Mehabe score: 6 G Factor: 5 Piotski Score: 3 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 5 and Piotski score of 3.
Description
Indus Towers Limited is engaged in the business of object of, inter-alia, setting up, operating and maintaining wireless communication towers.#
Main Points
Leadership Position
Presently, the company has over 175,000 towers and 318,300 locations and a nationwide presence covering all 22 telecom circles.#
It has a tenancy ratio of 1.8 times.#
It has a tower market share of 31% and tenancy market share of 42% which makes it leader in the telecom tower industry in India.Site:INDUSTOWERMain Symbol:INDUSTOWER
Stock trades at 236.0, below its 50dma 244.8 and below its 200dma 238.58. The stock remains bearish on technicals
The 52 week high is at 282.65 and the 52week low is at 161.30
Price Chart
P/E Chart
Sales and Margin
Strengths
– Stock is providing a good dividend yield of 8.51%.
– is expected to give good quarter
– has been maintaining a healthy dividend payout of 104.54%
Weakness
– might be capitalizing the interest cost
-Promoters have pledged 40.26% of their holding.
-Debtor days have increased from 49.82 to 100.14 days.
Competition
– The industry trades at a mean P/E of 17.5x. Indus Towers trades at the industry’s max P/E of 17.64x. INDUSTOWER trades at a P/E of 17.6x
– Industry’s mean G-Factor is 4.0 while the mean Piotski score is 5.0. INDUSTOWER has a G-Factor of 5 and Piotski scoreof 3.
– Average 1 month return for industry is -4.6%. The max 1- month return was given by Suyog Telematics: a return of -2.02 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 6492.0 cr compared to Rs 1682.0 cr for period ended Mar 2020, a rise of 286.0%
Operating Profits reported at Rs 3412.0 cr for period ended Mar 2021 vis-vis 863.0 for period ended Mar 2020 .
Operating Margins expanded 124.9 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 5.06 compared to Rs 3.63 for previous quarter ended Dec 2020 and Rs 3.51 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 13954.0 cr for period ended Mar 2021 vis-vis sales of Rs 6743.0 cr for the period ended Mar 2020, a healthy growth of 51.7%. The 3 year sales cagr stood at 28.2%.
Operating margins shrank to 51.0% for period ended Mar 2021 vis-vis 53.0% for period ended Mar 2020, contraction of 200.0 bps.
Net Profit reported at Rs 3779.0 cr for period ended Mar 2021 vis-vis sales of Rs 3299.0 cr for the period ended Mar 2020, rising 12.7%.
Company recorded a healthy Net Profit CAGR of 14.9% 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 7481.0 cr for period ended Mar 2021 vis-vis Rs 2315.0 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 improved its Return on Equity (RoE) metric. The RoE on Last Year basis was 25.0% compared to 20.0% over the last 3 Years. – The stock has given a return of 13% 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 107% vis-vis a compounded sales growth of 28% over the last 3 Years. – The compounded profit growth on a TTM basis is 19% vis-vis a compounded profit growth of 12% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2021 fii holding stood at 27.08% vis-vis 26.63% for Dec 2020 – Public shareholding has remained largely constant. The Mar 2021 public holding stood at 0.64% vis-vis 0.73% for Dec 2020
Conclusion
– Stock is providing a good dividend yield of 8.51%.
– is expected to give good quarter
– has been maintaining a healthy dividend payout of 104.54% – might be capitalizing the interest cost
-Promoters have pledged 40.26% of their holding.
-Debtor days have increased from 49.82 to 100.14 days.
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 244.8 and is trading at 236.0. 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
