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Our Rating: SELL
Mehabe score: 2 G Factor: 2 Piotski Score: 4 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 4.
Description
SREI Infrastructure Finance registered as a NBFC in 1998 and was subsequently classified as Infrastructure Finance Company in 2010. Their business activities include fee based activities primarily focusing on Infrastructure Project Advisory and Financial Solutions Advisory.[1][2]Site:SREINFRAMain Symbol:SREINFRA
Stock trades at 5.4, below its 50dma 5.63 and below its 200dma 7.27. The stock remains bearish on technicals
The 52 week high is at 18.39 and the 52week low is at 3.47
Price Chart
P/E Chart
Sales and Margin
Strengths
–
Weakness
– has low interest coverage ratio.
-The company has delivered a poor sales growth of 1.28% over past five years.
– has a low return on equity of -80.07% for last 3 years.
-Contingent liabilities of Rs.768.55 Cr.
Competition
– The industry trades at a mean P/E of 25.7x. Bajaj Finance trades at the industry’s max P/E of 83.88x. SREINFRA trades at a P/E of x
– Industry’s mean G-Factor is 3.5 while the mean Piotski score is 6.0. SREINFRA has a G-Factor of 2 and Piotski scoreof 4.
– Average 1 month return for industry is 0.2%. The max 1- month return was given by SREI Infra. Fin.: a return of 8.0 %
Quarterly Results
Sales for period ended Sep 2021 is Rs 716.0 cr compared to Rs 1171.0 cr for period ended Sep 2020, a fall of 38.9%
Company reported negative operating profit of Rs -929.0 cr for period ended Sep 2021. For same period last year, operating profit was 1008.0
The EPS for Sep 2021 was Rs -39.14 compared to Rs -19.32 for previous quarter ended Jun 2021 and Rs 0.09 for Sep 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 2571.0 cr for period ended TTM vis-vis sales of Rs 3447.0 cr for the period ended Mar 2021, a fall of 34.1%. The 3 year sales cagr stood at -27.1%.
Operating margins shrank to -234.0% for period ended TTM vis-vis -90.0% for period ended Mar 2021, contraction of 14400.0 bps.
Net Profit reported at Rs -10308.0 cr for period ended TTM vis-vis sales of Rs -7339.0 cr for the period ended Mar 2021, falling 0%.
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 608.0 cr for period ended Mar 2021 vis-vis Rs 198.0 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 worsened on its Return on Equity (RoE) metric. The RoE on Last Year basis was -1740.0% compared to -80.0% over the last 3 Years. – The stock has given a return of -19% on a 1 Year basis vis-vis a return of -47% over the last 3 Years. – The compounded sales growth on a TTM bassis is -54% vis-vis a compounded sales growth of -14% over the last 3 Years. – The compounded profit growth on a TTM basis is -55727% vis-vis a compounded profit growth of % over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Sep 2021 fii holding stood at 0.96% vis-vis 0.96% for Jun 2021 – Public shareholding has remained largely constant. The Sep 2021 public holding stood at 38.24% vis-vis 38.24% for Jun 2021
Conclusion
– – has low interest coverage ratio.
-The company has delivered a poor sales growth of 1.28% over past five years.
– has a low return on equity of -80.07% for last 3 years.
-Contingent liabilities of Rs.768.55 Cr.
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 5.63 and is trading at 5.4. 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
