Mehabe score: 4 G Factor: 2 Piotski Score: 8 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 8.
Description
Sharika Enterprises Limited is an India-based power transmission and distribution engineering procurement construction (EPC) company.Site:540786Main Symbol:SHARIKA
Stock trades at 9.04, below its 50dma 10.15 and below its 200dma 10.25. The stock remains bearish on technicals
The 52 week high is at 16.99 and the 52week low is at 6.20
Price Chart
P/E Chart
Sales and Margin
Strengths
–
Weakness
– Though the company is reporting repeated profits, it is not paying out dividend
– has a low return on equity of 2.54% for last 3 years.
-Earnings include an other income of Rs.1.23 Cr.
– has high debtors of 193.47 days.
Competition
– The industry trades at a mean P/E of 30.6x. Adani Enterp. trades at the industry’s max P/E of 161.3x. 540786 trades at a P/E of 31.1x
– Industry’s mean G-Factor is 3.4 while the mean Piotski score is 8.0. 540786 has a G-Factor of 2 and Piotski scoreof 8.
– Average 1 month return for industry is -10.6%. The max 1- month return was given by Adani Enterp.: a return of 7.6 %
Quarterly Results
Sales for period ended Sep 2021 is Rs 5.71 cr compared to Rs 6.6 cr for period ended Jun 2020, a fall of 13.5%
Company reported negative operating profit of Rs -0.35 cr for period ended Sep 2021. For same period last year, operating profit was -1.97
The EPS for Sep 2021 was Rs -0.07 compared to Rs -0.54 for previous quarter ended Jun 2021 and Rs -0.54 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 49.92 cr for period ended Mar 2021 vis-vis sales of Rs 27.96 cr for the period ended Mar 2020, a healthy growth of 44.0%. The 3 year sales cagr stood at 35.8%.
Operating margins shrank to 5.97% for period ended Mar 2021 vis-vis 9.51% for period ended Mar 2020, contraction of 354.0 bps.
Net Profit reported at Rs 1.36 cr for period ended Mar 2021 vis-vis sales of Rs 0.14 cr for the period ended Mar 2020, rising 89.7%.
Company reported a poor Net Profit CAGR of -0.5% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 2.47 cr for period ended Mar 2021 vis-vis Rs -4.42 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 5.0% compared to 3.0% over the last 3 Years. – The stock has given a return of 10% on a 1 Year basis vis-vis a return of -1% over the last 3 Years. – The compounded sales growth on a TTM bassis is 79% vis-vis a compounded sales growth of 36% over the last 3 Years. – The compounded profit growth on a TTM basis is 800% vis-vis a compounded profit growth of -3% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Sep 2021 public holding stood at 44.84% vis-vis 44.84% for Jun 2021
Conclusion
– – Though the company is reporting repeated profits, it is not paying out dividend
– has a low return on equity of 2.54% for last 3 years.
-Earnings include an other income of Rs.1.23 Cr.
– has high debtors of 193.47 days.
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 10.15 and is trading at 9.04. 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
