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Our Rating: OBSERVE & HOLD
Mehabe score: 2 G Factor: 5 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 5 and Piotski score of 4.
Description
Anand Rathi Wealth Ltd was incorporated on March 22, 1995. It is an AMFI registered mutual fund distributor and is one of the leading non-bank wealth solutions firms in India, being ranked amongst the top three non-bank mutual fund distributors in the country. The company offers a wide product portfolio of wealth solutions, financial product distribution, and technology solutions to its clients. Site:ANANDRATHI Main Symbol:ANANDRATHI
Stock trades at 623.0, above its 50dma 588.72. It also trades above its 200dma 584.67. The stock remains bullish on techicals
The 52 week high is at 654.00 and the 52week low is at 542.60
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
– is almost debt free.
– has a good return on equity (ROE) track record: 3 Years ROE 31.99%
Weakness
– Stock is trading at 9.27 times its book value
-Though the company is reporting repeated profits, it is not paying out dividend
Competition
– The industry trades at a mean P/E of 27.4x. Bajaj Finance trades at the industry’s max P/E of 92.88x. ANANDRATHI trades at a P/E of 58.6x
– Industry’s mean G-Factor is 3.8 while the mean Piotski score is 6.0. ANANDRATHI has a G-Factor of 5 and Piotski scoreof 4.
– Average 1 month return for industry is -1.5%. The max 1- month return was given by Bajaj Finance: a return of 3.89 %
Quarterly Results
.
Company reported operating profit of Rs 44.0 cr for period ended Dec 2021 and operating profit margin at 43.1 % for same period.
The EPS for quarter ended Dec 2021 is Rs 7.66 compared to Rs 7.25 for previous quarter ended Sep 2021.
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 260.0 cr for period ended Mar 2021 vis-vis sales of Rs 327.0 cr for the period ended Mar 2020, a fall of 25.8%. The 3 year sales cagr stood at 6.7%.
Operating margins shrank to 29.0% for period ended Mar 2021 vis-vis 35.0% for period ended Mar 2020, contraction of 600.0 bps.
Net Profit reported at Rs 44.0 cr for period ended Mar 2021 vis-vis sales of Rs 71.0 cr for the period ended Mar 2020, falling 61.4%.
Company reported a poor Net Profit CAGR of -4.2% 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 worsened on its Return on Equity (RoE) metric. The RoE on Last Year basis was 18.0% compared to 32.0% over the last 3 Years. – The stock has given a return of % on a 1 Year basis vis-vis a return of % over the last 3 Years. – The compounded sales growth on a TTM bassis is -20% vis-vis a compounded sales growth of 7% over the last 3 Years. – The compounded profit growth on a TTM basis is -38% vis-vis a compounded profit growth of -4% over the last 3 Years.
Ratios
Conclusion
– has reduced debt.
– is almost debt free.
– has a good return on equity (ROE) track record: 3 Years ROE 31.99% – Stock is trading at 9.27 times its book value
-Though the company is reporting repeated profits, it is not paying out dividend
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 588.72 and is trading at 623.0 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
