Investment Memo: 540205

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Our Rating: HOLD

Mehabe score: 5
G Factor: 6
Piotski Score: 7
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 6 and Piotski score of 7.

Description

Aditya Vision is engaged into retail business of consumer electronics, home appliances, camera and mobile phones.Site: 540205

Technical Analysis

• Stock trades at 470.0, above its 50dma 317.66. It also trades above its 200dma 169.39. The stock remains bullish on techicals
• The 52 week high is at 460.45 and the 52week low is at 20.60

Price Chart

P/E Chart

Sales and Margin

Strengths

– has delivered good profit growth of 65.48% CAGR over last 5 years
– has a good return on equity (ROE) track record: 3 Years ROE 29.99%

Weakness

– Stock is trading at 14.36 times its book value
-Promoters have pledged 40.93% of their holding.
-Earnings include an other income of Rs.9.12 Cr.
-‘s cost of borrowing seems high

Competition

– The industry trades at a mean P/E of 40.3x. Aditya Vision trades at the industry’s max P/E of 40.29x. 540205 trades at a P/E of 40.3x
– Industry’s mean G-Factor is 6.0 while the mean Piotski score is 7.0. 540205 has a G-Factor of 6 and Piotski scoreof 7.
– Average 1 month return for industry is 49.0%. The max 1- month return was given by Aditya Vision: a return of 49.02 %

Quarterly Results

• Sales for period ended Mar 2021 is Rs 213.0 cr compared to Rs 200.0 cr for period ended Dec 2019, a rise of 6.5%
• Operating Profits reported at Rs 39.0 cr for period ended Mar 2021 vis-vis 11.0 for period ended Dec 2019 .
• Operating Margins expanded 1281.0 bps for period ended Mar 2021 vis-vis Dec 2019 .
• The EPS for Mar 2021 was Rs 14.31 compared to Rs 7.05 for previous quarter ended Dec 2020 and Rs 4.29 for Dec 2019

Profit & Loss Statement

Profit&Loss Comments

• Company reported sales of Rs 748.0 cr for period ended Mar 2021 vis-vis sales of Rs 797.0 cr for the period ended Mar 2020, a fall of 6.6%. The 3 year sales cagr stood at 19.0%.
• Operating margins expanded to 6.0% for period ended Mar 2021 vis-vis 3.0% for period ended Mar 2020, expansion of 300.0 bps.
• Net Profit reported at Rs 25.0 cr for period ended Mar 2021 vis-vis sales of Rs 14.0 cr for the period ended Mar 2020, rising 44.0%.
• Company recorded a healthy Net Profit CAGR of 102.7% 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 43.0% compared to 30.0% over the last 3 Years.
– The stock has given a return of 2631% on a 1 Year basis vis-vis a return of 86% over the last 3 Years.
– The compounded sales growth on a TTM bassis is 41% vis-vis a compounded sales growth of 30% over the last 3 Years.
– The compounded profit growth on a TTM basis is 143% vis-vis a compounded profit growth of 102% over the last 3 Years.

Ratios

Shareholding Pattern

– Public shareholding has remained largely constant. The Mar 2021 public holding stood at 26.7% vis-vis 26.86% for Dec 2020

Conclusion

– has delivered good profit growth of 65.48% CAGR over last 5 years
– has a good return on equity (ROE) track record: 3 Years ROE 29.99% – Stock is trading at 14.36 times its book value
-Promoters have pledged 40.93% of their holding.
-Earnings include an other income of Rs.9.12 Cr.
-‘s cost of borrowing seems high

• 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 317.66 and is trading at 470.0, thus bullish price action wise.
• Thus, overall we retain a HOLD on the stock.

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