Mehabe score: 3 G Factor: 2 Piotski Score: 5 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 5.
Description
Fervent Synergies is engaged in food division along with its finance division lending short term funds as and when available with the company.(Source : 201903 Annual Report Page No: 46)Site:533896
Market Cap:
Rs 65.7 cr
Price:
21.9
Trading pe:
411.0x
Book-value:
14.2/share
Div yield:
0.00 %
Earning yield:
0.55%
Face-value:
10.0/share
52week high:
26.60
52week low:
7.22
Technical Analysis
Stock trades at 21.9, above its 50dma 17.99. It also trades above its 200dma 15.09. The stock remains bullish on techicals
The 52 week high is at 26.60 and the 52week low is at 7.22
Price Chart
P/E Chart
Sales and Margin
Strengths
– is almost debt free.
-Promoter holding has increased by 1.08% over last quarter.
Weakness
– Though the company is reporting repeated profits, it is not paying out dividend
– has a low return on equity of 1.82% for last 3 years.
-Debtor days have increased from 81.36 to 131.60 days.
Competition
– The industry trades at a mean P/E of 44.8x. Fervent Synerg. trades at the industry’s max P/E of 410.62x. 533896 trades at a P/E of 411.0x
– Industry’s mean G-Factor is 3.5 while the mean Piotski score is 7.0. 533896 has a G-Factor of 2 and Piotski scoreof 5.
– Average 1 month return for industry is 14.6%. The max 1- month return was given by Redington India: a return of 42.32 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 0.19 cr compared to Rs 0.75 cr for period ended Mar 2020, a fall of 74.7%
Operating Profits reported at Rs 0.06 cr for period ended Mar 2021 vis-vis 0.08 for period ended Mar 2020 .
Operating Margins expanded 2091.2 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 0.01 compared to Rs 0.03 for previous quarter ended Dec 2020 and Rs 0.0 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 2.21 cr for period ended Mar 2021 vis-vis sales of Rs 7.35 cr for the period ended Mar 2020, a fall of 232.6%. The 3 year sales cagr stood at -26.3%.
Operating margins expanded to 12.67% for period ended Mar 2021 vis-vis 6.12% for period ended Mar 2020, expansion of 655.0 bps.
Net Profit reported at Rs 0.17 cr for period ended Mar 2021 vis-vis sales of Rs 0.24 cr for the period ended Mar 2020, falling 41.2%.
Company reported a poor Net Profit CAGR of -41.1% 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 1.0% compared to 2.0% over the last 3 Years. – The stock has given a return of 119% on a 1 Year basis vis-vis a return of -3% over the last 3 Years. – The compounded sales growth on a TTM bassis is -73% vis-vis a compounded sales growth of -43% over the last 3 Years. – The compounded profit growth on a TTM basis is 0% vis-vis a compounded profit growth of -51% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Mar 2021 public holding stood at 29.44% vis-vis 30.52% for Dec 2020
Conclusion
– is almost debt free.
-Promoter holding has increased by 1.08% over last quarter. – Though the company is reporting repeated profits, it is not paying out dividend
– has a low return on equity of 1.82% for last 3 years.
-Debtor days have increased from 81.36 to 131.60 days.
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 17.99 and is trading at 21.9 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
