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Check Before You Invest : SKIL Infrastructure Ltd

BSE: 539861 NSE: SKIL ISIN: INE429F01012
  |   Sector:  Capital Goods & Industrial Consumables   |   Industry:  Engineering

Snapshot

Q.1 Which industry/sub-sector does SKIL Infrastructure Ltd belong to?
SKIL Infrastructure Ltd belongs to the Capital Goods & Industrial Consumables sector, operating specifically within the Engineering segment.
Q.2 Is SKIL Infrastructure Ltd a good quality company?
SKIL Infrastructure 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 SKIL Infrastructure Ltd undervalued or overvalued?
SKIL Infrastructure Ltd appears Overvalued, as its key valuation ratios are higher 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 1.7 0.12
Price to Book - 0.14
Price to Sales - -
EV to EBITDA 82.11 82.18
Q.4 Is SKIL Infrastructure Ltd a good buy now?
SKIL Infrastructure 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 SKIL Infrastructure Ltd?
SKIL Infrastructure Ltd revenue growth is 0% for FY-2023, which is above its 5-year CAGR of -100%, indicating faster growth.

Q.2 Gross Profit margin of SKIL Infrastructure Ltd?
SKIL Infrastructure Ltd Gross profit margin which is the profit after deduction of direct costs, is -1835.8% for FY-2023, which is below its 5-year median of -1566.9%, indicating decreasing margins.

Q.3 Operating Profit Margin of SKIL Infrastructure Ltd?
SKIL Infrastructure Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 0% for FY-2023, which is below its 5-year median of 18.07% indicating decreasing margins.

Q.4 Net Profit Margin of SKIL Infrastructure Ltd?
SKIL Infrastructure Ltd Net Profit Margin is -% for FY-2023, is above its 5-year median of -1696.24%, indicating increasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) -1835.8 -1566.9
Operating Profit Margin (%) - 18.07
Net Profit Margin (%) - -1696.24

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of SKIL Infrastructure Ltd?
SKIL Infrastructure Ltd Return on Asset is 34.13%, which is above its 5-year historical median of -4.77%, indicating improved asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of SKIL Infrastructure Ltd?
SKIL Infrastructure Ltd Return on capital employed is 56.09% for FY-2023, which is above its 5-year historical median of 1.83%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 14%, indicating value creation.

Q.7 Return on Equity (ROE) of SKIL Infrastructure Ltd?
SKIL Infrastructure Ltd Return on equity is 0% for FY-2023, which is above its 5-year historical median of -16.73%, indicating the business is making better use of its shareholders capital.

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

Q.8 Debt to Equity ratio of SKIL Infrastructure Ltd?
SKIL Infrastructure Ltd Debt-to-Equity ratio is 10.98, which is above the industry average of 0.27, indicating higher debt levels in the industry.

Q.9 Debt to cash flow from operations of SKIL Infrastructure Ltd?
SKIL Infrastructure Ltd Debt to cash flow from operations is -10.53, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of SKIL Infrastructure Ltd?

Q.1 Promoter shareholding and pledge status of SKIL Infrastructure Ltd?
Promoters hold 52.80% of the SKIL Infrastructure Ltd, with 69.82% of their stake pledged, indicating high pledge risk.

Peer comparison (industry-wise, mcap)

E: How does SKIL Infrastructure Ltd performance compare with that of its Peers?

Q.1 Revenue growth of SKIL Infrastructure Ltd vs industry peers?
SKIL Infrastructure Ltd revenue CAGR is -100.00%, compared to the industry median CAGR of 0%, indicating slower growth and losing its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) - -
Gross Profit Growth (%) 0 16.7
Operating Profit Growth (%) 0 16.1
Net Profit Growth (%) 0 26.8
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) - 0.6
ROE (%) - 6.11
ROCE (%) 56.09 10.15
Cash Conversion Cycle (days) - 79

Valuation & price assessment

Q.1 Stock return of SKIL Infrastructure Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of -27.4% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
-27.4% -18.3% -31.1% -67.1%
Q.2 Valuation ratios of SKIL Infrastructure Ltd vs historical?
The current P/E ratio of 1.7 is higher than its historical median of 0.12, indicating that the stock is trading above 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 1.7 0.12 29.42
Price to Book - 0.14 2.38
Price to Sales - - 2.22
EV to EBITDA 82.11 82.18 15.76

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