Investment Memo: 531471

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Our Rating: HOLD

Mehabe score: 2
G Factor: 5
Piotski Score: 6
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 5 and Piotski score of 6.

Description

Duke Offshore is engaged in the business of marine offshore vessels services.Site: 531471

Technical Analysis

• Stock trades at 15.6, above its 50dma 12.12. It also trades above its 200dma 10.53. The stock remains bullish on techicals
• The 52 week high is at 16.94 and the 52week low is at 6.25

Price Chart

P/E Chart

Sales and Margin

Strengths

– has reduced debt.
– is almost debt free.
-Debtor days have improved from 60.55 to 43.70 days.

Weakness

– has low interest coverage ratio.
-The company has delivered a poor sales growth of -14.42% over past five years.
– has a low return on equity of -5.44% for last 3 years.
-‘s cost of borrowing seems high

Competition

– The industry trades at a mean P/E of 90.3x. Jindal Drilling trades at the industry’s max P/E of 38.77x. 531471 trades at a P/E of x
– Industry’s mean G-Factor is 4.0 while the mean Piotski score is 7.0. 531471 has a G-Factor of 5 and Piotski scoreof 6.
– Average 1 month return for industry is 26.8%. The max 1- month return was given by Duke Offshore: a return of 32.07 %

Quarterly Results

• Sales for period ended Mar 2021 is Rs 0.38 cr compared to Rs 0.53 cr for period ended Mar 2020, a fall of 28.3%
• Company reported negative operating profit of Rs -0.49 cr for period ended Mar 2021. For same period last year, operating profit was 0.11
• The EPS for Mar 2021 was Rs -0.78 compared to Rs -0.42 for previous quarter ended Dec 2020 and Rs -0.16 for Mar 2020

Profit & Loss Statement

Profit&Loss Comments

• Company reported sales of Rs 1.67 cr for period ended Mar 2021 vis-vis sales of Rs 4.26 cr for the period ended Mar 2020, a fall of 155.1%. The 3 year sales cagr stood at -43.2%.
• Operating margins shrank to -64.67% for period ended Mar 2021 vis-vis -34.27% for period ended Mar 2020, contraction of 3040.0 bps.
• Net Profit reported at Rs -1.97 cr for period ended Mar 2021 vis-vis sales of Rs -2.69 cr for the period ended Mar 2020, rising 0%.

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 -20.0% compared to -5.0% over the last 3 Years.
– The stock has given a return of 83% on a 1 Year basis vis-vis a return of -9% over the last 3 Years.
– The compounded sales growth on a TTM bassis is -74% vis-vis a compounded sales growth of -14% over the last 3 Years.
– The compounded profit growth on a TTM basis is 43% vis-vis a compounded profit growth of % over the last 3 Years.

Ratios

Shareholding Pattern

– Public shareholding has remained largely constant. The Mar 2021 public holding stood at 29.39% vis-vis 29.39% for Dec 2020

Conclusion

– has reduced debt.
– is almost debt free.
-Debtor days have improved from 60.55 to 43.70 days. – has low interest coverage ratio.
-The company has delivered a poor sales growth of -14.42% over past five years.
– has a low return on equity of -5.44% for last 3 years.
-‘s cost of borrowing seems high

• 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 12.12 and is trading at 15.6, thus bullish price action wise.
• Thus, overall we retain a HOLD on the stock.

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