Mehabe score: 5 G Factor: 3 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 3 and Piotski score of 2.
Description
Future Consumer is engaged in the business of sourcing, manufacturing, branding, marketing and distribution of fast moving consumer goods (FMCG), Food and Processed Food Products in Urban and Rural India. Earlier the Company was regulated by the Reserve Bank of India (the RBI) as a non-deposit taking Non-Banking Financial Company (NBFC).(Source : 201903 Annual Report Page No: 102) Site:FCONSUMER Main Symbol:FCONSUMER
Stock trades at 7.5, above its 50dma 7.43. However it is trading below its 200dma 7.79. The stock remains weak though short term bullish momentum supports price action. It needs to close above 7.79 for bullish price action to continue
The 52 week high is at 11.95 and the 52week low is at 5.85
Price Chart
P/E Chart
Sales and Margin
Strengths
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Weakness
– Stock is trading at 2.80 times its book value
– has low interest coverage ratio.
-Promoter holding has decreased over last quarter: -2.31%
-The company has delivered a poor sales growth of -6.99% over past five years.
-Promoter holding is low: 12.16%
– has a low return on equity of -22.49% for last 3 years.
-Promoters have pledged 86.12% of their holding.
– has high debtors of 193.63 days.
Competition
– The industry trades at a mean P/E of 40.4x. Adani Enterp. trades at the industry’s max P/E of 169.78x. FCONSUMER trades at a P/E of x
– Industry’s mean G-Factor is 3.2 while the mean Piotski score is 8.0. FCONSUMER has a G-Factor of 3 and Piotski scoreof 2.
– Average 1 month return for industry is 2.0%. The max 1- month return was given by MMTC: a return of 25.94 %
Quarterly Results
Sales for period ended Sep 2021 is Rs 450.0 cr compared to Rs 239.0 cr for period ended Sep 2020, a rise of 88.3% .
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The EPS for quarter ended Sep 2021 is Rs -0.13 compared to Rs -0.16 for previous quarter ended Jun 2021 and Rs -0.76 for Sep 2020.
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 1321.0 cr for period ended TTM vis-vis sales of Rs 1185.0 cr for the period ended Mar 2021, a healthy growth of 10.3%. The 3 year sales cagr stood at -30.2%.
Operating margins expanded to -15.0% for period ended TTM vis-vis -26.0% for period ended Mar 2021, expansion of 1100.0 bps.
Net Profit reported at Rs -325.0 cr for period ended TTM vis-vis sales of Rs -483.0 cr for the period ended Mar 2021, rising 0%.
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 95.0 cr for period ended Mar 2021 vis-vis Rs 33.0 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 worsened on its Return on Equity (RoE) metric. The RoE on Last Year basis was -64.0% compared to -22.0% over the last 3 Years. – The stock has given a return of -12% on a 1 Year basis vis-vis a return of -44% over the last 3 Years. – The compounded sales growth on a TTM bassis is -47% vis-vis a compounded sales growth of -27% over the last 3 Years. – The compounded profit growth on a TTM basis is -14% vis-vis a compounded profit growth of % over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Dec 2021 fii holding stood at 10.25% vis-vis 10.55% for Sep 2021 – Public shareholding has remained largely constant. The Dec 2021 public holding stood at 75.61% vis-vis 74.28% for Sep 2021
Conclusion
– – Stock is trading at 2.80 times its book value
– has low interest coverage ratio.
-Promoter holding has decreased over last quarter: -2.31%
-The company has delivered a poor sales growth of -6.99% over past five years.
-Promoter holding is low: 12.16%
– has a low return on equity of -22.49% for last 3 years.
-Promoters have pledged 86.12% of their holding.
– has high debtors of 193.63 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 7.43 and is trading at 7.5 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
