Mehabe score: 5 G Factor: 2 Piotski Score: 2 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 2 and Piotski score of 2.
Description
UFO Moviez India is engaged into the business of providing digital cinema services.Site:UFOMain Symbol:UFO
Stock trades at 106.0, above its 50dma 93.83. It also trades above its 200dma 86.89. The stock remains bullish on techicals
The 52 week high is at 110.75 and the 52week low is at 64.80
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
-Stock is trading at 1.13 times its book value
Weakness
– has low interest coverage ratio.
-The company has delivered a poor sales growth of -31.41% over past five years.
-Promoter holding is low: 30.57%
– has a low return on equity of -1.62% for last 3 years.
-Promoters have pledged 26.15% of their holding.
– has high debtors of 164.18 days.
-‘s cost of borrowing seems high
Competition
– The industry trades at a mean P/E of 12.3x. Jagran Prakashan trades at the industry’s max P/E of 19.71x. UFO trades at a P/E of x
– Industry’s mean G-Factor is 3.3 while the mean Piotski score is 7.0. UFO has a G-Factor of 2 and Piotski scoreof 2.
– Average 1 month return for industry is 4.8%. The max 1- month return was given by H T Media: a return of 20.22 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 27.0 cr compared to Rs 17.0 cr for period ended Jun 2020, a rise of 58.8%
Company reported negative operating profit of Rs -19.0 cr for period ended Jun 2021. For same period last year, operating profit was -25.0
The EPS for Jun 2021 was Rs -9.41 compared to Rs -8.99 for previous quarter ended Mar 2021 and Rs -11.72 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 97.0 cr for period ended TTM vis-vis sales of Rs 87.0 cr for the period ended Mar 2021, a healthy growth of 10.3%. The 3 year sales cagr stood at -45.9%.
Operating margins expanded to -87.0% for period ended TTM vis-vis -102.0% for period ended Mar 2021, expansion of 1500.0 bps.
Net Profit reported at Rs -111.0 cr for period ended TTM vis-vis sales of Rs -118.0 cr for the period ended Mar 2021, rising 0%.
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 -36.0% compared to -2.0% over the last 3 Years. – The stock has given a return of 45% on a 1 Year basis vis-vis a return of -36% over the last 3 Years. – The compounded sales growth on a TTM bassis is -83% vis-vis a compounded sales growth of -47% over the last 3 Years. – The compounded profit growth on a TTM basis is -477% 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 2.01% vis-vis 20.82% for Mar 2021 – Public shareholding has risen for the period ended Jun 2021. The Jun 2021 public holding stood at 67.41% vis-vis 48.6% for Mar 2021
Conclusion
– has reduced debt.
-Stock is trading at 1.13 times its book value – has low interest coverage ratio.
-The company has delivered a poor sales growth of -31.41% over past five years.
-Promoter holding is low: 30.57%
– has a low return on equity of -1.62% for last 3 years.
-Promoters have pledged 26.15% of their holding.
– has high debtors of 164.18 days.
-‘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 93.83 and is trading at 106.0 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
