Summarising analysis after Q3 results.
Positives
High market share (2-3 major players in India)
Zero debt
Increase in OPM from 10% to 20% in last 5 years
More than 500cr cash at Q3
Bought more than 400 cr intangible assets in Q3 (gives huge potential in future)
Median PE 29.8 current PE 24.6
Roce > 37%
Roe > 31%
Stock price came down 25% since Q3 results (consolidation phase) which gives us an opportunity to look at good entry point
Support on daily 200MA
Support on weekly 44MA
Negatives
High customer concentration
Low promoter holding (but promoters raised almost 10% stake in the last 3-4 years from 33 to 43)
Low organic growth (mostly coming from new acquisition valuefirst)
High negative cash from finance activities (mostly due to buyback and dividend, buyback is a good indication)
PB approx 6 (not cheap)
PE 24 (not ideal)
Evebidta above 10 again not ideal
Investment View long term 2-4 years where the acquisitions and latest capex benefits might start unfolding, value creation to the company.
What am I missing?
NOT A RECOMMENDATION
Disc. (Not invested)
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