Mehabe score: 1 G Factor: 4 Piotski Score: 4 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 4 and Piotski score of 4.
Description
Aditya Birla Capital is currently operates as a Non-Deposit taking Systemically Important-Core Investment Company (CIC-ND-SI) registered with the RBI vide certificate no. B.01.00555 dated 16th October 2015.(Source : 202003-01 Annual Report Page No:155)Site:ABCAPITALMain Symbol:ABCAPITAL
Stock trades at 96.7, below its 50dma 113.23 and below its 200dma 108.19. The stock remains bearish on technicals
The 52 week high is at 139.70 and the 52week low is at 59.85
Price Chart
P/E Chart
Sales and Margin
Strengths
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Weakness
– 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 8.78% for last 3 years.
Competition
– The industry trades at a mean P/E of 22.4x. SBI Cards trades at the industry’s max P/E of 96.13x. ABCAPITAL trades at a P/E of 19.0x
– Industry’s mean G-Factor is 3.8 while the mean Piotski score is 6.0. ABCAPITAL has a G-Factor of 4 and Piotski scoreof 4.
– Average 1 month return for industry is -2.3%. The max 1- month return was given by Cholaman.Inv.&Fn: a return of 5.34 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 4299.0 cr compared to Rs 4034.0 cr for period ended Jun 2020, a rise of 6.6%
Operating Profits reported at Rs 1200.0 cr for period ended Jun 2021 vis-vis 1324.0 for period ended Jun 2020 .
Operating Margins contracted -490.8 bps for period ended Jun 2021 vis-vis Jun 2020 .
The EPS for Jun 2021 was Rs 1.25 compared to Rs 1.55 for previous quarter ended Mar 2021 and Rs 0.82 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 19507.0 cr for period ended TTM vis-vis sales of Rs 19260.0 cr for the period ended Mar 2021, a growth of 1.3%. The 3 year sales cagr stood at 8.7%.
Operating margins shrank to 26.0% for period ended TTM vis-vis 27.0% for period ended Mar 2021, contraction of 100.0 bps.
Net Profit reported at Rs 1230.0 cr for period ended TTM vis-vis sales of Rs 1127.0 cr for the period ended Mar 2021, rising 8.4%.
Company recorded a healthy Net Profit CAGR of 12.2% 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 had stable/constant Return on Equity (RoE) metric. The RoE on Last Year basis was 9.0% compared to 9.0% over the last 3 Years. – The stock has given a return of 49% on a 1 Year basis vis-vis a return of -3% over the last 3 Years. – The compounded sales growth on a TTM bassis is 14% vis-vis a compounded sales growth of 19% over the last 3 Years. – The compounded profit growth on a TTM basis is 45% vis-vis a compounded profit growth of 18% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Sep 2021 fii holding stood at 2.37% vis-vis 2.75% for Jun 2021 – Public shareholding has remained largely constant. The Sep 2021 public holding stood at 15.19% vis-vis 14.57% for Jun 2021
Conclusion
– – 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 8.78% for last 3 years.
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 113.23 and is trading at 96.7. 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
