Mehabe score: 3 G Factor: 2 Piotski Score: 7 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 2 and Piotski score of 7.
Description
Sahara Housingfina Corp. is mainly engaged in the business of providing housing finance to individuals and corporates for the purchase or construction of residential houses.(Source : 201903 Annual Report Page No:59)Site:511533Main Symbol:SAHARAHOUS
Stock trades at 51.0, above its 50dma 48.31. It also trades above its 200dma 41.73. The stock remains bullish on techicals
The 52 week high is at 68.30 and the 52week low is at 28.65
Price Chart
P/E Chart
Sales and Margin
Strengths
– Stock is trading at 0.76 times its book value
Weakness
– Though the company is reporting repeated profits, it is not paying out dividend
– has low interest coverage ratio.
-The company has delivered a poor sales growth of -2.48% over past five years.
– has a low return on equity of 5.21% for last 3 years.
– might be capitalizing the interest cost
Competition
– The industry trades at a mean P/E of 23.1x. AAVAS Financiers trades at the industry’s max P/E of 67.98x. 511533 trades at a P/E of 17.4x
– Industry’s mean G-Factor is 3.6 while the mean Piotski score is 7.0. 511533 has a G-Factor of 2 and Piotski scoreof 7.
– Average 1 month return for industry is -6.5%. The max 1- month return was given by H D F C: a return of 6.84 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 2.97 cr compared to Rs 3.02 cr for period ended Jun 2020, a fall of 1.7%
Operating Profits reported at Rs 1.78 cr for period ended Jun 2021 vis-vis 1.8 for period ended Jun 2020 .
Operating Margins expanded 33.0 bps for period ended Jun 2021 vis-vis Jun 2020 .
The EPS for Jun 2021 was Rs 0.63 compared to Rs 0.83 for previous quarter ended Mar 2021 and Rs 0.69 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 12.67 cr for period ended TTM vis-vis sales of Rs 12.7 cr for the period ended Mar 2021, a fall of 0.2%. The 3 year sales cagr stood at -8.1%.
Operating margins shrank to 59.12% for period ended TTM vis-vis 59.37% for period ended Mar 2021, contraction of 25.0 bps.
Net Profit reported at Rs 2.05 cr for period ended TTM vis-vis sales of Rs 2.09 cr for the period ended Mar 2021, falling 2.0%.
Company reported a poor Net Profit CAGR of -7.7% 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 5.0% compared to 5.0% over the last 3 Years. – The stock has given a return of 50% on a 1 Year basis vis-vis a return of 5% over the last 3 Years. – The compounded sales growth on a TTM bassis is 2% vis-vis a compounded sales growth of -2% over the last 3 Years. – The compounded profit growth on a TTM basis is 1% vis-vis a compounded profit growth of -7% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Jun 2021 public holding stood at 28.65% vis-vis 28.65% for Mar 2021
Conclusion
– Stock is trading at 0.76 times its book value – Though the company is reporting repeated profits, it is not paying out dividend
– has low interest coverage ratio.
-The company has delivered a poor sales growth of -2.48% over past five years.
– has a low return on equity of 5.21% for last 3 years.
– might be capitalizing the interest cost
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 48.31 and is trading at 51.0 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
