Mehabe score: 5 G Factor: 4 Piotski Score: 3 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 3.
Description
Shemaroo Entertainment is engaged in the business of distribution of content for Broadcasting of Satellite Channels, Physical Formats and Emerging Digital Technologies like Mobile, Internet, Broadband, IPTV and DTH among others.
Main Points
Company also launched two TV channel Shemaroo MarathiBana in Oct’19 and Shemaroo TV April’20. #Site:SHEMAROOMain Symbol:SHEMAROO
Stock trades at 143.0, above its 50dma 124.59. It also trades above its 200dma 99.15. The stock remains bullish on techicals
The 52 week high is at 181.00 and the 52week low is at 51.00
Price Chart
P/E Chart
Sales and Margin
Strengths
– Stock is trading at 0.67 times its book value
-Debtor days have improved from 80.33 to 64.21 days.
Weakness
– has low interest coverage ratio.
-The company has delivered a poor sales growth of -3.67% over past five years.
– has a low return on equity of 5.64% for last 3 years.
-Contingent liabilities of Rs.207.11 Cr.
Competition
– The industry trades at a mean P/E of 23.5x. Saregama India trades at the industry’s max P/E of 47.5x. SHEMAROO trades at a P/E of x
– Industry’s mean G-Factor is 3.4 while the mean Piotski score is 8.0. SHEMAROO has a G-Factor of 4 and Piotski scoreof 3.
– Average 1 month return for industry is 1.6%. The max 1- month return was given by Shemaroo Entert.: a return of 19.54 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 74.76 cr compared to Rs 86.2 cr for period ended Jun 2020, a fall of 13.3%
Company reported operating profit of Rs 7.14 cr for period ended Jun 2021, operating profit margin at 9.6 %.
Operating profit was negative for the same period last year thus company has improved its margins this year
The EPS for Jun 2021 was Rs -0.5 compared to Rs 0.8 for previous quarter ended Mar 2021 and Rs -4.77 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 300.0 cr for period ended TTM vis-vis sales of Rs 311.0 cr for the period ended Mar 2021, a fall of 3.7%. The 3 year sales cagr stood at -19.2%.
Operating margins expanded to 8.0% for period ended TTM vis-vis 4.0% for period ended Mar 2021, expansion of 400.0 bps.
Net Profit reported at Rs -10.0 cr for period ended TTM vis-vis sales of Rs -21.0 cr for the period ended Mar 2021, rising 0%.
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 10.0 cr for period ended Mar 2021 vis-vis Rs -8.0 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 -4.0% compared to 6.0% over the last 3 Years. – The stock has given a return of 119% on a 1 Year basis vis-vis a return of -33% over the last 3 Years. – The compounded sales growth on a TTM bassis is -39% vis-vis a compounded sales growth of -14% over the last 3 Years. – The compounded profit growth on a TTM basis is -162% vis-vis a compounded profit growth of % over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has fallen for the period ended Jun 2021. The Jun 2021 fii holding stood at 7.32% vis-vis 10.5% for Mar 2021 – Public shareholding has risen for the period ended Jun 2021. The Jun 2021 public holding stood at 26.8% vis-vis 23.62% for Mar 2021
Conclusion
– Stock is trading at 0.67 times its book value
-Debtor days have improved from 80.33 to 64.21 days. – has low interest coverage ratio.
-The company has delivered a poor sales growth of -3.67% over past five years.
– has a low return on equity of 5.64% for last 3 years.
-Contingent liabilities of Rs.207.11 Cr.
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 124.59 and is trading at 143.0 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
