Mehabe score: 6 G Factor: 3 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 3 and Piotski score of 4.
Description
Monarch Networth Capital is predominantly engaged in Share & Stock Broking, Merchant Banking, and Mutual Fund Distributor.Site:511551
Market Cap:
Rs 226 cr
Price:
72.8
Trading pe:
13.3x
Book-value:
29.7/share
Div yield:
0.00 %
Earning yield:
89.10%
Face-value:
10.0/share
52week high:
77.90
52week low:
17.00
Technical Analysis
Stock trades at 72.8, above its 50dma 65.78. It also trades above its 200dma 51.11. The stock remains bullish on techicals
The 52 week high is at 77.90 and the 52week low is at 17.00
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
– is almost debt free.
– is expected to give good quarter
Weakness
– Though the company is reporting repeated profits, it is not paying out dividend
-The company has delivered a poor sales growth of 3.26% over past five years.
-Contingent liabilities of Rs.79.66 Cr.
– has high debtors of 356.76 days.
-Promoter holding has decreased over last 3 years: -3.94%
Competition
– The industry trades at a mean P/E of 19.9x. SBI Cards trades at the industry’s max P/E of 100.52x. 511551 trades at a P/E of 13.3x
– Industry’s mean G-Factor is 4.4 while the mean Piotski score is 7.0. 511551 has a G-Factor of 3 and Piotski scoreof 4.
– Average 1 month return for industry is 6.7%. The max 1- month return was given by Muthoot Finance: a return of 17.26 %
Quarterly Results
Sales for period ended Dec 2020 is Rs 17.68 cr compared to Rs 14.07 cr for period ended Dec 2019, a rise of 25.7%
Operating Profits reported at Rs 2.77 cr for period ended Dec 2020 vis-vis 0.52 for period ended Dec 2019 .
Operating Margins expanded 1197.2 bps for period ended Dec 2020 vis-vis Dec 2019 .
The EPS for Dec 2020 was Rs 0.95 compared to Rs 2.6 for previous quarter ended Sep 2020 and Rs -0.05 for Dec 2019
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 81.0 cr for period ended TTM vis-vis sales of Rs 70.0 cr for the period ended Mar 2020, a healthy growth of 13.6%. The 3 year sales cagr stood at -4.2%.
Operating margins expanded to 24.0% for period ended TTM vis-vis 17.0% for period ended Mar 2020, expansion of 700.0 bps.
Net Profit reported at Rs 14.0 cr for period ended TTM vis-vis sales of Rs 2.0 cr for the period ended Mar 2020, rising 85.7%.
Company reported a poor Net Profit CAGR of -9.7% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 264.0 cr for period ended Mar 2020 vis-vis Rs 3.0 cr for period ended Mar 2019
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 16.0% over the last 3 Years. – The stock has given a return of 298% on a 1 Year basis vis-vis a return of 14% over the last 3 Years. – The compounded sales growth on a TTM bassis is 31% vis-vis a compounded sales growth of 0% over the last 3 Years. – The compounded profit growth on a TTM basis is 233% vis-vis a compounded profit growth of -44% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2021 fii holding stood at 3.09% vis-vis 3.09% for Dec 2020 – Public shareholding has remained largely constant. The Mar 2021 public holding stood at 34.61% vis-vis 34.61% for Dec 2020
Conclusion
– has reduced debt.
– is almost debt free.
– is expected to give good quarter – Though the company is reporting repeated profits, it is not paying out dividend
-The company has delivered a poor sales growth of 3.26% over past five years.
-Contingent liabilities of Rs.79.66 Cr.
– has high debtors of 356.76 days.
-Promoter holding has decreased over last 3 years: -3.94%
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 65.78 and is trading at 72.8 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
