6.1%. The 3 year sales cagr stood at 10.6%.
Operating margins shrank to 25.0% for period ended TTM vis-vis 27.0% for period ended Mar 2021, contraction of 200.0 bps.
Net Profit reported at Rs 1343.0 cr for period ended TTM vis-vis sales of Rs 1127.0 cr for the period ended Mar 2021, rising 16.1%.
Company recorded a healthy Net Profit CAGR of 15.5% 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 had stable/constant Return on Equity (RoE) metric. The RoE on Last Year basis was 9.0% compared to 9.0% over the last 3 Years. – The stock has given a return of 39% on a 1 Year basis vis-vis a return of 15% over the last 3 Years. – The compounded sales growth on a TTM bassis is 15% vis-vis a compounded sales growth of 19% over the last 3 Years. – The compounded profit growth on a TTM basis is 57% vis-vis a compounded profit growth of 18% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Dec 2021 fii holding stood at 2.44% vis-vis 2.37% for Sep 2021 – Public shareholding has remained largely constant. The Dec 2021 public holding stood at 15.03% vis-vis 15.19% for Sep 2021
Conclusion
– – Though the company is reporting repeated profits, it is not paying out dividend
– has low interest coverage ratio.
– has a low return on equity of 8.78% 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 121.3 and is trading at 125.0 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
