MoneyWorks4Me

Check Before You Invest : Solex Energy Ltd

BSE: 544862 NSE: SOLEX ISIN: INE880Y01017
  |   Sector:  Capital Goods & Industrial Consumables   |   Industry:  Electric Equipment

Snapshot

Q.1 Which industry/sub-sector does Solex Energy Ltd belong to?
Solex Energy Ltd belongs to the Capital Goods & Industrial Consumables sector, operating specifically within the Electric Equipment segment.
Q.2 Is Solex Energy Ltd a good quality company?
Solex Energy Ltd is a weak quality company, based on a inconsistent 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 Solex Energy Ltd undervalued or overvalued?
Solex Energy Ltd appears 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 0-year
Historic Median
Price to Earnings 9.42 28.77
Price to Book 2.88 5.47
Price to Sales 0.46 1.11
EV to EBITDA 5.05 16.82
Q.4 Is Solex Energy Ltd a good buy now?
Solex Energy 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.

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

Q.1 Debt to Equity ratio of Solex Energy Ltd?
Solex Energy Ltd Debt-to-Equity ratio is 0.92, which is above the industry average of , indicating higher debt levels in the industry.

Q.2 Debt to cash flow from operations of Solex Energy Ltd?
Solex Energy Ltd Debt to cash flow from operations is -3.11, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Solex Energy Ltd?

Q.1 Promoter shareholding and pledge status of Solex Energy Ltd?
Promoters hold 66.15% of the Solex Energy Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Solex Energy Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Solex Energy Ltd vs industry peers?
Solex Energy Ltd revenue CAGR is %, compared to the industry median CAGR of 0%, indicating stable growth and maintaining its market share.
Profit Metrics
Current Level 0-year
Industry Median
Revenue Growth (%) - -
Gross Profit Growth (%) 230 20.4
Operating Profit Growth (%) 160.7 17.1
Net Profit Growth (%) 377.8 18
Operating Efficiency
Current Level 0-year
Industry Median
Asset Turnover (x) 1.91 0.61
ROE (%) - 2.13
ROCE (%) - 3.74
Cash Conversion Cycle (days) 67.96 46

Valuation & price assessment

Q.1 Stock return of Solex Energy Ltd over the last decade?
Over the last 5 year(s), the stock has delivered a CAGR of 72.45% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
- 72.5% 5.4% -49.2%
Q.2 Valuation ratios of Solex Energy Ltd vs historical?
The current P/E ratio of 9.42 is lower than its historical median of 28.77, indicating that the stock is trading below its historical average valuation.
Q.3 How do the current valuation ratios compare with 0-year historical median and industry numbers?
Valuation Ratios Current 0-year
Historic Median
0-year
Industry Median
Price to Earnings 9.42 28.77 -
Price to Book 2.88 5.47 -
Price to Sales 0.46 1.11 -
EV to EBITDA 5.05 16.82 -

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