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Check Before You Invest : Poddar Housing and Development Ltd

BSE: 523628 NSE: PODDARHOUS ISIN: INE888B01018
  |   Sector:  Construction & Infrastructure   |   Industry:  Construction - Real Estate

Snapshot

Q.1 Which industry/sub-sector does Poddar Housing and Development Ltd belong to?
Poddar Housing and Development Ltd belongs to the Construction & Infrastructure sector, operating specifically within the Construction - Real Estate segment.
Q.2 Is Poddar Housing and Development Ltd a good quality company?
Poddar Housing and Development Ltd is a quality company, based on a multi-year financial track record.

This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q.3 Is Poddar Housing and Development Ltd undervalued or overvalued?
Poddar Housing and Development Ltd appears Somewhat Undervalued, as its key valuation ratios are lower than their past averages.

Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more.

Valuation Ratios Current 5-year
Historic Median
Price to Earnings - -
Price to Book 0.41 0.63
Price to Sales 0.62 2.09
EV to EBITDA 18.07 -40.28
Q.4 Is Poddar Housing and Development Ltd a good buy now?
Poddar Housing and Development 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

We have analysed the performance of the company on the following:

  • How has it performed on generating Profits?

    By checking its Revenue growth, Gross, Operating and Net Margins compared to its last 5-year median.

  • How efficiently has it utilized Capital?

    By checking its ROCE, ROA, ROE and its Cash Conversion Cycle.

  • How is it managing its Debt?

    By checking its Debt to Equity and Cash Flow from Operations.

A: What are the trends in revenue and profit margins?

Q.1 Revenue growth of Poddar Housing and Development Ltd?
Poddar Housing and Development Ltd revenue growth is 121% for FY-2024, which is above its 5-year CAGR of 4.56%, indicating faster growth.

Q.2 Gross Profit margin of Poddar Housing and Development Ltd?
Poddar Housing and Development Ltd Gross profit margin which is the profit after deduction of direct costs, is -97% for FY-2024, which is below its 5-year median of -37.3%, indicating decreasing margins.

Q.3 Operating Profit Margin of Poddar Housing and Development Ltd?
Poddar Housing and Development Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 32.24% for FY-2024, which is in line with its 5-year median of 32.24% indicating stable margins.

Q.4 Net Profit Margin of Poddar Housing and Development Ltd?
Poddar Housing and Development Ltd Net Profit Margin is -73.04% for FY-2024, is below its 5-year median of -28.94%, indicating decreasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) -97 -37.3
Operating Profit Margin (%) 32.24 32.24
Net Profit Margin (%) -73.04 -28.94

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Poddar Housing and Development Ltd?
Poddar Housing and Development Ltd Return on Asset is -6.18%, which is below its 5-year historical median of -2.85%, indicating deteriorated asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Poddar Housing and Development Ltd?
Poddar Housing and Development Ltd Return on capital employed is 4.39% for FY-2024, which is in line with its 5-year historical median of 4.39%. The current ROCE is below its estimated weighted average cost of capital (WACC) of 14%, indicating value preservation.

Q.7 Return on Equity (ROE) of Poddar Housing and Development Ltd?
Poddar Housing and Development Ltd Return on equity is -41.37% for FY-2024, which is below its 5-year historical median of -8.88%, indicating the business is making worse use of its shareholders capital.

Q.8 Cash conversion cycle of Poddar Housing and Development Ltd?
Poddar Housing and Development Ltd Cash conversion cycle is 2819 days, in line with its 5-year historical median of 2819 days, indicating stable working capital management. However, you need to compare this with its peers in the industry.
Current Level 5-year
Historic Median
Asset Turnover (x) 0.08 0.1
ROE (%) -41.37 -8.88
ROCE (%) 4.39 4.39
Cash Conversion Cycle 2819 days 2819 days

C: How much debt does the business have and is it at a sustainable level?

Q.9 Debt to Equity ratio of Poddar Housing and Development Ltd?
Poddar Housing and Development Ltd Debt-to-Equity ratio is 3.93, which is above the industry average of 0.23, indicating higher debt levels in the industry.

Q.10 Debt to cash flow from operations of Poddar Housing and Development Ltd?
Poddar Housing and Development Ltd Debt to cash flow from operations is 5, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Poddar Housing and Development Ltd?

Q.1 Promoter shareholding and pledge status of Poddar Housing and Development Ltd?
Promoters hold 53.03% of the Poddar Housing and Development Ltd, with 70.63% of their stake pledged, indicating high pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Poddar Housing and Development Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Poddar Housing and Development Ltd vs industry peers?
Poddar Housing and Development Ltd revenue CAGR is 4.56%, compared to the industry median CAGR of 0.00%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 121 0
Gross Profit Growth (%) 0 14.9
Operating Profit Growth (%) 181.5 10.4
Net Profit Growth (%) 0 17.2
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 0.08 0.1
ROE (%) -41.37 1.36
ROCE (%) 4.39 3.88
Cash Conversion Cycle (days) 2819.24 439

Valuation & price assessment

Q.1 Stock return of Poddar Housing and Development Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of -26% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
-26% -20.5% -21.8% 33.9%
Q.2 Valuation ratios of Poddar Housing and Development Ltd vs historical?
The current P/E ratio of 0 is in line with than its historical median of , indicating that the stock is trading near its historical average valuation.
Q.3 How do the current valuation ratios compare with 5-year historical median and industry numbers?
Valuation Ratios Current 5-year
Historic Median
5-year
Industry Median
Price to Earnings - - 33.43
Price to Book 0.41 0.63 1.53
Price to Sales 0.62 2.09 5.23
EV to EBITDA 18.07 -40.28 14.43

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