Mehabe score: 1 G Factor: 2 Piotski Score: 4 The stock has a rating SELL. 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 4.
Description
Inditrade Capital Limited is a financial services company offering Microfinance, Agri-Commodity finance and MSME financing among other services. [1] Site:INDICAP Main Symbol:INDICAP
Stock trades at 34.5, below its 50dma 34.97 and below its 200dma 35.16. The stock remains bearish on technicals
The 52 week high is at 54.50 and the 52week low is at 26.15
Price Chart
P/E Chart
Sales and Margin
Strengths
– Stock is trading at 0.56 times its book value
– is expected to give good quarter
Weakness
– Though the company is reporting repeated profits, it is not paying out dividend
– has low interest coverage ratio.
– has a low return on equity of 6.75% for last 3 years.
-Promoters have pledged 32.31% of their holding.
Competition
– The industry trades at a mean P/E of 25.1x. Bajaj Finance trades at the industry’s max P/E of 72.41x. INDICAP trades at a P/E of 16.1x
– Industry’s mean G-Factor is 3.2 while the mean Piotski score is 6.0. INDICAP has a G-Factor of 2 and Piotski scoreof 4.
– Average 1 month return for industry is -6.7%. The max 1- month return was given by Cholaman.Inv.&Fn: a return of 11.73 %
Quarterly Results
Sales for period ended Dec 2021 is Rs 67.35 cr compared to Rs 77.34 cr for period ended Dec 2020, a fall of 12.9%
.
vis-vis 11.69 for period ended Dec 2020 .
Operating Margins expanded 286.6 bps for period ended Dec 2021 vis-vis Dec 2020.
Company reported operating profit of Rs 12.11 cr for period ended Dec 2021 and operating profit margin at 18.0 % for same period.
The EPS for quarter ended Dec 2021 is Rs 0.21 compared to Rs 0.65 for previous quarter ended Sep 2021 and Rs 0.75 for Dec 2020.
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 169.0 cr for period ended TTM vis-vis sales of Rs 178.0 cr for the period ended Mar 2021, a fall of 5.3%. The 3 year sales cagr stood at 30.5%.
Operating margins shrank to 20.0% for period ended TTM vis-vis 23.0% for period ended Mar 2021, contraction of 300.0 bps.
Net Profit reported at Rs 4.0 cr for period ended TTM vis-vis sales of Rs 6.0 cr for the period ended Mar 2021, falling 50.0%.
Company reported a poor Net Profit CAGR of -30.7% over the last 3 years
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 had stable/constant Return on Equity (RoE) metric. The RoE on Last Year basis was 5.0% compared to 7.0% over the last 3 Years. – The stock has given a return of -4% on a 1 Year basis vis-vis a return of -2% over the last 3 Years. – The compounded sales growth on a TTM bassis is 19% vis-vis a compounded sales growth of 34% over the last 3 Years. – The compounded profit growth on a TTM basis is -40% vis-vis a compounded profit growth of -11% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Dec 2021 fii holding stood at 0.19% vis-vis 0.19% for Sep 2021 – Public shareholding has remained largely constant. The Dec 2021 public holding stood at 25.9% vis-vis 25.9% for Sep 2021
Conclusion
– Stock is trading at 0.56 times its book value
– is expected to give good quarter – Though the company is reporting repeated profits, it is not paying out dividend
– has low interest coverage ratio.
– has a low return on equity of 6.75% for last 3 years.
-Promoters have pledged 32.31% of their holding.
Fundamentally, the stock remains weak. The business fundamentals are on shaky ground. Weak near term results have dampened and questioned business drivers. We suggest to wait for a upturn in business performance.
Technically, the stock reflects the poor fundamentals. The stock remains below its 50 DMA 34.97 and is trading at 34.5. It has shown near term lack of bullish momentum. We suggest to observe price action. However as investors, who like to avoid timing the markets, we suggest to avoid the stock
