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Our Rating: OBSERVE & HOLD
Mehabe score: 3 G Factor: 0 Piotski Score: 3 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 0 and Piotski score of 3.
Description
Virtual Global Education is engaged in the Business of Technical and Vocational Secondary Education.Site:534741Main Symbol:VIRTUALG
Stock trades at 1.12, above its 50dma 0.89. It also trades above its 200dma 0.55. The stock remains bullish on techicals
The 52 week high is at 1.22 and the 52week low is at 0.18
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
– is almost debt free.
-Stock is trading at 0.75 times its book value
Weakness
– Though the company is reporting repeated profits, it is not paying out dividend
-The company has delivered a poor sales growth of -55.01% over past five years.
-Promoter holding is low: 23.13%
– has a low return on equity of 0.50% for last 3 years.
– has high debtors of 10835.60 days.
Competition
– The industry trades at a mean P/E of 32.5x. Virtual Global trades at the industry’s max P/E of 158.17x. 534741 trades at a P/E of 158.0x
– Industry’s mean G-Factor is 3.5 while the mean Piotski score is 9.0. 534741 has a G-Factor of 0 and Piotski scoreof 3.
– Average 1 month return for industry is 15.3%. The max 1- month return was given by Happiest Minds: a return of 32.07 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 0.17 cr compared to Rs 0.71 cr for period ended Mar 2020, a fall of 76.1%
Company reported negative operating profit of Rs -0.16 cr for period ended Mar 2021. For same period last year, operating profit was 0.07
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 0.67 cr for period ended Mar 2021 vis-vis sales of Rs 3.43 cr for the period ended Mar 2020, a fall of 411.9%. The 3 year sales cagr stood at -73.6%.
Operating margins shrank to -62.69% for period ended Mar 2021 vis-vis -5.83% for period ended Mar 2020, contraction of 5686.0 bps.
Net Profit reported at Rs 0.3 cr for period ended Mar 2021 vis-vis sales of Rs 0.24 cr for the period ended Mar 2020, rising 20.0%.
Company reported a poor Net Profit CAGR of -50.0% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities: Rs 0.0 cr for period ended Mar 2021 vis-vis Rs -0.03 cr for period ended Mar 2020
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The stock has given a return of 559% on a 1 Year basis vis-vis a return of 18% over the last 3 Years. – The compounded sales growth on a TTM bassis is -80% vis-vis a compounded sales growth of -74% over the last 3 Years. – The compounded profit growth on a TTM basis is 25% vis-vis a compounded profit growth of -50% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2021 fii holding stood at 5.53% vis-vis 5.53% for Dec 2020 – Public shareholding has remained largely constant. The Mar 2021 public holding stood at 71.32% vis-vis 71.32% for Dec 2020
Conclusion
– has reduced debt.
– is almost debt free.
-Stock is trading at 0.75 times its book value – Though the company is reporting repeated profits, it is not paying out dividend
-The company has delivered a poor sales growth of -55.01% over past five years.
-Promoter holding is low: 23.13%
– has a low return on equity of 0.50% for last 3 years.
– has high debtors of 10835.60 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 0.89 and is trading at 1.12 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
