Mehabe score: 7 G Factor: 2 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 2 and Piotski score of 6.
Description
Adani Enterprises is in the business of Trading of Coal and other commodities & Coal Mine Development and Operations (MDO).Site:ADANIENTMain Symbol:ADANIENT
Stock trades at 1443.0, above its 50dma 1396.67. It also trades above its 200dma 997.99. The stock remains bullish on techicals
The 52 week high is at 1718.45 and the 52week low is at 171.20
Price Chart
P/E Chart
Sales and Margin
Strengths
– is expected to give good quarter
Weakness
– Stock is trading at 9.25 times its book value
-The company has delivered a poor sales growth of 3.06% over past five years.
– has a low return on equity of 6.13% for last 3 years.
-Dividend payout has been low at 9.24% of profits over last 3 years
Competition
– The industry trades at a mean P/E of 47.6x. 3M India trades at the industry’s max P/E of 187.58x. ADANIENT trades at a P/E of 122.0x
– Industry’s mean G-Factor is 4.0 while the mean Piotski score is 7.0. ADANIENT has a G-Factor of 2 and Piotski scoreof 6.
– Average 1 month return for industry is 2.4%. The max 1- month return was given by Rain Industries: a return of 27.86 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 12579.0 cr compared to Rs 5265.0 cr for period ended Jun 2020, a rise of 138.9%
Operating Profits reported at Rs 796.0 cr for period ended Jun 2021 vis-vis 64.0 for period ended Jun 2020 .
Operating Margins expanded 511.2 bps for period ended Jun 2021 vis-vis Jun 2020 .
The EPS for Jun 2021 was Rs 2.47 compared to Rs 2.13 for previous quarter ended Mar 2021 and Rs 0.27 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 46851.0 cr for period ended TTM vis-vis sales of Rs 39537.0 cr for the period ended Mar 2021, a healthy growth of 15.6%. The 3 year sales cagr stood at 5.1%.
Operating margins expanded to 7.0% for period ended TTM vis-vis 6.0% for period ended Mar 2021, expansion of 100.0 bps.
Net Profit reported at Rs 1165.0 cr for period ended TTM vis-vis sales of Rs 923.0 cr for the period ended Mar 2021, rising 20.8%.
Company recorded a healthy Net Profit CAGR of 17.6% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 4094.0 cr for period ended Mar 2021 vis-vis Rs 2454.0 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 6.0% compared to 6.0% over the last 3 Years. – The stock has given a return of 738% on a 1 Year basis vis-vis a return of 115% over the last 3 Years. – The compounded sales growth on a TTM bassis is 23% vis-vis a compounded sales growth of 3% over the last 3 Years. – The compounded profit growth on a TTM basis is 130% vis-vis a compounded profit growth of 12% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Jun 2021 fii holding stood at 19.65% vis-vis 20.51% for Mar 2021 – Public shareholding has remained largely constant. The Jun 2021 public holding stood at 3.29% vis-vis 3.74% for Mar 2021
Conclusion
– is expected to give good quarter – Stock is trading at 9.25 times its book value
-The company has delivered a poor sales growth of 3.06% over past five years.
– has a low return on equity of 6.13% for last 3 years.
-Dividend payout has been low at 9.24% of profits over 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 1396.67 and is trading at 1443.0 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
