Mehabe score: 2 G Factor: 4 Piotski Score: 4 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 4 and Piotski score of 4.
Description
Sterling and Wilson Solar Ltd is one of the leading end-to-end solar engineering, procurement and construction (EPC) solutions provider globally and is also engaged in the operation and maintenance (O&M) of solar power projects. The company is backed by strong parentage of the Shapoorji Pallonji Group (SP Group).[1] Site:SWSOLAR Main Symbol:SWSOLAR
Stock trades at 345.0, above its 50dma 341.4. It also trades above its 200dma 344.87. The stock remains bullish on techicals
The 52 week high is at 509.10 and the 52week low is at 219.00
Price Chart
P/E Chart
Sales and Margin
Strengths
– Debtor days have improved from 84.50 to 59.60 days.
-Promoter holding has increased by 4.74% over last quarter.
Weakness
– Stock is trading at 9.88 times its book value
– has low interest coverage ratio.
– has a low return on equity of -35.46% for last 3 years.
-Promoters have pledged 48.18% of their holding.
Competition
– The industry trades at a mean P/E of 21.5x. Sterling & Wils. trades at the industry’s max P/E of 25.71x. SWSOLAR trades at a P/E of x
– Industry’s mean G-Factor is 2.5 while the mean Piotski score is 6.0. SWSOLAR has a G-Factor of 4 and Piotski scoreof 4.
– Average 1 month return for industry is 6.2%. The max 1- month return was given by McNally Bharat: a return of 24.27 %
Quarterly Results
Sales for period ended Mar 2022 is Rs 1071.0 cr compared to Rs 1365.0 cr for period ended Mar 2021, a fall of 21.5%
.
.
Company reported negative operating profit of Rs -124.0 cr for period ended Mar 2022. For same period last year, operating profit was -424.0.
The EPS for quarter ended Mar 2022 is Rs -6.66 compared to Rs -22.27 for previous quarter ended Dec 2021 and Rs -21.63 for Mar 2021.
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 5199.0 cr for period ended Mar 2022 vis-vis sales of Rs 5081.0 cr for the period ended Mar 2021, a growth of 2.3%. The 3 year sales cagr stood at -14.2%.
Operating margins shrank to -18.0% for period ended Mar 2022 vis-vis -7.0% for period ended Mar 2021, contraction of 1100.0 bps.
Net Profit reported at Rs -909.0 cr for period ended Mar 2022 vis-vis sales of Rs -285.0 cr for the period ended Mar 2021, falling 0%.
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 worsened on its Return on Equity (RoE) metric. The RoE on Last Year basis was -137.0% compared to -35.0% over the last 3 Years. – The stock has given a return of 21% on a 1 Year basis vis-vis a return of % over the last 3 Years. – The compounded sales growth on a TTM bassis is 2% vis-vis a compounded sales growth of -14% over the last 3 Years. – The compounded profit growth on a TTM basis is -219% vis-vis a compounded profit growth of % over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Dec 2021 fii holding stood at 6.76% vis-vis 8.56% for Sep 2021 – Public shareholding has fallen for the period ended Dec 2021. The Dec 2021 public holding stood at 16.14% vis-vis 18.46% for Sep 2021
Conclusion
– Debtor days have improved from 84.50 to 59.60 days.
-Promoter holding has increased by 4.74% over last quarter. – Stock is trading at 9.88 times its book value
– has low interest coverage ratio.
– has a low return on equity of -35.46% for last 3 years.
-Promoters have pledged 48.18% of their holding.
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 341.4 and is trading at 345.0 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
