Mehabe score: 5 G Factor: 3 Piotski Score: 5 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 5.
Description
Infibeam Avenues is primarily engaged in business of software development services, maintenance, web development, payment gateway services, e-commerce and other ancillary services.(Source : 202003-01 Annual Report Page No:136) Site:INFIBEAM Main Symbol:INFIBEAM
Stock trades at 43.4, above its 50dma 42.14. It also trades above its 200dma 42.98. The stock remains bullish on techicals
The 52 week high is at 58.45 and the 52week low is at 36.70
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
– is almost debt free.
– is expected to give good quarter
-‘s median sales growth is 30.98% of last 10 years
Weakness
– Promoter holding is low: 31.07%
-Tax rate seems low
– has a low return on equity of 3.58% for last 3 years.
-Dividend payout has been low at 5.12% of profits over last 3 years
-Debtor days have increased from 25.95 to 39.36 days.
-Promoter holding has decreased over last 3 years: -7.31%
Competition
– The industry trades at a mean P/E of 37.1x. Tata Elxsi trades at the industry’s max P/E of 93.74x. INFIBEAM trades at a P/E of 70.4x
– Industry’s mean G-Factor is 3.4 while the mean Piotski score is 9.0. INFIBEAM has a G-Factor of 3 and Piotski scoreof 5.
– Average 1 month return for industry is -5.8%. The max 1- month return was given by Tata Elxsi: a return of 22.41 %
Quarterly Results
Sales for period ended Sep 2021 is Rs 311.0 cr compared to Rs 149.0 cr for period ended Sep 2020, a rise of 108.7% .
vis-vis 32.0 for period ended Sep 2020 .
Operating Margins contracted -1054.4 bps for period ended Sep 2021 vis-vis Sep 2020.
Company reported operating profit of Rs 34.0 cr for period ended Sep 2021 and operating profit margin at 10.9 % for same period.
The EPS for quarter ended Sep 2021 is Rs 0.14 compared to Rs 0.11 for previous quarter ended Jun 2021 and Rs 0.07 for Sep 2020.
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 957.0 cr for period ended TTM vis-vis sales of Rs 676.0 cr for the period ended Mar 2021, a healthy growth of 29.4%. The 3 year sales cagr stood at -6.2%.
Operating margins shrank to 14.0% for period ended TTM vis-vis 21.0% for period ended Mar 2021, contraction of 700.0 bps.
Net Profit reported at Rs 82.0 cr for period ended TTM vis-vis sales of Rs 72.0 cr for the period ended Mar 2021, rising 12.2%.
Company reported a poor Net Profit CAGR of -13.6% 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 155.0 cr for period ended Mar 2021 vis-vis Rs 22.0 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 3.0% compared to 4.0% over the last 3 Years. – The stock has given a return of 23% on a 1 Year basis vis-vis a return of 37% over the last 3 Years. – The compounded sales growth on a TTM bassis is 78% vis-vis a compounded sales growth of -7% over the last 3 Years. – The compounded profit growth on a TTM basis is 7% vis-vis a compounded profit growth of -6% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Dec 2021 fii holding stood at 7.59% vis-vis 7.13% for Sep 2021 – Public shareholding has remained largely constant. The Dec 2021 public holding stood at 60.89% vis-vis 61.35% for Sep 2021
Conclusion
– has reduced debt.
– is almost debt free.
– is expected to give good quarter
-‘s median sales growth is 30.98% of last 10 years – Promoter holding is low: 31.07%
-Tax rate seems low
– has a low return on equity of 3.58% for last 3 years.
-Dividend payout has been low at 5.12% of profits over last 3 years
-Debtor days have increased from 25.95 to 39.36 days.
-Promoter holding has decreased over last 3 years: -7.31%
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 42.14 and is trading at 43.4 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
