Mehabe score: 4 G Factor: 3 Piotski Score: 6 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 6.
Description
Raunaq EPC Intl is engaged in Engineering Contracting Business, established in 1965 and primarily in the service of core infrastructural and industrial sectors in India, namely Power, Chemical, Hydro-carbon, Metal and Automobile sectors.Site:537840Main Symbol:RAUNAQEPC
Stock trades at 26.9, above its 50dma 25.02. It also trades above its 200dma 24.74. The stock remains bullish on techicals
The 52 week high is at 29.30 and the 52week low is at 18.30
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
-Stock is trading at 0.66 times its book value
Weakness
– has low interest coverage ratio.
-The company has delivered a poor sales growth of -41.96% over past five years.
– has a low return on equity of -31.88% for last 3 years.
-Contingent liabilities of Rs.24.43 Cr.
-Earnings include an other income of Rs.5.57 Cr.
– has high debtors of 174.18 days.
-‘s cost of borrowing seems high
Competition
– The industry trades at a mean P/E of 13.8x. Raunaq EPC Intl. trades at the industry’s max P/E of 179.8x. 537840 trades at a P/E of 180.0x
– Industry’s mean G-Factor is 4.0 while the mean Piotski score is 7.0. 537840 has a G-Factor of 3 and Piotski scoreof 6.
– Average 1 month return for industry is -3.7%. The max 1- month return was given by Larsen & Toubro: a return of 7.31 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 3.07 cr compared to Rs 17.72 cr for period ended Mar 2020, a fall of 82.7%
Company reported negative operating profit of Rs -0.9 cr for period ended Mar 2021. For same period last year, operating profit was -5.54
The EPS for Mar 2021 was Rs -3.35 compared to Rs 1.32 for previous quarter ended Dec 2020 and Rs -40.62 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 9.87 cr for period ended Mar 2021 vis-vis sales of Rs 61.68 cr for the period ended Mar 2020, a fall of 524.9%. The 3 year sales cagr stood at -49.2%.
Operating margins shrank to -30.8% for period ended Mar 2021 vis-vis -26.96% for period ended Mar 2020, contraction of 384.0 bps.
Net Profit reported at Rs 0.05 cr for period ended Mar 2021 vis-vis sales of Rs -21.78 cr for the period ended Mar 2020, rising 0%.
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 1.44 cr for period ended Mar 2021 vis-vis Rs -0.6 cr for period ended Mar 2020
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 0.0% compared to -32.0% over the last 3 Years. – The stock has given a return of 4% on a 1 Year basis vis-vis a return of -37% over the last 3 Years. – The compounded sales growth on a TTM bassis is -84% vis-vis a compounded sales growth of -49% over the last 3 Years. – The compounded profit growth on a TTM basis is 100% vis-vis a compounded profit growth of 27% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Jun 2021 public holding stood at 47.72% vis-vis 47.72% for Mar 2021
Conclusion
– has reduced debt.
-Stock is trading at 0.66 times its book value – has low interest coverage ratio.
-The company has delivered a poor sales growth of -41.96% over past five years.
– has a low return on equity of -31.88% for last 3 years.
-Contingent liabilities of Rs.24.43 Cr.
-Earnings include an other income of Rs.5.57 Cr.
– has high debtors of 174.18 days.
-‘s cost of borrowing seems high
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 25.02 and is trading at 26.9 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
