Mehabe score: 5 G Factor: 2 Piotski Score: 7 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 2 and Piotski score of 7.
Description
Network 18 Media & Investments is engaged in activities spanning across Digital Content, Print and Allied Businesses.(Source : 202003-01 Annual Report Page No:15)Site:NETWORK18Main Symbol:NETWORK18
Stock trades at 50.0, above its 50dma 48.17. It also trades above its 200dma 41.19. The stock remains bullish on techicals
The 52 week high is at 58.40 and the 52week low is at 31.10
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
Weakness
– Stock is trading at 9.59 times its book value
– has a low return on equity of -23.41% for last 3 years.
-Contingent liabilities of Rs.3425.40 Cr.
– might be capitalizing the interest cost
Competition
– The industry trades at a mean P/E of 28.0x. Netwrk.18 Media trades at the industry’s max P/E of 162.33x. NETWORK18 trades at a P/E of 162.0x
– Industry’s mean G-Factor is 4.0 while the mean Piotski score is 9.0. NETWORK18 has a G-Factor of 2 and Piotski scoreof 7.
– Average 1 month return for industry is 11.3%. The max 1- month return was given by C D S L: a return of 51.11 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 1214.43 cr compared to Rs 807.07 cr for period ended Jun 2020, a rise of 50.5%
Operating Profits reported at Rs 182.29 cr for period ended Jun 2021 vis-vis 25.2 for period ended Jun 2020 .
Operating Margins expanded 1188.8 bps for period ended Jun 2021 vis-vis Jun 2020 .
The EPS for Jun 2021 was Rs 0.09 compared to Rs 0.37 for previous quarter ended Mar 2021 and Rs -0.59 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 5112.0 cr for period ended TTM vis-vis sales of Rs 4705.0 cr for the period ended Mar 2021, a growth of 8.0%.
Operating margins expanded to 18.0% for period ended TTM vis-vis 16.0% for period ended Mar 2021, expansion of 200.0 bps.
Net Profit reported at Rs 104.0 cr for period ended TTM vis-vis sales of Rs 32.0 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 1346.0 cr for period ended Mar 2021 vis-vis Rs 78.0 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 6.0% compared to -23.0% over the last 3 Years. – The stock has given a return of 5% on a 1 Year basis vis-vis a return of 5% over the last 3 Years. – The compounded sales growth on a TTM bassis is -12% vis-vis a compounded sales growth of 37% over the last 3 Years. – The compounded profit growth on a TTM basis is 114% vis-vis a compounded profit growth of 30% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2021 fii holding stood at 3.81% vis-vis 3.01% for Dec 2020 – Public shareholding has remained largely constant. The Mar 2021 public holding stood at 21.11% vis-vis 21.63% for Dec 2020
Conclusion
– has reduced debt. – Stock is trading at 9.59 times its book value
– has a low return on equity of -23.41% for last 3 years.
-Contingent liabilities of Rs.3425.40 Cr.
– might be capitalizing the interest cost
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 48.17 and is trading at 50.0 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
