Mehabe score: 2 G Factor: 2 Piotski Score: 2 The stock has a rating SELL. 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
AKME STAR HOUSING FINANCE LTD. is a housing finance company that started in 2005, that provides home loans to Low and Mid-Income Group households It is registered as a Primary Lending Institution (PLI) under the Pradhan Mantri Awas Yojana (PMAY). Currently, the business is spread across Rajasthan, Gujarat, Madhya Pradesh, Maharashtra, and Tamil Nadu.
Main Points
Product Offerings
Home Loans
Construction Loans: For the construction of housing unit on own land.
Improvement / Extension Loans: For up-gradation/modification of existing housing unit.
Balance Transfer Loans: For takeover of housing loan from an approved financier.Site:539017Main Symbol:STARHFL
Stock trades at 87.3, below its 50dma 92.86. However it is trading above its 200dma 85.7. The stock remains weak in the short term due to near term bearish momentum. However overall bullish structure remains intact. Price action will further build up as it moves above its dma50, currently situated at 92.86.
The 52 week high is at 109.00 and the 52week low is at 52.00
Price Chart
P/E Chart
Sales and Margin
Strengths
–
Weakness
– Stock is trading at 2.55 times its book value
– has low interest coverage ratio.
– has a low return on equity of 8.87% for last 3 years.
-Promoter holding has decreased over last 3 years: -11.57%
Competition
– The industry trades at a mean P/E of 27.9x. Star Housing Fin trades at the industry’s max P/E of 87.71x. 539017 trades at a P/E of 87.7x
– Industry’s mean G-Factor is 3.9 while the mean Piotski score is 8.0. 539017 has a G-Factor of 2 and Piotski scoreof 2.
– Average 1 month return for industry is -2.2%. The max 1- month return was given by Can Fin Homes: a return of 11.02 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 4.34 cr compared to Rs 3.48 cr for period ended Jun 2020, a rise of 24.7%
Operating Profits reported at Rs 1.65 cr for period ended Jun 2021 vis-vis 2.36 for period ended Jun 2020 .
Operating Margins contracted -2979.8 bps for period ended Jun 2021 vis-vis Jun 2020 .
The EPS for Jun 2021 was Rs 0.15 compared to Rs -0.48 for previous quarter ended Mar 2021 and Rs 0.61 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 16.47 cr for period ended TTM vis-vis sales of Rs 15.6 cr for the period ended Mar 2021, a growth of 5.3%. The 3 year sales cagr stood at 12.0%.
Operating margins shrank to 40.13% for period ended TTM vis-vis 46.92% for period ended Mar 2021, contraction of 679.0 bps.
Net Profit reported at Rs 0.85 cr for period ended TTM vis-vis sales of Rs 1.56 cr for the period ended Mar 2021, falling 83.5%.
Company reported a poor Net Profit CAGR of -40.8% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities: Rs -9.01 cr for period ended Mar 2021 vis-vis Rs -10.67 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 worsened on its Return on Equity (RoE) metric. The RoE on Last Year basis was 3.0% compared to 9.0% over the last 3 Years. – The stock has given a return of 45% on a 1 Year basis vis-vis a return of -0% over the last 3 Years. – The compounded sales growth on a TTM bassis is -2% vis-vis a compounded sales growth of 31% over the last 3 Years. – The compounded profit growth on a TTM basis is -69% vis-vis a compounded profit growth of -19% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Jun 2021 fii holding stood at 0.0% vis-vis 0.38% for Mar 2021 – Public shareholding has remained largely constant. The Jun 2021 public holding stood at 59.1% vis-vis 59.27% for Mar 2021
Conclusion
– – Stock is trading at 2.55 times its book value
– has low interest coverage ratio.
– has a low return on equity of 8.87% for last 3 years.
-Promoter holding has decreased over last 3 years: -11.57%
Fundamentally, the stock remains weak. The business fundamentals are on shaky ground. Weak near term results have dampened and questioned business drivers. We suggest to wait for a upturn in business performance.
Technically, the stock reflects the poor fundamentals. The stock remains below its 50 DMA 92.86 and is trading at 87.3. It has shown near term lack of bullish momentum. We suggest to observe price action. However as investors, who like to avoid timing the markets, we suggest to avoid the stock
