Mehabe score: 2 G Factor: 2 Piotski Score: 2 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 2.
Description
Thomas Cook offers a broad spectrum of services that include Foreign Exchange, Corporate Travel, MICE, Leisure Travel, Visa & Passport services, and E-Business. The company set up its first office in India in 1881.
The Thomas Cook India Group spans over 25 countries across 5 continents with a team of over 8388 people
The company has 19 brands under its name for eg: SITA, TCI, and Distant Frontiers.
Main Points
Travel and Related Services (84% of the Revenue)
Leisure Travel Outbound and Domestic (44% of Travel and Related Services Revenue) #
Leisure outbound business caters to both, Group Tour and Individual Travel customers, traveling to foreign destinations from India and Hong Kong. Domestic leisure segment engages in customer’s tour holidays within India, delivered by Thomas Cook India as well as SOTC brands.Site:THOMASCOOKMain Symbol:THOMASCOOK
Stock trades at 60.5, below its 50dma 60.79. However it is trading above its 200dma 52.18. 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 60.79.
The 52 week high is at 71.50 and the 52week low is at 25.20
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
-Stock is trading at 1.19 times its book value
Weakness
– has low interest coverage ratio.
-The company has delivered a poor sales growth of -33.46% over past five years.
– has a low return on equity of -1.04% for last 3 years.
-Debtor days have increased from 43.37 to 58.94 days.
Competition
– The industry trades at a mean P/E of 45.6x. Easy Trip Plann. trades at the industry’s max P/E of 79.91x. THOMASCOOK trades at a P/E of x
– Industry’s mean G-Factor is 3.3 while the mean Piotski score is 7.0. THOMASCOOK has a G-Factor of 2 and Piotski scoreof 2.
– Average 1 month return for industry is 9.5%. The max 1- month return was given by Transcorp Intl.: a return of 43.87 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 288.0 cr compared to Rs 85.0 cr for period ended Jun 2020, a rise of 238.8%
Company reported negative operating profit of Rs -109.0 cr for period ended Jun 2021. For same period last year, operating profit was -126.0
The EPS for Jun 2021 was Rs -2.21 compared to Rs -0.27 for previous quarter ended Mar 2021 and Rs -2.49 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 998.0 cr for period ended TTM vis-vis sales of Rs 795.0 cr for the period ended Mar 2021, a healthy growth of 20.3%. The 3 year sales cagr stood at -46.7%.
Operating margins expanded to -34.0% for period ended TTM vis-vis -44.0% for period ended Mar 2021, expansion of 1000.0 bps.
Net Profit reported at Rs -243.0 cr for period ended TTM vis-vis sales of Rs -254.0 cr for the period ended Mar 2021, rising 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 -14.0% compared to -1.0% over the last 3 Years. – The stock has given a return of 108% 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 -78% vis-vis a compounded sales growth of -59% over the last 3 Years. – The compounded profit growth on a TTM basis is -116% vis-vis a compounded profit growth of % over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Jun 2021 fii holding stood at 0.61% vis-vis 0.94% for Mar 2021 – Public shareholding has remained largely constant. The Jun 2021 public holding stood at 19.22% vis-vis 18.59% for Mar 2021
Conclusion
– has reduced debt.
-Stock is trading at 1.19 times its book value – has low interest coverage ratio.
-The company has delivered a poor sales growth of -33.46% over past five years.
– has a low return on equity of -1.04% for last 3 years.
-Debtor days have increased from 43.37 to 58.94 days.
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 60.79 and is trading at 60.5. 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
