Mehabe score: 3 G Factor: 4 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 4 and Piotski score of 6.
Description
Danlaw Technologies India Ltd is in the business of providing engineering and software development consulting services, Industrial electronics.
Its wholly owned subsidiary Danlaw Technologies Inc, was incorporated in 2011 to market engineering and information technology services to customers of USA.#
Main Points
Revenue Breakup
Presently, industrial electronics accounts for ~63% of revenues and computer programming, consultancy and related activities account for ~34% of revenues.#Site:532329Main Symbol:DANLAW
Stock trades at 239.0, below its 50dma 279.72. However it is trading above its 200dma 226.99. The stock remains weak in the short term due to near term bearish momentum. However overall bullish structure remains intact. Price action will further build up as it moves above its dma50, currently situated at 279.72.
The 52 week high is at 395.95 and the 52week low is at 37.00
Price Chart
P/E Chart
Sales and Margin
Strengths
– is expected to give good quarter
-Debtor days have improved from 86.04 to 60.65 days.
Weakness
– Stock is trading at 4.02 times its book value
– has a low return on equity of -6.50% for last 3 years.
Competition
– The industry trades at a mean P/E of 113.7x. Danlaw Tech. trades at the industry’s max P/E of 285.84x. 532329 trades at a P/E of 286.0x
– Industry’s mean G-Factor is 2.5 while the mean Piotski score is 6.0. 532329 has a G-Factor of 4 and Piotski scoreof 6.
– Average 1 month return for industry is -0.9%. The max 1- month return was given by Ajel: a return of 11.29 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 33.01 cr compared to Rs 10.2 cr for period ended Jun 2020, a rise of 223.6%
Company reported operating profit of Rs 1.08 cr for period ended Jun 2021, operating profit margin at 3.3 %.
Operating profit was negative for the same period last year thus company has improved its margins this year
The EPS for Jun 2021 was Rs -1.27 compared to Rs -0.84 for previous quarter ended Mar 2021 and Rs -3.4 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 122.0 cr for period ended TTM vis-vis sales of Rs 99.0 cr for the period ended Mar 2021, a healthy growth of 18.9%. The 3 year sales cagr stood at 30.4%.
Operating margins expanded to 7.0% for period ended TTM vis-vis 6.0% for period ended Mar 2021, expansion of 100.0 bps.
Net Profit reported at Rs 1.0 cr for period ended TTM vis-vis sales of Rs 0.0 cr for the period ended Mar 2021, 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 improved its Return on Equity (RoE) metric. The RoE on Last Year basis was 1.0% compared to -7.0% over the last 3 Years. – The stock has given a return of 459% 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 80% vis-vis a compounded sales growth of 72% over the last 3 Years. – The compounded profit growth on a TTM basis is 107% vis-vis a compounded profit growth of -40% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Jun 2021 public holding stood at 48.92% vis-vis 48.92% for Mar 2021
Conclusion
– is expected to give good quarter
-Debtor days have improved from 86.04 to 60.65 days. – Stock is trading at 4.02 times its book value
– has a low return on equity of -6.50% for last 3 years.
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 below its 50 DMA 279.72 and is trading at 239.0. Shows a near term lack of buying interest.
