Mehabe score: 4 G Factor: 4 Piotski Score: 6 The stock has a rating 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 4 and Piotski score of 6.
Description
Mercantile Ventures is engaged in the business of Leasing / Maintenance of immovable properties, Manpower Services, Investment activities.Site:538942
Market Cap:
Rs 213 cr
Price:
19.0
Trading pe:
7.58x
Book-value:
25.4/share
Div yield:
0.00 %
Earning yield:
4.12%
Face-value:
10.0/share
52week high:
21.00
52week low:
6.22
Technical Analysis
Stock trades at 19.0, above its 50dma 17.45. It also trades above its 200dma 13.44. The stock remains bullish on techicals
The 52 week high is at 21.00 and the 52week low is at 6.22
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
– has delivered good profit growth of 25.57% CAGR over last 5 years
Weakness
– Though the company is reporting repeated profits, it is not paying out dividend
-Tax rate seems low
– has a low return on equity of 3.73% for last 3 years.
-Contingent liabilities of Rs.250.64 Cr.
-Earnings include an other income of Rs.4.97 Cr.
Competition
– The industry trades at a mean P/E of 42.6x. Phoenix Mills trades at the industry’s max P/E of 263.49x. 538942 trades at a P/E of 7.58x
– Industry’s mean G-Factor is 3.4 while the mean Piotski score is 7.0. 538942 has a G-Factor of 4 and Piotski scoreof 6.
– Average 1 month return for industry is 4.6%. The max 1- month return was given by NBCC: a return of 13.11 %
Quarterly Results
Sales for period ended Dec 2020 is Rs 9.29 cr compared to Rs 9.65 cr for period ended Dec 2019, a fall of 3.7%
Operating Profits reported at Rs 1.08 cr for period ended Dec 2020 vis-vis 0.98 for period ended Dec 2019 .
Operating Margins expanded 147.0 bps for period ended Dec 2020 vis-vis Dec 2019 .
The EPS for Dec 2020 was Rs 0.25 compared to Rs 0.4 for previous quarter ended Sep 2020 and Rs 0.19 for Dec 2019
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 38.0 cr for period ended TTM vis-vis sales of Rs 38.0 cr for the period ended Mar 2020, The 3 year sales cagr stood at 8.2%.
Operating margins expanded to 12.0% for period ended TTM vis-vis 10.0% for period ended Mar 2020, expansion of 200.0 bps.
Net Profit reported at Rs 28.0 cr for period ended TTM vis-vis sales of Rs 21.0 cr for the period ended Mar 2020, rising 25.0%.
Company recorded a healthy Net Profit CAGR of 203.7% 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 improved its Return on Equity (RoE) metric. The RoE on Last Year basis was 8.0% compared to 4.0% over the last 3 Years. – The stock has given a return of 127% 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 2% vis-vis a compounded sales growth of 12% over the last 3 Years. – The compounded profit growth on a TTM basis is 188% vis-vis a compounded profit growth of 184% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Mar 2021 public holding stood at 35.29% vis-vis 35.29% for Dec 2020
Conclusion
– has reduced debt.
– is almost debt free.
-Stock is trading at 0.75 times its book value
– has delivered good profit growth of 25.57% CAGR over last 5 years – Though the company is reporting repeated profits, it is not paying out dividend
-Tax rate seems low
– has a low return on equity of 3.73% for last 3 years.
-Contingent liabilities of Rs.250.64 Cr.
-Earnings include an other income of Rs.4.97 Cr.
The business fundamentals of the stock remain stable. Stronger near term results will build interest in the stock. We suggest to wait for a upturn in business performance.
Technically, the stock remains above its 50 DMA 17.45 and is trading at 19.0, thus bullish price action wise.
