Mehabe score: 2 G Factor: 3 Piotski Score: 6 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 3 and Piotski score of 6.
Description
Selan Explorations Technology in the business of oil & gas exploration and production. The Company has signed Production Sharing Contracts (PSCs) with Government of India (GOI) for Bakrol, Lohar, Ognaj and Karjisan fields.
(Source : 202003 Annual Report Page No:29)Site:SELAN
Market Cap:
Rs 266 cr
Price:
175.0
Trading pe:
42.6x
Book-value:
215/share
Div yield:
2.86 %
Earning yield:
-1.46%
Face-value:
10.0/share
52week high:
180.05
52week low:
92.50
Technical Analysis
Stock trades at 175.0, above its 50dma 145.06. It also trades above its 200dma 130.7. The stock remains bullish on techicals
The 52 week high is at 180.05 and the 52week low is at 92.50
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
– is almost debt free.
-Stock is trading at 0.81 times its book value
– has been maintaining a healthy dividend payout of 57.01%
Weakness
– has low interest coverage ratio.
-The company has delivered a poor sales growth of -4.68% over past five years.
-Promoter holding is low: 30.09%
– has a low return on equity of 7.77% for last 3 years.
-Earnings include an other income of Rs.9.43 Cr.
-‘s cost of borrowing seems high
Competition
– The industry trades at a mean P/E of 21.8x. Selan Expl. Tech trades at the industry’s max P/E of 42.59x. SELAN trades at a P/E of 42.6x
– Industry’s mean G-Factor is 3.0 while the mean Piotski score is 7.0. SELAN has a G-Factor of 3 and Piotski scoreof 6.
– Average 1 month return for industry is 18.5%. The max 1- month return was given by Hind.Oil Explor.: a return of 26.23 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 15.02 cr compared to Rs 20.64 cr for period ended Mar 2020, a fall of 27.2%
Company reported negative operating profit of Rs -3.23 cr for period ended Mar 2021. For same period last year, operating profit was -3.75
The EPS for Mar 2021 was Rs 0.72 compared to Rs 1.45 for previous quarter ended Dec 2020 and Rs -2.14 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 48.82 cr for period ended Mar 2021 vis-vis sales of Rs 89.6 cr for the period ended Mar 2020, a fall of 83.5%. The 3 year sales cagr stood at -13.9%.
Operating margins shrank to -16.39% for period ended Mar 2021 vis-vis 52.09% for period ended Mar 2020, contraction of 6848.0 bps.
Net Profit reported at Rs 6.24 cr for period ended Mar 2021 vis-vis sales of Rs 22.44 cr for the period ended Mar 2020, falling 259.6%.
Company reported a poor Net Profit CAGR of -34.4% 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 company has worsened on its Return on Equity (RoE) metric. The RoE on Last Year basis was 2.0% compared to 8.0% over the last 3 Years. – The stock has given a return of 67% on a 1 Year basis vis-vis a return of -2% over the last 3 Years. – The compounded sales growth on a TTM bassis is -46% vis-vis a compounded sales growth of -14% over the last 3 Years. – The compounded profit growth on a TTM basis is -73% vis-vis a compounded profit growth of -34% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2021 fii holding stood at 2.53% vis-vis 2.53% for Dec 2020 – Public shareholding has remained largely constant. The Mar 2021 public holding stood at 65.47% vis-vis 65.47% for Dec 2020
Conclusion
– has reduced debt.
– is almost debt free.
-Stock is trading at 0.81 times its book value
– has been maintaining a healthy dividend payout of 57.01% – has low interest coverage ratio.
-The company has delivered a poor sales growth of -4.68% over past five years.
-Promoter holding is low: 30.09%
– has a low return on equity of 7.77% for last 3 years.
-Earnings include an other income of Rs.9.43 Cr.
-‘s cost of borrowing seems high
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 145.06 and is trading at 175.0 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
