Hi, Can someone pls help understand the results and the market reaction thereafter.
HondaPower posted its 3rd quarterly results; a quarter plaqued by Power outages across the nation. Headlines on 4 days of Coal left at major powerplants… I was hoping the results would be Super, specially with the economy opening up and all that…
Actual Results : Sales fell by > 6.7%; EBIDTA down by >30%
And still the market after an initial sell off gave a thumps up… Closed >3.5% higher with 4X the 20D volumes… And its not that its cheap, trading at 18.82 PE while HeroMoto Leader in 2 wheeler with 2.5X the ROCE of HondaPower trades at a lower PE multiple even though its EBIDTA was down by <17% while Honda Siel EBIDTA down by > 30%
All comparisons are YoY (Q3 FY21 to Q3FY20)… Maybe its not an apple to apple comparison, both being in different industries. but still should Honda Power command this valuation? Its netblock is also reducing…
disclosure: holding since last few years but not sure if i should continue holding