Mehabe score: 6 G Factor: 3 Piotski Score: 8 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 8.
Description
South West Pinnacle Exploration is providing end to end drilling, exploration and allied services to coal, ferrous, non-ferrous, atomic and base metal mining industries and water & unconventional energy industries.(Source : 201903 Annual Report Page No:92)Site:SOUTHWESTMain Symbol:www.nseindia.com
Stock trades at 145.0, above its 50dma 86.73. It also trades above its 200dma 59.34. The stock remains bullish on techicals
The 52 week high is at 107.40 and the 52week low is at 26.00
Price Chart
P/E Chart
Sales and Margin
Strengths
– is expected to give good quarter
Weakness
– Stock is trading at 4.14 times its book value
-The company has delivered a poor sales growth of 3.88% over past five years.
– has a low return on equity of 9.81% for last 3 years.
– has high debtors of 215.12 days.
Competition
– The industry trades at a mean P/E of 21.9x. South West Pinn. trades at the industry’s max P/E of 37.24x. SOUTHWEST trades at a P/E of 37.2x
– Industry’s mean G-Factor is 4.9 while the mean Piotski score is 9.0. SOUTHWEST has a G-Factor of 3 and Piotski scoreof 8.
– Average 1 month return for industry is -0.0%. The max 1- month return was given by South West Pinn.: a return of 15.89 %
Quarterly Results
Sales for period ended Sep 2021 is Rs 27.95 cr compared to Rs 24.53 cr for period ended Sep 2020, a rise of 13.9%
Operating Profits reported at Rs 6.28 cr for period ended Sep 2021 vis-vis 6.96 for period ended Sep 2020 .
Operating Margins contracted -590.5 bps for period ended Sep 2021 vis-vis Sep 2020 .
The EPS for Sep 2021 was Rs 1.13 compared to Rs 0.55 for previous quarter ended Jun 2021 and Rs 1.3 for Sep 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 115.0 cr for period ended TTM vis-vis sales of Rs 102.0 cr for the period ended Mar 2021, a healthy growth of 11.3%. The 3 year sales cagr stood at 11.5%.
Operating margins shrank to 20.0% for period ended TTM vis-vis 23.0% for period ended Mar 2021, contraction of 300.0 bps.
Net Profit reported at Rs 11.0 cr for period ended TTM vis-vis sales of Rs 11.0 cr for the period ended Mar 2021,
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 16.0 cr for period ended Mar 2021 vis-vis Rs 13.0 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 had stable/constant Return on Equity (RoE) metric. The RoE on Last Year basis was 10.0% compared to 10.0% over the last 3 Years. – The stock has given a return of 266% on a 1 Year basis vis-vis a return of 80% over the last 3 Years. – The compounded sales growth on a TTM bassis is 28% vis-vis a compounded sales growth of 11% over the last 3 Years. – The compounded profit growth on a TTM basis is 48% vis-vis a compounded profit growth of 3% over the last 3 Years.
Ratios
Conclusion
– is expected to give good quarter – Stock is trading at 4.14 times its book value
-The company has delivered a poor sales growth of 3.88% over past five years.
– has a low return on equity of 9.81% for last 3 years.
– has high debtors of 215.12 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 86.73 and is trading at 145.0 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
