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Check Before You Invest : Decorous Investment & Trading Co Ltd

BSE: 539405 NSE: ISIN: INE183R01010
  |   Sector:  Construction & Infrastructure   |   Industry:  Construction - Real Estate

Snapshot

Q.1 Which industry/sub-sector does Decorous Investment & Trading Co Ltd belong to?
Decorous Investment & Trading Co Ltd belongs to the Construction & Infrastructure sector, operating specifically within the Construction - Real Estate segment.
Q.2 Is Decorous Investment & Trading Co Ltd a good quality company?
Decorous Investment & Trading Co 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 Decorous Investment & Trading Co Ltd undervalued or overvalued?
Decorous Investment & Trading Co Ltd appears Fair, as its key valuation ratios are in line with 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 34.65 43.46
Price to Book 1.23 1.37
Price to Sales 11.1 22.35
EV to EBITDA 30.13 30.80
Q.4 Is Decorous Investment & Trading Co Ltd a good buy now?
Decorous Investment & Trading Co 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 Decorous Investment & Trading Co Ltd?
Decorous Investment & Trading Co Ltd revenue growth is % for FY-, which is below its 5-year CAGR of 21.2%, indicating slower growth.

Q.2 Gross Profit margin of Decorous Investment & Trading Co Ltd?
Decorous Investment & Trading Co Ltd Gross profit margin which is the profit after deduction of direct costs, is 24% for FY-2025, which is below its 5-year median of 52.9%, indicating decreasing margins.

Q.3 Operating Profit Margin of Decorous Investment & Trading Co Ltd?
Decorous Investment & Trading Co Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is -40.24% for FY-2025, which is below its 5-year median of -31.13% indicating decreasing margins.

Q.4 Net Profit Margin of Decorous Investment & Trading Co Ltd?
Decorous Investment & Trading Co Ltd Net Profit Margin is 17.68% for FY-2025, is below its 5-year median of 38.93%, indicating decreasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 24 52.9
Operating Profit Margin (%) -40.24 -31.13
Net Profit Margin (%) 17.68 38.93

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Decorous Investment & Trading Co Ltd?
Decorous Investment & Trading Co Ltd Return on Asset is 1.57%, which is below its 5-year historical median of 2.06%, indicating deteriorated asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Decorous Investment & Trading Co Ltd?
Decorous Investment & Trading Co Ltd Return on capital employed is 2.21% for FY-2025, which is below its 5-year historical median of 2.81%. 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 Decorous Investment & Trading Co Ltd?
Decorous Investment & Trading Co Ltd Return on equity is 1.58% for FY-2025, which is below its 5-year historical median of 2.08%, indicating the business is making worse 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 Decorous Investment & Trading Co Ltd?
Decorous Investment & Trading Co Ltd Debt-to-Equity ratio is 0.00, which is lower the industry average of 0.23, indicating lower debt levels in the industry.

Q.9 Debt to cash flow from operations of Decorous Investment & Trading Co Ltd?
Decorous Investment & Trading Co Ltd Debt to cash flow from operations is 0, which is at a healthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Decorous Investment & Trading Co Ltd?

Q.1 Promoter shareholding and pledge status of Decorous Investment & Trading Co Ltd?
Promoters hold 1.27% of the Decorous Investment & Trading Co Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Decorous Investment & Trading Co Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Decorous Investment & Trading Co Ltd vs industry peers?
Decorous Investment & Trading Co Ltd revenue CAGR is 21.20%, 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 (%) - 0
Gross Profit Growth (%) -57.9 14.9
Operating Profit Growth (%) 0 10.4
Net Profit Growth (%) -57.1 17.2
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 0.09 0.1
ROE (%) 1.58 1.36
ROCE (%) 2.21 3.88
Cash Conversion Cycle (days) -0.79 439

Valuation & price assessment

Q.1 Stock return of Decorous Investment & Trading Co Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of -0.1% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
-0.1% -0.1% -4% 21.9%
Q.2 Valuation ratios of Decorous Investment & Trading Co Ltd vs historical?
The current P/E ratio of 34.65 is lower than its historical median of 43.46, indicating that the stock is trading below 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 34.65 43.46 33.43
Price to Book 1.23 1.37 1.53
Price to Sales 11.1 22.35 5.23
EV to EBITDA 30.13 30.80 14.43

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