Mehabe score: 2 G Factor: 2 Piotski Score: 2 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 2.
Description
Magellanic Cloud Limited was originally incorporated with ROC, Kolkata in 1981 in the name of “South India Projects Limited”. It is present in Europe, USA and Asia.
The company provides its IT services in software development, consulting and human resource business solutions i.e. listing employment vacancies and referring or placing applicants for employment. #Site:538891Main Symbol:MCLOUD
Stock trades at 80.8, above its 50dma 66.61. It also trades above its 200dma 61.94. The stock remains bullish on techicals
The 52 week high is at 91.85 and the 52week low is at 44.00
Price Chart
P/E Chart
Sales and Margin
Strengths
– Promoter holding has increased by 1.73% over last quarter.
Weakness
– Stock is trading at 3.80 times its book value
-Tax rate seems low
– has a low return on equity of 10.44% for last 3 years.
– might be capitalizing the interest cost
-Earnings include an other income of Rs.2.14 Cr.
Competition
– The industry trades at a mean P/E of 27.6x. Magellanic Cloud trades at the industry’s max P/E of 114.24x. 538891 trades at a P/E of 114.0x
– Industry’s mean G-Factor is 2.9 while the mean Piotski score is 6.0. 538891 has a G-Factor of 2 and Piotski scoreof 2.
– Average 1 month return for industry is 9.9%. The max 1- month return was given by Magellanic Cloud: a return of 26.75 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 61.34 cr compared to Rs 51.95 cr for period ended Jun 2020, a rise of 18.1%
Operating Profits reported at Rs 1.69 cr for period ended Jun 2021 vis-vis 2.06 for period ended Jun 2020 .
Operating Margins contracted -121.0 bps for period ended Jun 2021 vis-vis Jun 2020 .
The EPS for Jun 2021 was Rs 0.03 compared to Rs 1.73 for previous quarter ended Mar 2021 and Rs 0.84 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 221.0 cr for period ended TTM vis-vis sales of Rs 212.0 cr for the period ended Mar 2021, a growth of 4.1%. The 3 year sales cagr stood at 2.7%.
Net Profit reported at Rs -1.0 cr for period ended TTM vis-vis sales of Rs 2.0 cr for the period ended Mar 2021, falling 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 worsened on its Return on Equity (RoE) metric. The RoE on Last Year basis was 3.0% compared to 10.0% over the last 3 Years. – The stock has given a return of 77% on a 1 Year basis vis-vis a return of 20% over the last 3 Years. – The compounded sales growth on a TTM bassis is 21% vis-vis a compounded sales growth of 10% over the last 3 Years. – The compounded profit growth on a TTM basis is -70% vis-vis a compounded profit growth of -26% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Jun 2021 public holding stood at 34.11% vis-vis 35.84% for Mar 2021
Conclusion
– Promoter holding has increased by 1.73% over last quarter. – Stock is trading at 3.80 times its book value
-Tax rate seems low
– has a low return on equity of 10.44% for last 3 years.
– might be capitalizing the interest cost
-Earnings include an other income of Rs.2.14 Cr.
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 66.61 and is trading at 80.8 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
