Mehabe score: 4 G Factor: 0 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 0 and Piotski score of 2.
Description
North Eastern Carrying Corporation Ltd provides freight transportation services to bulk and retail customers, largely in the Full Truckload (FTL) segment, and other services such as warehousing and packing.[1]Site:NECCLTDMain Symbol:NECCLTD
Stock trades at 19.1, above its 50dma 17.99. It also trades above its 200dma 13.67. The stock remains bullish on techicals
The 52 week high is at 22.00 and the 52week low is at 6.55
Price Chart
P/E Chart
Sales and Margin
Strengths
– Stock is trading at 1.01 times its book value
Weakness
– Though the company is reporting repeated profits, it is not paying out dividend
-Promoter holding has decreased over last quarter: -3.99%
-The company has delivered a poor sales growth of -15.60% over past five years.
-Tax rate seems low
– has a low return on equity of 4.71% for last 3 years.
– has high debtors of 165.17 days.
Competition
– The industry trades at a mean P/E of 25.2x. Mahindra Logis. trades at the industry’s max P/E of 105.24x. NECCLTD trades at a P/E of 17.0x
– Industry’s mean G-Factor is 2.8 while the mean Piotski score is 6.0. NECCLTD has a G-Factor of 0 and Piotski scoreof 2.
– Average 1 month return for industry is 22.6%. The max 1- month return was given by Sindhu Trade: a return of 68.74 %
Quarterly Results
Sales for period ended Sep 2021 is Rs 54.8 cr compared to Rs 59.36 cr for period ended Sep 2020, a fall of 7.7%
Operating Profits reported at Rs 4.27 cr for period ended Sep 2021 vis-vis 2.34 for period ended Sep 2020 .
Operating Margins expanded 385.0 bps for period ended Sep 2021 vis-vis Sep 2020 .
The EPS for Sep 2021 was Rs 0.23 compared to Rs 0.14 for previous quarter ended Jun 2021 and Rs 0.17 for Sep 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 263.0 cr for period ended TTM vis-vis sales of Rs 231.0 cr for the period ended Mar 2021, a healthy growth of 12.2%. The 3 year sales cagr stood at -8.5%.
Operating margins expanded to 5.0% for period ended TTM vis-vis 4.0% for period ended Mar 2021, expansion of 100.0 bps.
Net Profit reported at Rs 6.0 cr for period ended TTM vis-vis sales of Rs 1.0 cr for the period ended Mar 2021, rising 83.3%.
Company recorded a Net Profit CAGR of 6.3% 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 stock has given a return of 171% on a 1 Year basis vis-vis a return of 26% over the last 3 Years. – The compounded sales growth on a TTM bassis is -4% vis-vis a compounded sales growth of -16% over the last 3 Years. – The compounded profit growth on a TTM basis is 359% vis-vis a compounded profit growth of -26% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Sep 2021 fii holding stood at 0.0% vis-vis 0.0% for Jun 2021 – Public shareholding has risen for the period ended Sep 2021. The Sep 2021 public holding stood at 47.32% vis-vis 43.34% for Jun 2021
Conclusion
– Stock is trading at 1.01 times its book value – Though the company is reporting repeated profits, it is not paying out dividend
-Promoter holding has decreased over last quarter: -3.99%
-The company has delivered a poor sales growth of -15.60% over past five years.
-Tax rate seems low
– has a low return on equity of 4.71% for last 3 years.
– has high debtors of 165.17 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 17.99 and is trading at 19.1 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
