Mehabe score: 7 G Factor: 3 Piotski Score: 4 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 3 and Piotski score of 4.
Description
Leading Leasing Finance and investment Comapany is engaged in Financial service activieties, except insurance and pension funding activities.(Source : 201903 Annual Report Page No: 24)Site:540360Main Symbol:LLFICL
Stock trades at 85.1, above its 50dma 77.82. It also trades above its 200dma 69.87. The stock remains bullish on techicals
The 52 week high is at 117.00 and the 52week low is at 26.25
Price Chart
P/E Chart
Sales and Margin
Strengths
–
Weakness
– Stock is trading at 5.24 times its book value
-Though the company is reporting repeated profits, it is not paying out dividend
– has low interest coverage ratio.
– has a low return on equity of 12.88% for last 3 years.
– might be capitalizing the interest cost
Competition
– The industry trades at a mean P/E of 24.5x. SBI Cards trades at the industry’s max P/E of 93.25x. 540360 trades at a P/E of 60.5x
– Industry’s mean G-Factor is 4.4 while the mean Piotski score is 6.0. 540360 has a G-Factor of 3 and Piotski scoreof 4.
– Average 1 month return for industry is 2.4%. The max 1- month return was given by Bajaj Finserv: a return of 11.21 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 1.16 cr compared to Rs 1.69 cr for period ended Mar 2020, a fall of 31.4%
Operating Profits reported at Rs 1.07 cr for period ended Mar 2021 vis-vis 1.66 for period ended Mar 2020 .
Operating Margins contracted -598.3 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 0.17 compared to Rs 0.52 for previous quarter ended Dec 2020 and Rs 0.06 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 11.76 cr for period ended Mar 2021 vis-vis sales of Rs 4.08 cr for the period ended Mar 2020, a healthy growth of 65.3%. The 3 year sales cagr stood at 225.8%.
Operating margins expanded to 98.47% for period ended Mar 2021 vis-vis 98.04% for period ended Mar 2020, expansion of 43.0 bps.
Net Profit reported at Rs 0.99 cr for period ended Mar 2021 vis-vis sales of Rs 1.36 cr for the period ended Mar 2020, falling 37.4%.
Company recorded a healthy Net Profit CAGR of 131.3% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities: Rs 0.0 cr for period ended Mar 2021 vis-vis Rs -0.02 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 improved its Return on Equity (RoE) metric. The RoE on Last Year basis was 18.0% compared to 13.0% over the last 3 Years. – The stock has given a return of -18% on a 1 Year basis vis-vis a return of 66% over the last 3 Years. – The compounded sales growth on a TTM bassis is 319% vis-vis a compounded sales growth of 147% over the last 3 Years. – The compounded profit growth on a TTM basis is -55% vis-vis a compounded profit growth of 139% over the last 3 Years.
Ratios
Shareholding Pattern
Conclusion
– – Stock is trading at 5.24 times its book value
-Though the company is reporting repeated profits, it is not paying out dividend
– has low interest coverage ratio.
– has a low return on equity of 12.88% for last 3 years.
– might be capitalizing the interest cost
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 77.82 and is trading at 85.1 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
