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
Shanti Educational Initiatives is engaged in the business of providing education services and activities.(Source : 201903 Annual Report Page No:73) Site:SEIL Main Symbol:SEIL
Stock trades at 228.0, above its 50dma 54.14. It also trades above its 200dma 48.7. The stock remains bullish on techicals
The 52 week high is at 61.60 and the 52week low is at 25.50
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
– is almost debt free.
Weakness
– Stock is trading at 6.53 times its book value
-Though the company is reporting repeated profits, it is not paying out dividend
– has low interest coverage ratio.
-The company has delivered a poor sales growth of -19.21% over past five years.
– has a low return on equity of 2.05% for last 3 years.
-Earnings include an other income of Rs.3.10 Cr.
-Debtor days have increased from 61.50 to 94.85 days.
Competition
– The industry trades at a mean P/E of 121.8x. Shanti Educat. trades at the industry’s max P/E of 175.07x. SEIL trades at a P/E of 175.0x
– Industry’s mean G-Factor is 3.1 while the mean Piotski score is 7.0. SEIL has a G-Factor of 2 and Piotski scoreof 7.
– Average 1 month return for industry is 30.4%. The max 1- month return was given by Shanti Educat.: a return of 131.83 %
Quarterly Results
Sales for period ended Dec 2021 is Rs 1.01 cr compared to Rs 0.18 cr for period ended Dec 2020, a rise of 461.1% .
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Company reported negative operating profit of Rs -0.47 cr for period ended Dec 2021. For same period last year, operating profit was -0.79.
The EPS for quarter ended Dec 2021 is Rs -0.39 compared to Rs 0.11 for previous quarter ended Sep 2021 and Rs -0.74 for Dec 2020.
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 3.43 cr for period ended TTM vis-vis sales of Rs 3.04 cr for the period ended Mar 2021, a healthy growth of 11.4%. The 3 year sales cagr stood at -37.7%.
Operating margins expanded to -40.23% for period ended TTM vis-vis -45.07% for period ended Mar 2021, expansion of 484.0 bps.
Net Profit reported at Rs 2.66 cr for period ended TTM vis-vis sales of Rs 2.13 cr for the period ended Mar 2021, rising 19.9%.
Company recorded a healthy Net Profit CAGR of 39.5% 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 company has had stable/constant Return on Equity (RoE) metric. The RoE on Last Year basis was 4.0% compared to 2.0% over the last 3 Years. – The stock has given a return of 70% on a 1 Year basis vis-vis a return of 21% over the last 3 Years. – The compounded sales growth on a TTM bassis is -41% vis-vis a compounded sales growth of -48% over the last 3 Years. – The compounded profit growth on a TTM basis is 246% vis-vis a compounded profit growth of 9% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Dec 2021 fii holding stood at 14.37% vis-vis 14.37% for Sep 2021 – Public shareholding has remained largely constant. The Dec 2021 public holding stood at 21.44% vis-vis 21.44% for Sep 2021
Conclusion
– has reduced debt.
– is almost debt free. – Stock is trading at 6.53 times its book value
-Though the company is reporting repeated profits, it is not paying out dividend
– has low interest coverage ratio.
-The company has delivered a poor sales growth of -19.21% over past five years.
– has a low return on equity of 2.05% for last 3 years.
-Earnings include an other income of Rs.3.10 Cr.
-Debtor days have increased from 61.50 to 94.85 days.
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 54.14 and is trading at 228.0 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
