Mehabe score: 3 G Factor: 3 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 3 and Piotski score of 3.
Description
AKME STAR HOUSING FINANCE LTD. is a housing finance company that started in 2005, that provides home loans to Low and Mid-Income Group households It is registered as a Primary Lending Institution (PLI) under the Pradhan Mantri Awas Yojana (PMAY). Currently, the business is spread across Rajasthan, Gujarat, Madhya Pradesh, Maharashtra, and Tamil Nadu. Site:STARHFL Main Symbol:STARHFL
Stock trades at 89.4, below its 50dma 840.21 and below its 200dma 883.03. The stock remains bearish on technicals
The 52 week high is at 940.00 and the 52week low is at 753.80
Price Chart
P/E Chart
Sales and Margin
Strengths
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Weakness
– Stock is trading at 2.73 times its book value
– has low interest coverage ratio.
– has a low return on equity of 8.87% for last 3 years.
-Promoter holding has decreased over last 3 years: -11.46%
Competition
– The industry trades at a mean P/E of 26.1x. Star Housing Fin trades at the industry’s max P/E of 218.12x. STARHFL trades at a P/E of 218.0x
– Industry’s mean G-Factor is 3.5 while the mean Piotski score is 7.0. STARHFL has a G-Factor of 3 and Piotski scoreof 3.
– Average 1 month return for industry is 1.6%. The max 1- month return was given by AAVAS Financiers: a return of 13.21 %
Quarterly Results
Sales for period ended Dec 2021 is Rs 4.71 cr compared to Rs 4.12 cr for period ended Dec 2020, a rise of 14.3% .
vis-vis 2.56 for period ended Dec 2020 .
Operating Margins contracted -1861.2 bps for period ended Dec 2021 vis-vis Dec 2020.
Company reported operating profit of Rs 2.05 cr for period ended Dec 2021 and operating profit margin at 43.5 % for same period.
The EPS for quarter ended Dec 2021 is Rs 0.18 compared to Rs 0.24 for previous quarter ended Sep 2021 and Rs 0.52 for Dec 2020.
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 17.78 cr for period ended TTM vis-vis sales of Rs 15.69 cr for the period ended Mar 2021, a healthy growth of 11.8%. The 3 year sales cagr stood at 14.9%.
Operating margins shrank to 34.14% for period ended TTM vis-vis 46.78% for period ended Mar 2021, contraction of 1264.0 bps.
Net Profit reported at Rs 0.16 cr for period ended TTM vis-vis sales of Rs 1.56 cr for the period ended Mar 2021, falling 875.0%.
Company reported a poor Net Profit CAGR of -66.1% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities: Rs -9.01 cr for period ended Mar 2021 vis-vis Rs -10.67 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 3.0% compared to 9.0% over the last 3 Years. – The stock has given a return of 5% on a 1 Year basis vis-vis a return of 9% over the last 3 Years. – The compounded sales growth on a TTM bassis is 8% vis-vis a compounded sales growth of 31% over the last 3 Years. – The compounded profit growth on a TTM basis is -83% vis-vis a compounded profit growth of -19% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Dec 2021 fii holding stood at 0.0% vis-vis 0.0% for Sep 2021 – Public shareholding has remained largely constant. The Dec 2021 public holding stood at 58.79% vis-vis 59.1% for Sep 2021
Conclusion
– – Stock is trading at 2.73 times its book value
– has low interest coverage ratio.
– has a low return on equity of 8.87% for last 3 years.
-Promoter holding has decreased over last 3 years: -11.46%
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 840.21 and is trading at 89.4. 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
