Mehabe score: 4 G Factor: 2 Piotski Score: 2 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 2 and Piotski score of 2.
Description
GE T&D is the listed entity of GE’s Grid Solutions business in India. It has been in the power transmission and distribution business for more than 100 years and provides a versatile range of solutions for connecting and evacuating power from generation sources onto the grid. #
Main Points
Strengths
Its Hosur plant is the first manufacturing unit in the world to have designed, manufactured, and supplied a 1200 kV Capacitive Voltage Transformer. #
GE T&D technology manages around 60% of the energy flow in India. #Site:GET&D
Market Cap:
Rs 3,536 cr
Price:
138.0
Trading pe:
x
Book-value:
40.5/share
Div yield:
0.00 %
Earning yield:
-3.22%
Face-value:
2.00/share
52week high:
148.55
52week low:
67.00
Technical Analysis
Stock trades at 138.0, above its 50dma 126.46. It also trades above its 200dma 118.0. The stock remains bullish on techicals
The 52 week high is at 148.55 and the 52week low is at 67.00
Price Chart
P/E Chart
Sales and Margin
Strengths
–
Weakness
– Stock is trading at 3.42 times its book value
– has low interest coverage ratio.
-The company has delivered a poor sales growth of -3.17% over past five years.
– has a low return on equity of 4.77% for last 3 years.
– has high debtors of 219.42 days.
Competition
– The industry trades at a mean P/E of 25.0x. A B B trades at the industry’s max P/E of 147.99x. GET&D trades at a P/E of x
– Industry’s mean G-Factor is 2.9 while the mean Piotski score is 8.0. GET&D has a G-Factor of 2 and Piotski scoreof 2.
– Average 1 month return for industry is 8.2%. The max 1- month return was given by A B B: a return of 22.1 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 904.0 cr compared to Rs 664.0 cr for period ended Mar 2020, a rise of 36.1%
Company reported operating profit of Rs 45.0 cr for period ended Mar 2021, operating profit margin at 5.0 %.
Operating profit was negative for the same period last year thus company has improved its margins this year
The EPS for Mar 2021 was Rs 0.63 compared to Rs 2.18 for previous quarter ended Dec 2020 and Rs -7.31 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 3452.0 cr for period ended Mar 2021 vis-vis sales of Rs 3159.0 cr for the period ended Mar 2020, a growth of 8.5%. The 3 year sales cagr stood at -7.3%.
Operating margins expanded to 4.0% for period ended Mar 2021 vis-vis -6.0% for period ended Mar 2020, expansion of 1000.0 bps.
Net Profit reported at Rs 60.0 cr for period ended Mar 2021 vis-vis sales of Rs -303.0 cr for the period ended Mar 2020, rising 605.0%.
Company reported a poor Net Profit CAGR of -34.0% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities: Rs 0.0 cr for period ended Mar 2021 vis-vis Rs -260.0 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 worsened on its Return on Equity (RoE) metric. The RoE on Last Year basis was -20.0% compared to 5.0% over the last 3 Years. – The stock has given a return of 84% on a 1 Year basis vis-vis a return of -24% over the last 3 Years. – The compounded sales growth on a TTM bassis is -5% vis-vis a compounded sales growth of -8% over the last 3 Years. – The compounded profit growth on a TTM basis is -316% vis-vis a compounded profit growth of % over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2021 fii holding stood at 0.47% vis-vis 0.61% for Dec 2020 – Public shareholding has remained largely constant. The Mar 2021 public holding stood at 9.45% vis-vis 9.12% for Dec 2020
Conclusion
– – Stock is trading at 3.42 times its book value
– has low interest coverage ratio.
-The company has delivered a poor sales growth of -3.17% over past five years.
– has a low return on equity of 4.77% for last 3 years.
– has high debtors of 219.42 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 126.46 and is trading at 138.0 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
