Mehabe score: 3 G Factor: 2 Piotski Score: 5 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 5.
Description
Mahindra Holidays & Resorts India Ltd. (MHRIL), a part of the Leisure and Hospitality sector of the Mahindra Group offers family holidays primarily through vacation ownership memberships. Started in 1996, the company’s flagship brand ‘Club Mahindra’ has over 250,000 members. #
Main Points
Brand Reputation
It has established itself as a market leader in the family holiday business.
The vacation ownership member base crossed the 2,50,000 landmark. #
It is the largest operator of leisure hotels in Finland and the largest vacation ownership company in Europe through its subsidy Holiday Club Res.Site:MHRILMain Symbol:MHRIL
Stock trades at 305.0, above its 50dma 284.95. It also trades above its 200dma 237.31. The stock remains bullish on techicals
The 52 week high is at 340.00 and the 52week low is at 160.00
Price Chart
P/E Chart
Sales and Margin
Strengths
–
Weakness
– Stock is trading at 48.05 times its book value
– has low interest coverage ratio.
-The company has delivered a poor sales growth of 1.55% over past five years.
– has a low return on equity of -11.63% for last 3 years.
– might be capitalizing the interest cost
-Earnings include an other income of Rs.133.60 Cr.
– has high debtors of 203.78 days.
Competition
– The industry trades at a mean P/E of 71.7x. Indian Hotels Co trades at the industry’s max P/E of 0.0x. MHRIL trades at a P/E of x
– Industry’s mean G-Factor is 3.0 while the mean Piotski score is 5.0. MHRIL has a G-Factor of 2 and Piotski scoreof 5.
– Average 1 month return for industry is -1.0%. The max 1- month return was given by Barbeque-Nation: a return of 21.68 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 371.0 cr compared to Rs 294.0 cr for period ended Jun 2020, a rise of 26.2%
Operating Profits reported at Rs 28.0 cr for period ended Jun 2021 vis-vis 19.0 for period ended Jun 2020 .
Operating Margins expanded 108.5 bps for period ended Jun 2021 vis-vis Jun 2020 .
The EPS for Jun 2021 was Rs -1.6 compared to Rs -0.76 for previous quarter ended Mar 2021 and Rs -2.07 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 1807.0 cr for period ended TTM vis-vis sales of Rs 1730.0 cr for the period ended Mar 2021, a growth of 4.3%. The 3 year sales cagr stood at -6.9%.
Net Profit reported at Rs -7.0 cr for period ended TTM vis-vis sales of Rs -13.0 cr for the period ended Mar 2021, rising 0%.
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
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 -12.0% over the last 3 Years. – The stock has given a return of 82% 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 -12% vis-vis a compounded sales growth of -9% over the last 3 Years. – The compounded profit growth on a TTM basis is 96% vis-vis a compounded profit growth of % over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Jun 2021 fii holding stood at 4.45% vis-vis 4.43% for Mar 2021 – Public shareholding has remained largely constant. The Jun 2021 public holding stood at 15.87% vis-vis 14.67% for Mar 2021
Conclusion
– – Stock is trading at 48.05 times its book value
– has low interest coverage ratio.
-The company has delivered a poor sales growth of 1.55% over past five years.
– has a low return on equity of -11.63% for last 3 years.
– might be capitalizing the interest cost
-Earnings include an other income of Rs.133.60 Cr.
– has high debtors of 203.78 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 284.95 and is trading at 305.0 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
