Mehabe score: 4 G Factor: 2 Piotski Score: 5 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 5.
Description
Ontic Finserve is engaged in the business of Financial Advisory Company.(Source : 201903 Annual Report Page No:20) Site:ONTIC Main Symbol:ONTIC
Stock trades at 27.5, below its 50dma 27.59. However it is trading above its 200dma 18.13. 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 27.59.
The 52 week high is at 35.10 and the 52week low is at 3.11
Price Chart
P/E Chart
Sales and Margin
Strengths
– is almost debt free.
– is expected to give good quarter
Weakness
– Stock is trading at 4.82 times its book value
-Though the company is reporting repeated profits, it is not paying out dividend
– has a low return on equity of 1.16% for last 3 years.
Competition
– The industry trades at a mean P/E of 26.7x. Bajaj Finance trades at the industry’s max P/E of 72.16x. ONTIC trades at a P/E of 33.9x
– Industry’s mean G-Factor is 3.2 while the mean Piotski score is 6.0. ONTIC has a G-Factor of 2 and Piotski scoreof 5.
– Average 1 month return for industry is -3.7%. The max 1- month return was given by Cholaman.Inv.&Fn: a return of 21.71 %
Quarterly Results
Sales for period ended Dec 2021 is Rs 5.99 cr compared to Rs 0.49 cr for period ended Dec 2020, a rise of 1122.4% .
vis-vis 0.01 for period ended Dec 2020 .
Operating Margins contracted -137.3 bps for period ended Dec 2021 vis-vis Dec 2020.
Company reported operating profit of Rs 0.04 cr for period ended Dec 2021 and operating profit margin at 0.7 % for same period.
The EPS for quarter ended Dec 2021 is Rs 0.08 compared to Rs 0.43 for previous quarter ended Sep 2021 and Rs 0.01 for Dec 2020.
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 39.87 cr for period ended TTM vis-vis sales of Rs 2.29 cr for the period ended Mar 2021, a healthy growth of 94.3%. The 3 year sales cagr stood at 246.3%.
Operating margins shrank to 1.53% for period ended TTM vis-vis 2.18% for period ended Mar 2021, contraction of 65.0 bps.
Net Profit reported at Rs 0.79 cr for period ended TTM vis-vis sales of Rs 0.04 cr for the period ended Mar 2021, rising 94.9%.
Company recorded a healthy Net Profit CAGR of 150.9% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities: Rs -0.01 cr for period ended Mar 2021 vis-vis Rs -0.05 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 1.0% compared to 1.0% over the last 3 Years. – The stock has given a return of 508% on a 1 Year basis vis-vis a return of 56% over the last 3 Years. – The compounded sales growth on a TTM bassis is 654% vis-vis a compounded sales growth of -16% over the last 3 Years. – The compounded profit growth on a TTM basis is 343% vis-vis a compounded profit growth of 0% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Dec 2021 public holding stood at 100.0% vis-vis 100.0% for Sep 2021
Conclusion
– is almost debt free.
– is expected to give good quarter – Stock is trading at 4.82 times its book value
-Though the company is reporting repeated profits, it is not paying out dividend
– has a low return on equity of 1.16% for last 3 years.
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 27.59 and is trading at 27.5. 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
