Mehabe score: 7 G Factor: 4 Piotski Score: 4 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 4 and Piotski score of 4.
Description
PSP Projects Limited is a construction company incorporated in August 2008 offering a diversified range of construction and allied services across industrial, institutional, government, government residential, and residential projects in India. The principal promoter, Mr. Prahalad S. Patel has over three decades of experience in the construction industry. #
It is also engaged in the real estate development of two mid-scale projects in the USA through its subsidiaries
Main Points
Fast Growing construction company
PSP Projects is the second Fastest Growing Construction Company in Small Category in India#
It has completed 153 Projects to date, establishing a strong relationship with reputed clientele, and has demonstrated a track record of timely completion of projects which has helped it to secure repeat orders from its existing customers consisting of large pharmaceutical, dairy, and public sector entities.Site:PSPPROJECTMain Symbol:PSPPROJECT
Stock trades at 467.0, above its 50dma 436.43. It also trades above its 200dma 430.2. The stock remains bullish on techicals
The 52 week high is at 531.30 and the 52week low is at 336.75
Price Chart
P/E Chart
Sales and Margin
Strengths
– is almost debt free.
– is expected to give good quarter
– has a good return on equity (ROE) track record: 3 Years ROE 24.11%
– has been maintaining a healthy dividend payout of 17.27%
Weakness
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Competition
– The industry trades at a mean P/E of 42.7x. Macrotech Devel. trades at the industry’s max P/E of 20.23x. PSPPROJECT trades at a P/E of 15.3x
– Industry’s mean G-Factor is 5.5 while the mean Piotski score is 7.0. PSPPROJECT has a G-Factor of 4 and Piotski scoreof 4.
– Average 1 month return for industry is 15.0%. The max 1- month return was given by PNC Infratech: a return of 24.21 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 317.0 cr compared to Rs 107.0 cr for period ended Jun 2020, a rise of 196.3%
Operating Profits reported at Rs 39.0 cr for period ended Jun 2021 vis-vis 1.0 for period ended Jun 2020 .
Operating Margins expanded 1136.8 bps for period ended Jun 2021 vis-vis Jun 2020 .
The EPS for Jun 2021 was Rs 6.92 compared to Rs 11.59 for previous quarter ended Mar 2021 and Rs -0.96 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 1451.0 cr for period ended TTM vis-vis sales of Rs 1241.0 cr for the period ended Mar 2021, a healthy growth of 14.5%. The 3 year sales cagr stood at 11.4%.
Operating margins expanded to 12.0% for period ended TTM vis-vis 11.0% for period ended Mar 2021, expansion of 100.0 bps.
Net Profit reported at Rs 110.0 cr for period ended TTM vis-vis sales of Rs 82.0 cr for the period ended Mar 2021, rising 25.5%.
Company recorded a Net Profit CAGR of 7.3% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 73.0 cr for period ended Mar 2021 vis-vis Rs 16.0 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 16.0% compared to 24.0% over the last 3 Years. – The stock has given a return of 14% on a 1 Year basis vis-vis a return of -0% over the last 3 Years. – The compounded sales growth on a TTM bassis is 12% vis-vis a compounded sales growth of 18% over the last 3 Years. – The compounded profit growth on a TTM basis is 10% vis-vis a compounded profit growth of 7% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Jun 2021 fii holding stood at 1.29% vis-vis 1.29% for Mar 2021 – Public shareholding has remained largely constant. The Jun 2021 public holding stood at 20.55% vis-vis 19.0% for Mar 2021
Conclusion
– is almost debt free.
– is expected to give good quarter
– has a good return on equity (ROE) track record: 3 Years ROE 24.11%
– has been maintaining a healthy dividend payout of 17.27% –
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 436.43 and is trading at 467.0 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
