Mehabe score: 2 G Factor: 4 Piotski Score: 6 The stock has a rating 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 4 and Piotski score of 6.
Description
Gammon Infrastructure Projects is presently engaged in the development of various infrastructure projects in sectors like transportation, energy and urban infrastructure through several special purpose vehicles (SPVs). It is also engaged in carrying out(Source : 201903 Annual Report Page No: 183)Site:GAMMNINFRAMain Symbol:GAMMNINFRA
Stock trades at 2.7, above its 50dma 1.88. It also trades above its 200dma 1.14. The stock remains bullish on techicals
The 52 week high is at 3.32 and the 52week low is at 0.55
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
-Stock is trading at 0.83 times its book value
– has delivered good profit growth of 29.70% CAGR over last 5 years
-Debtor days have improved from 120.50 to 61.55 days.
Weakness
– has low interest coverage ratio.
-The company has delivered a poor sales growth of -7.47% over past five years.
-Promoter holding is low: 20.60%
– has a low return on equity of -15.31% for last 3 years.
-Contingent liabilities of Rs.5304.11 Cr.
-Promoters have pledged 100.00% of their holding.
-Earnings include an other income of Rs.336.19 Cr.
-‘s cost of borrowing seems high
-Promoter holding has decreased over last 3 years: -17.94%
Competition
– The industry trades at a mean P/E of 12.6x. GE Power trades at the industry’s max P/E of 23.91x. GAMMNINFRA trades at a P/E of 4.06x
– Industry’s mean G-Factor is 4.0 while the mean Piotski score is 7.0. GAMMNINFRA has a G-Factor of 4 and Piotski scoreof 6.
– Average 1 month return for industry is 10.2%. The max 1- month return was given by Gammon Infra.: a return of 42.11 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 81.0 cr compared to Rs 105.0 cr for period ended Mar 2020, a fall of 22.9%
Operating Profits reported at Rs 31.0 cr for period ended Mar 2021 vis-vis 46.0 for period ended Mar 2020 .
Operating Margins contracted -553.8 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs -0.64 compared to Rs -0.59 for previous quarter ended Dec 2020 and Rs 2.5 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 242.0 cr for period ended Mar 2021 vis-vis sales of Rs 368.0 cr for the period ended Mar 2020, a fall of 52.1%. The 3 year sales cagr stood at -27.1%.
Operating margins shrank to 36.0% for period ended Mar 2021 vis-vis 51.0% for period ended Mar 2020, contraction of 1500.0 bps.
Net Profit reported at Rs -233.0 cr for period ended Mar 2021 vis-vis sales of Rs 67.0 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 improved its Return on Equity (RoE) metric. The RoE on Last Year basis was 17.0% compared to -15.0% over the last 3 Years. – The stock has given a return of 238% on a 1 Year basis vis-vis a return of 20% over the last 3 Years. – The compounded sales growth on a TTM bassis is -33% vis-vis a compounded sales growth of -18% over the last 3 Years. – The compounded profit growth on a TTM basis is 127% vis-vis a compounded profit growth of 38% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has risen for the period ended Mar 2021. The Mar 2021 fii holding stood at 10.21% vis-vis 1.09% for Dec 2020 – Public shareholding has remained largely constant. The Mar 2021 public holding stood at 62.02% vis-vis 61.14% for Dec 2020
Conclusion
– has reduced debt.
-Stock is trading at 0.83 times its book value
– has delivered good profit growth of 29.70% CAGR over last 5 years
-Debtor days have improved from 120.50 to 61.55 days. – has low interest coverage ratio.
-The company has delivered a poor sales growth of -7.47% over past five years.
-Promoter holding is low: 20.60%
– has a low return on equity of -15.31% for last 3 years.
-Contingent liabilities of Rs.5304.11 Cr.
-Promoters have pledged 100.00% of their holding.
-Earnings include an other income of Rs.336.19 Cr.
-‘s cost of borrowing seems high
-Promoter holding has decreased over last 3 years: -17.94%
The business fundamentals of the stock remain stable. Stronger near term results will build interest in the stock. We suggest to wait for a upturn in business performance.
Technically, the stock remains above its 50 DMA 1.88 and is trading at 2.7, thus bullish price action wise.
