Looked at this company’s financials because it came up on one of my screens…all numbers below are basis standalone statements of last 5 years (FY21 full year are yet to be released; anyway I would want to analyse the non-pandemic years before thinking about FY21).
I haven’t even started looking at cash flows because what I have seen in P&L and Balance Sheet is enough for me to make my investment decision at current Price levels…
It’s quite a sign of extravagant times we live in that a company whose :
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Revenue growth is declining YoY (even before the pandemic)
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Post tax Other Income (mainly P&L through investments but other non operating stuff) share of PAT is increasing YoY
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Net Profit margins is in single digits for a branded play
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Return on Equity is declining on declining Asset turnover and declining leverage :
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Operating cycle is worsening with a decline in sales efficiency :
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Pays 0% dividends - For a growing company, it’s fine to retain 100% Earnings to invest in growth; but this isn’t a growing company from what I have seen above (I wouldn’t buy the argument that they are growing through investments/acquisitions abroad - that’s an easy way to divert attention from poor core operating performance which makes up ~80% of the business).
is trading at 45 times P/E, ~10 times P/B, ~38 times EV/EBITDA.
Disclosure : Not invested