Mehabe score: 1 G Factor: 1 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 1 and Piotski score of 3.
Description
North Eastern Carrying Corporation Ltd provides freight transportation services to bulk and retail customers, largely in the Full Truckload (FTL) segment, and other services such as warehousing and packing.[1] Site:NECCLTD Main Symbol:NECCLTD
Stock trades at 21.4, below its 50dma 21.7. However it is trading above its 200dma 17.95. The stock remains weak in the short term due to near term bearish momentum. However overall bullish structure remains intact. Price action will further build up as it moves above its dma50, currently situated at 21.7.
The 52 week high is at 29.60 and the 52week low is at 6.55
Price Chart
P/E Chart
Sales and Margin
Strengths
– Stock is trading at 1.07 times its book value
Weakness
– Though the company is reporting repeated profits, it is not paying out dividend
-The company has delivered a poor sales growth of -15.60% over past five years.
-Tax rate seems low
– has a low return on equity of 4.71% for last 3 years.
– has high debtors of 165.17 days.
Competition
– The industry trades at a mean P/E of 24.7x. Mahindra Logis. trades at the industry’s max P/E of 85.46x. NECCLTD trades at a P/E of 19.0x
– Industry’s mean G-Factor is 2.4 while the mean Piotski score is 6.0. NECCLTD has a G-Factor of 1 and Piotski scoreof 3.
– Average 1 month return for industry is -4.5%. The max 1- month return was given by Sindhu Trade: a return of 47.95 %
Quarterly Results
Sales for period ended Dec 2021 is Rs 55.04 cr compared to Rs 62.56 cr for period ended Dec 2020, a fall of 12.0%
.
vis-vis 2.56 for period ended Dec 2020 .
Operating Margins expanded 212.2 bps for period ended Dec 2021 vis-vis Dec 2020.
Company reported operating profit of Rs 3.42 cr for period ended Dec 2021 and operating profit margin at 6.2 % for same period.
The EPS for quarter ended Dec 2021 is Rs 0.23 compared to Rs 0.23 for previous quarter ended Sep 2021 and Rs 0.17 for Dec 2020.
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 256.0 cr for period ended TTM vis-vis sales of Rs 231.0 cr for the period ended Mar 2021, a growth of 9.8%. The 3 year sales cagr stood at -9.3%.
Operating margins expanded to 6.0% for period ended TTM vis-vis 4.0% for period ended Mar 2021, expansion of 200.0 bps.
Net Profit reported at Rs 6.0 cr for period ended TTM vis-vis sales of Rs 1.0 cr for the period ended Mar 2021, rising 83.3%.
Company recorded a Net Profit CAGR of 6.3% 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 stock has given a return of 107% on a 1 Year basis vis-vis a return of 40% over the last 3 Years. – The compounded sales growth on a TTM bassis is -4% vis-vis a compounded sales growth of -16% over the last 3 Years. – The compounded profit growth on a TTM basis is 359% vis-vis a compounded profit growth of -26% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Dec 2021 fii holding stood at 0.39% vis-vis 0.0% for Sep 2021 – Public shareholding has remained largely constant. The Dec 2021 public holding stood at 46.94% vis-vis 47.32% for Sep 2021
Conclusion
– Stock is trading at 1.07 times its book value – Though the company is reporting repeated profits, it is not paying out dividend
-The company has delivered a poor sales growth of -15.60% over past five years.
-Tax rate seems low
– has a low return on equity of 4.71% for last 3 years.
– has high debtors of 165.17 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 21.7 and is trading at 21.4. 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
