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INVESTMENT INSIGHTS

Check Before You Invest : Creative Merchants Ltd

BSE: 538504 NSE: ISIN: INE896P01011
  |   Sector:  Retail   |   Industry:  Retailing

Snapshot

Q.1 Which industry/sub-sector does Creative Merchants Ltd belong to?
Creative Merchants Ltd belongs to the Retail sector, operating specifically within the Retailing segment.
Q.2 Is Creative Merchants Ltd a good quality company?
Creative Merchants Ltd is a quality company, based on a 10 year financial track record.
Q.3 Is Creative Merchants Ltd undervalued or overvalued?
Creative Merchants Ltd appears Undervalued, as its key valuation ratios are below with their past averages.
Q.4 Is Creative Merchants Ltd a good buy now?
Creative Merchants Ltd is not a good buy now, based on weak price trend analysis suggesting prices may fall. However, you need to check its quality and valuation before making a decision

Performance Analysis

Q.1 Revenue growth of Creative Merchants Ltd?
Creative Merchants Ltd revenue growth is -91.1% for FY-2018 , which is below its 5 year CAGR of 80.4% , indicating slower growth.
Q.2 Gross Profit margin of Creative Merchants Ltd?
Creative Merchants Ltd Gross profit margin which is the profit after deduction of direct costs, is 0.5% for FY-2018 , which is in line with its 5 year median of 0.5% , indicating stable margins.
Q.3 Operating Profit Margin of Creative Merchants Ltd?
Creative Merchants Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is -8.78% for FY-2018 , which is below its 5 year median of 0.13% indicating decreasing margins.
Q.4 Net Profit Margin of Creative Merchants Ltd?
Creative Merchants Ltd Net Profit Margin is 0.32% for FY-2018 , is in line with with its 5 year median of 0.32%, indicating stable margins.
Current Level Historic Median
Gross Profit Margin 0.5 0.5
Operating Profit Margin -8.78 0.13
Net Profit Margin 0.32 0.32
Q.5 Return on Asset of Creative Merchants Ltd?
Creative Merchants Ltd Return on Asset is 0.09(x), which is in line with its 5 year historical median of 0.09(x), indicating stable asset utilization efficiency.
Q.6 Return on Equity (ROE) of Creative Merchants Ltd?
Creative Merchants Ltd Return on equity is 0.13% for FY-2018 , which is below its historical median of 0.28%, indicating the business is making worse use of its shareholders capital.
Q.7 Return on capital employed (ROCE) of Creative Merchants Ltd?
Creative Merchants Ltd Return on capital employed is 0.25% for FY-2018 , which is below its estimated weighted average cost of capital(WACC) 14%, indicating value preservation.
Q.8 Cash conversion cycle of Creative Merchants Ltd?
Creative Merchants Ltd Cash conversion cycle is -315922 , below its historical median of 23 , indicating improved working capital management. However, you need to compare this with its peers in the industry.
Current Level Historic Median
Asset Turnover 0.28 1.05
ROE 0.13 0.28
ROCE 0.25 1.19
Cash Conversion Cycle -315922 23
Q.9 Debt to Equity ratio of Creative Merchants Ltd?
Creative Merchants Ltd Debt-to-Equity ratio is 0.01 , which is lower with the industry average of 0.29 , indicating lower debt levels in the industry.
Q.10 Debt to cash flow from operations of Creative Merchants Ltd?
Creative Merchants Ltd Debt to cash flow from operations is -0.25 , which is at a unhealthy level, indicating the business is not able to service its debt comfortably.

Ownership & governance

Q.1 Promoter shareholding and pledge status of Creative Merchants Ltd?
Promoters hold 6.67% of the Creative Merchants Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

Q.1 Revenue growth of Creative Merchants Ltd vs industry peers?
Creative Merchants Ltd revenue CAGR is 80.37% , compared to the industry median CAGR of 0.00% , indicating faster growth and gaining its market share.
Profit Metrics
Current Level Industry Median
Revenue 2.1 248.2
Gross Profit 0 5.5
Operating Profit -0.2 5.6
Net Profit 0 1.6
Operating Efficiency
Current Level Industry Median
Asset Turnover 0.28 1.12
ROE 0.13 4.14
ROCE 0.25 12.58
Cash Conversion Cycle -315921.84 39

Valuation & price assessment

Q.1 Stock return of Creative Merchants Ltd over the last decade?
Over the last 9 years, the stock has delivered a CAGR of 0% based on the current price.
Q.2 What return has the stock given over the last decade?
9Y 5Y 3Y 1Y
Share Price - - - -
Q.3 Valuation ratios of Creative Merchants Ltd vs historical?
The current P/E is similar that its historical median.
Q.4 How do the current valuation ratios measure up against the historic numbers and the current industry numbers?
Valuation Ratios Current Historic Median Industry Median
Price to Earnings 316.96 316.96 69.86
Price to Book 3.4 3.40 3.21
Price to Sales 8.51 8.51 1.29
EV to EBITDA 273.01 273.01 13.01

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