Mehabe score: 2 G Factor: 2 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 2 and Piotski score of 3.
Description
CL Educate Ltd is engaged in education services including test preparation, K-12 education and vocational training.Site:CLEDUCATE
Market Cap:
Rs 163 cr
Price:
115.0
Trading pe:
x
Book-value:
201/share
Div yield:
0.87 %
Earning yield:
-10.54%
Face-value:
10.0/share
52week high:
123.90
52week low:
36.00
Technical Analysis
Stock trades at 115.0, above its 50dma 96.16. It also trades above its 200dma 77.9. The stock remains bullish on techicals
The 52 week high is at 123.90 and the 52week low is at 36.00
Price Chart
P/E Chart
Sales and Margin
Strengths
– Stock is trading at 0.57 times its book value
Weakness
– has low interest coverage ratio.
-The company has delivered a poor sales growth of 2.46% over past five years.
– has a low return on equity of -3.05% for last 3 years.
Competition
– The industry trades at a mean P/E of 18.5x. Global Education trades at the industry’s max P/E of 16.03x. CLEDUCATE trades at a P/E of x
– Industry’s mean G-Factor is 2.6 while the mean Piotski score is 9.0. CLEDUCATE has a G-Factor of 2 and Piotski scoreof 3.
– Average 1 month return for industry is 16.0%. The max 1- month return was given by VJTF Eduservices: a return of 31.05 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 46.0 cr compared to Rs 54.0 cr for period ended Mar 2020, a fall of 14.8%
Company reported negative operating profit of Rs -18.0 cr for period ended Mar 2021. For same period last year, operating profit was -30.0
The EPS for Mar 2021 was Rs -8.26 compared to Rs -0.3 for previous quarter ended Dec 2020 and Rs -44.59 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 184.0 cr for period ended Mar 2021 vis-vis sales of Rs 309.0 cr for the period ended Mar 2020, a fall of 67.9%. The 3 year sales cagr stood at -14.0%.
Operating margins shrank to -6.0% for period ended Mar 2021 vis-vis -3.0% for period ended Mar 2020, contraction of 300.0 bps.
Net Profit reported at Rs -12.0 cr for period ended Mar 2021 vis-vis sales of Rs -53.0 cr for the period ended Mar 2020, 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 -17.0% compared to -3.0% over the last 3 Years. – The stock has given a return of 154% on a 1 Year basis vis-vis a return of -8% over the last 3 Years. – The compounded sales growth on a TTM bassis is -43% vis-vis a compounded sales growth of 5% over the last 3 Years. – The compounded profit growth on a TTM basis is -272% vis-vis a compounded profit growth of % over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2021 fii holding stood at 8.7% vis-vis 8.7% for Dec 2020 – Public shareholding has remained largely constant. The Mar 2021 public holding stood at 33.39% vis-vis 33.65% for Dec 2020
Conclusion
– Stock is trading at 0.57 times its book value – has low interest coverage ratio.
-The company has delivered a poor sales growth of 2.46% over past five years.
– has a low return on equity of -3.05% 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 96.16 and is trading at 115.0 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
