Mehabe score: 1 G Factor: 1 Piotski Score: 4 The stock has a rating SELL. 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 1 and Piotski score of 4.
Description
RHFL was incorporated in 2009 as part of Reliance Capital group. It is registered as a housing finance company with National Housing Bank and is engaged in mortgage-based lending operations like home loan, affordable housing, LAP, construction finance. It also provides property solution services along with finance. The company has 26900 live loan accounts on Mar 20.
Main Points
Loan book
Total loan book is amounted to Rs.13961 crores (Mar 20) reduced from Rs.14655 crores (Mar 18) by 5% # #Site:RHFLMain Symbol:RELHOME
Stock trades at 4.4, below its 50dma 4.55. However it is trading above its 200dma 3.46. The stock remains weak in the short term due to near term bearish momentum. However overall bullish structure remains intact. Price action will further build up as it moves above its dma50, currently situated at 4.55.
The 52 week high is at 6.90 and the 52week low is at 1.40
Price Chart
P/E Chart
Sales and Margin
Strengths
–
Weakness
– has low interest coverage ratio.
-The company has delivered a poor sales growth of -0.29% over past five years.
– has a low return on equity of -43.56% for last 3 years.
-Promoter holding has decreased over last 3 years: -25.41%
Competition
– The industry trades at a mean P/E of 28.3x. AAVAS Financiers trades at the industry’s max P/E of 66.15x. RHFL trades at a P/E of x
– Industry’s mean G-Factor is 4.0 while the mean Piotski score is 8.0. RHFL has a G-Factor of 1 and Piotski scoreof 4.
– Average 1 month return for industry is -6.5%. The max 1- month return was given by Indiabulls Hous.: a return of 5.92 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 130.0 cr compared to Rs 244.0 cr for period ended Jun 2020, a fall of 46.7%
Company reported negative operating profit of Rs -163.0 cr for period ended Jun 2021. For same period last year, operating profit was 65.0
The EPS for Jun 2021 was Rs -5.93 compared to Rs -9.17 for previous quarter ended Mar 2021 and Rs -3.33 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 689.0 cr for period ended TTM vis-vis sales of Rs 803.0 cr for the period ended Mar 2021, a fall of 16.5%. The 3 year sales cagr stood at -29.9%.
Operating margins shrank to -195.0% for period ended TTM vis-vis -139.0% for period ended Mar 2021, contraction of 5600.0 bps.
Net Profit reported at Rs -1646.0 cr for period ended TTM vis-vis sales of Rs -1520.0 cr for the period ended Mar 2021, falling 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 -215.0% compared to -44.0% over the last 3 Years. – The stock has given a return of 110% on a 1 Year basis vis-vis a return of -58% over the last 3 Years. – The compounded sales growth on a TTM bassis is -50% vis-vis a compounded sales growth of -22% over the last 3 Years. – The compounded profit growth on a TTM basis is -306% 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 2.39% vis-vis 2.04% for Mar 2021 – Public shareholding has remained largely constant. The Jun 2021 public holding stood at 46.46% vis-vis 46.61% for Mar 2021
Conclusion
– – has low interest coverage ratio.
-The company has delivered a poor sales growth of -0.29% over past five years.
– has a low return on equity of -43.56% for last 3 years.
-Promoter holding has decreased over last 3 years: -25.41%
Fundamentally, the stock remains weak. The business fundamentals are on shaky ground. Weak near term results have dampened and questioned business drivers. We suggest to wait for a upturn in business performance.
Technically, the stock reflects the poor fundamentals. The stock remains below its 50 DMA 4.55 and is trading at 4.4. It has shown near term lack of bullish momentum. We suggest to observe price action. However as investors, who like to avoid timing the markets, we suggest to avoid the stock
