Mehabe score: 4 G Factor: 2 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 2 and Piotski score of 6.
Description
Meenakshi Enterprises is registered as an NBFC with RBI. The Company is in the business of providing loans to both Corporate Clients and HNIs against security and guarantee. It also finances SME sector for growth and it acts as consultant for raising funds through IPO or PE / Venture Funds. It also acts as management consultant relating to areas such as Merger, Amalgamation, Acquisition and Valuation etc. The Company is also into the business of Investment in Shares & Securities and is having its separate research division to identify good listed companies.Site:538834Main Symbol:MEL
Stock trades at 9.85, above its 50dma 8.23. It also trades above its 200dma 5.94. The stock remains bullish on techicals
The 52 week high is at 10.87 and the 52week low is at 2.18
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
– is almost debt free.
-Stock is trading at 1.06 times its book value
Weakness
– has low interest coverage ratio.
-The company has delivered a poor sales growth of -3.75% over past five years.
-Promoter holding is low: 2.48%
– has a low return on equity of -2.41% for last 3 years.
– has high debtors of 179.30 days.
-‘s cost of borrowing seems high
Competition
– The industry trades at a mean P/E of 22.0x. SBI Cards trades at the industry’s max P/E of 98.92x. 538834 trades at a P/E of x
– Industry’s mean G-Factor is 3.4 while the mean Piotski score is 6.0. 538834 has a G-Factor of 2 and Piotski scoreof 6.
– Average 1 month return for industry is 1.6%. The max 1- month return was given by Cholaman.Inv.&Fn: a return of 11.52 %
Quarterly Results
Sales for period ended Sep 2021 is Rs 0.08 cr compared to Rs 0.21 cr for period ended Sep 2020, a fall of 61.9%
Company reported negative operating profit of Rs -0.29 cr for period ended Sep 2021. For same period last year, operating profit was -0.08
The EPS for Sep 2021 was Rs -0.23 compared to Rs -0.04 for previous quarter ended Jun 2021 and Rs -0.06 for Sep 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 1.57 cr for period ended TTM vis-vis sales of Rs 1.71 cr for the period ended Mar 2021, a fall of 8.9%. The 3 year sales cagr stood at -24.4%.
Operating margins shrank to -32.48% for period ended TTM vis-vis -4.68% for period ended Mar 2021, contraction of 2780.0 bps.
Net Profit reported at Rs -0.69 cr for period ended TTM vis-vis sales of Rs -0.26 cr for the period ended Mar 2021, falling 0%.
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 1.56 cr for period ended Mar 2021 vis-vis Rs -0.13 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 317% on a 1 Year basis vis-vis a return of 11% over the last 3 Years. – The compounded sales growth on a TTM bassis is -25% vis-vis a compounded sales growth of -21% over the last 3 Years. – The compounded profit growth on a TTM basis is -33% vis-vis a compounded profit growth of % over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Sep 2021 public holding stood at 97.53% vis-vis 97.53% for Jun 2021
Conclusion
– has reduced debt.
– is almost debt free.
-Stock is trading at 1.06 times its book value – has low interest coverage ratio.
-The company has delivered a poor sales growth of -3.75% over past five years.
-Promoter holding is low: 2.48%
– has a low return on equity of -2.41% for last 3 years.
– has high debtors of 179.30 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 8.23 and is trading at 9.85 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
