Mehabe score: 6 G Factor: 1 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 1 and Piotski score of 4.
Description
Ontic Finserve is engaged in the business of Financial Advisory Company.(Source : 201903 Annual Report Page No:20)Site:540386Main Symbol:ONTIC
Stock trades at 19.0, above its 50dma 9.37. It also trades above its 200dma 7.25. The stock remains bullish on techicals
The 52 week high is at 13.12 and the 52week low is at 3.11
Price Chart
P/E Chart
Sales and Margin
Strengths
– is almost debt free.
– is expected to give good quarter
Weakness
– Stock is trading at 3.89 times its book value
-Though the company is reporting repeated profits, it is not paying out dividend
– has a low return on equity of 1.16% for last 3 years.
Competition
– The industry trades at a mean P/E of 22.0x. SBI Cards trades at the industry’s max P/E of 97.71x. 540386 trades at a P/E of 46.2x
– Industry’s mean G-Factor is 3.5 while the mean Piotski score is 6.0. 540386 has a G-Factor of 1 and Piotski scoreof 4.
– Average 1 month return for industry is 6.2%. The max 1- month return was given by Ontic Finserve: a return of 46.15 %
Quarterly Results
Sales for period ended Sep 2021 is Rs 19.78 cr compared to Rs 0.48 cr for period ended Sep 2020, a rise of 4020.8%
Operating Profits reported at Rs 0.36 cr for period ended Sep 2021 vis-vis 0.03 for period ended Sep 2020 .
Operating Margins contracted -443.0 bps for period ended Sep 2021 vis-vis Sep 2020 .
The EPS for Sep 2021 was Rs 0.43 compared to Rs 0.39 for previous quarter ended Jun 2021 and Rs 0.03 for Sep 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 34.37 cr for period ended TTM vis-vis sales of Rs 2.29 cr for the period ended Mar 2021, a healthy growth of 93.3%. The 3 year sales cagr stood at 229.6%.
Operating margins shrank to 1.69% for period ended TTM vis-vis 2.18% for period ended Mar 2021, contraction of 49.0 bps.
Net Profit reported at Rs 0.73 cr for period ended TTM vis-vis sales of Rs 0.04 cr for the period ended Mar 2021, rising 94.5%.
Company recorded a healthy Net Profit CAGR of 144.4% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities: Rs -0.01 cr for period ended Mar 2021 vis-vis Rs -0.05 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 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 171% on a 1 Year basis vis-vis a return of % over the last 3 Years. – The compounded sales growth on a TTM bassis is 158% vis-vis a compounded sales growth of -16% over the last 3 Years. – The compounded profit growth on a TTM basis is 840% vis-vis a compounded profit growth of 0% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Sep 2021 public holding stood at 100.0% vis-vis 100.0% for Jun 2021
Conclusion
– is almost debt free.
– is expected to give good quarter – Stock is trading at 3.89 times its book value
-Though the company is reporting repeated profits, it is not paying out dividend
– has a low return on equity of 1.16% for last 3 years.
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 9.37 and is trading at 19.0 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
