Mehabe score: 6 G Factor: 2 Piotski Score: 5 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 5.
Description
Aakash Exploration Services is engaged in providing Support Services of oil and gas extraction. Site:AAKASH Main Symbol:AAKASH
Stock trades at 261.0, above its 50dma 246.66. It also trades above its 200dma 208.72. The stock remains bullish on techicals
The 52 week high is at 301.00 and the 52week low is at 89.55
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
Weakness
– Stock is trading at 5.96 times its book value
-Though the company is reporting repeated profits, it is not paying out dividend
– has a low return on equity of 12.42% for last 3 years.
Competition
– The industry trades at a mean P/E of 21.9x. Aakash Explor. trades at the industry’s max P/E of 48.19x. AAKASH trades at a P/E of 48.2x
– Industry’s mean G-Factor is 3.2 while the mean Piotski score is 7.0. AAKASH has a G-Factor of 2 and Piotski scoreof 5.
– Average 1 month return for industry is 3.5%. The max 1- month return was given by Jindal Drilling: a return of 14.5 %
Quarterly Results
Sales for period ended Dec 2021 is Rs 21.97 cr compared to Rs 13.25 cr for period ended Dec 2020, a rise of 65.8% .
vis-vis 2.5 for period ended Dec 2020 .
Operating Margins contracted -266.4 bps for period ended Dec 2021 vis-vis Dec 2020.
Company reported operating profit of Rs 3.56 cr for period ended Dec 2021 and operating profit margin at 16.2 % for same period.
The EPS for quarter ended Dec 2021 is Rs 1.26 compared to Rs 1.34 for previous quarter ended Sep 2021 and Rs 0.48 for Dec 2020.
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 73.3 cr for period ended TTM vis-vis sales of Rs 59.77 cr for the period ended Mar 2021, a healthy growth of 18.5%. The 3 year sales cagr stood at 12.4%.
Operating margins shrank to 20.63% for period ended TTM vis-vis 21.37% for period ended Mar 2021, contraction of 74.0 bps.
Net Profit reported at Rs 6.28 cr for period ended TTM vis-vis sales of Rs 4.14 cr for the period ended Mar 2021, rising 34.1%.
Company recorded a healthy Net Profit CAGR of 23.8% over the last 3 years
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 had stable/constant Return on Equity (RoE) metric. The RoE on Last Year basis was 10.0% compared to 12.0% over the last 3 Years. – The stock has given a return of 189% on a 1 Year basis vis-vis a return of 174% over the last 3 Years. – The compounded sales growth on a TTM bassis is -1% vis-vis a compounded sales growth of 13% over the last 3 Years. – The compounded profit growth on a TTM basis is 24% vis-vis a compounded profit growth of 20% over the last 3 Years.
Ratios
Conclusion
– has reduced debt. – Stock is trading at 5.96 times its book value
-Though the company is reporting repeated profits, it is not paying out dividend
– has a low return on equity of 12.42% for last 3 years.
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 246.66 and is trading at 261.0 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
