Mehabe score: 2 G Factor: 2 Piotski Score: 7 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 7.
Description
Southern Infosys is engaged in a single segment i.e. the Trading of ‘Local Computersand otherrelated services’ from where it is earning its revenue and incurring expense.Site:540174
Market Cap:
Rs 10.2 cr
Price:
20.2
Trading pe:
145.0x
Book-value:
10.2/share
Div yield:
0.00 %
Earning yield:
2.38%
Face-value:
10.0/share
52week high:
35.00
52week low:
5.60
Technical Analysis
Stock trades at 20.2, above its 50dma 20.09. It also trades above its 200dma 16.4. The stock remains bullish on techicals
The 52 week high is at 35.00 and the 52week low is at 5.60
Price Chart
P/E Chart
Sales and Margin
Strengths
– is almost debt free.
– is expected to give good quarter
Weakness
– Though the company is reporting repeated profits, it is not paying out dividend
-Promoter holding has decreased over last quarter: -2.49%
-The company has delivered a poor sales growth of 7.22% over past five years.
– has a low return on equity of 1.05% for last 3 years.
– has high debtors of 421.47 days.
Competition
– The industry trades at a mean P/E of 31.0x. Southern Infosys trades at the industry’s max P/E of 145.29x. 540174 trades at a P/E of 145.0x
– Industry’s mean G-Factor is 3.5 while the mean Piotski score is 9.0. 540174 has a G-Factor of 2 and Piotski scoreof 7.
– Average 1 month return for industry is 15.0%. The max 1- month return was given by Happiest Minds: a return of 27.99 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 5.71 cr compared to Rs 15.73 cr for period ended Mar 2020, a fall of 63.7%
Company reported negative operating profit of Rs -0.02 cr for period ended Mar 2021. For same period last year, operating profit was 0.03
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 15.77 cr for period ended Mar 2021 vis-vis sales of Rs 19.04 cr for the period ended Mar 2020, a fall of 20.7%. The 3 year sales cagr stood at -6.1%.
Operating margins shrank to -1.4% for period ended Mar 2021 vis-vis -0.79% for period ended Mar 2020, contraction of 61.0 bps.
Net Profit reported at Rs 0.07 cr for period ended Mar 2021 vis-vis sales of Rs 0.1 cr for the period ended Mar 2020, 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 had stable/constant Return on Equity (RoE) metric. The RoE on Last Year basis was 1.0% compared to 1.0% over the last 3 Years. – The stock has given a return of 213% on a 1 Year basis vis-vis a return of 22% over the last 3 Years. – The compounded sales growth on a TTM bassis is -17% vis-vis a compounded sales growth of -6% over the last 3 Years. – The compounded profit growth on a TTM basis is -30% vis-vis a compounded profit growth of 41% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has risen for the period ended Mar 2021. The Mar 2021 public holding stood at 26.82% vis-vis 24.32% for Dec 2020
Conclusion
– is almost debt free.
– is expected to give good quarter – Though the company is reporting repeated profits, it is not paying out dividend
-Promoter holding has decreased over last quarter: -2.49%
-The company has delivered a poor sales growth of 7.22% over past five years.
– has a low return on equity of 1.05% for last 3 years.
– has high debtors of 421.47 days.
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 20.09 and is trading at 20.2 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
