Mehabe score: 3 G Factor: 1 Piotski Score: 6 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 6.
Description
Ducon Infratechnologies is engaged in the business of Installation of industrial machinery and equipment & Computer Systems & Information Technology Products.Site:DUCON
Market Cap:
Rs 299 cr
Price:
17.0
Trading pe:
713.0x
Book-value:
4.50/share
Div yield:
0.00 %
Earning yield:
3.21%
Face-value:
1.00/share
52week high:
16.15
52week low:
3.45
Technical Analysis
Stock trades at 17.0, above its 50dma 9.93. It also trades above its 200dma 7.12. The stock remains bullish on techicals
The 52 week high is at 16.15 and the 52week low is at 3.45
Price Chart
P/E Chart
Sales and Margin
Strengths
– Promoter holding has increased by 9.51% over last quarter.
Weakness
– Stock is trading at 3.77 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 3.27% for last 3 years.
– has high debtors of 266.63 days.
Competition
– The industry trades at a mean P/E of 30.4x. Ducon Tech trades at the industry’s max P/E of 713.0x. DUCON trades at a P/E of 713.0x
– Industry’s mean G-Factor is 3.4 while the mean Piotski score is 9.0. DUCON has a G-Factor of 1 and Piotski scoreof 6.
– Average 1 month return for industry is 26.5%. The max 1- month return was given by Ducon Tech: a return of 118.71 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 100.51 cr compared to Rs 169.44 cr for period ended Mar 2020, a fall of 40.7%
Operating Profits reported at Rs 1.94 cr for period ended Mar 2021 vis-vis 2.26 for period ended Mar 2020 .
Operating Margins expanded 59.6 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs -0.03 compared to Rs 0.07 for previous quarter ended Dec 2020 and Rs 0.07 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 342.0 cr for period ended Mar 2021 vis-vis sales of Rs 381.0 cr for the period ended Mar 2020, a fall of 11.4%. The 3 year sales cagr stood at -6.2%.
Operating margins expanded to 4.0% for period ended Mar 2021 vis-vis 3.0% for period ended Mar 2020, expansion of 100.0 bps.
Net Profit reported at Rs 0.0 cr for period ended Mar 2021 vis-vis sales of Rs 1.0 cr for the period ended Mar 2020, falling 0%.
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 1.0% compared to 3.0% over the last 3 Years. – The stock has given a return of 268% on a 1 Year basis vis-vis a return of -5% over the last 3 Years. – The compounded sales growth on a TTM bassis is -10% vis-vis a compounded sales growth of -6% over the last 3 Years. – The compounded profit growth on a TTM basis is -51% vis-vis a compounded profit growth of -44% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has fallen for the period ended Mar 2021. The Mar 2021 public holding stood at 34.66% vis-vis 44.17% for Dec 2020
Conclusion
– Promoter holding has increased by 9.51% over last quarter. – Stock is trading at 3.77 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 3.27% for last 3 years.
– has high debtors of 266.63 days.
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 9.93 and is trading at 17.0 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
