INVESTMENT INSIGHTS
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.
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 | 30.78 | 44.68 |
| Price to Book | 10.9 | 15.14 |
| Price to Sales | 5.97 | 11.59 |
| EV to EBITDA | 20.65 | 36.65 |
We have analysed the performance of the company on the following:
By checking its Revenue growth, Gross, Operating and Net Margins compared to its last 5-year median.
By checking its ROCE, ROA, ROE and its Cash Conversion Cycle.
By checking its Debt to Equity and Cash Flow from Operations.
A: What are the trends in revenue and profit margins?
| Current Level | 5-year Historic Median |
|
|---|---|---|
| Gross Profit Margin (%) | 30.3 | 30.7 |
| Operating Profit Margin (%) | 13.18 | 13.18 |
| Net Profit Margin (%) | 20.39 | 23.93 |
B: Does the business utilize capital efficiently?
| Current Level | 5-year Historic Median |
|
|---|---|---|
| Asset Turnover (x) | 1.06 | 0.96 |
| ROE (%) | 35.17 | 39.59 |
| ROCE (%) | 43.42 | 48.16 |
| Cash Conversion Cycle | 169 days | 116 days |
C: How much debt does the business have and is it at a sustainable level?
D: Promoter shareholding and pledge status of Sonata Software Ltd?
E: How does Sonata Software Ltd performance compare with that of its Peers?
| Current Level | 5-year Industry Median |
|
|---|---|---|
| Revenue Growth (%) | 37.9 | 3.1 |
| Gross Profit Growth (%) | 61.7 | 14.9 |
| Operating Profit Growth (%) | 112.3 | 15.3 |
| Net Profit Growth (%) | 30.4 | 15.8 |
| Current Level | 5-year Industry Median |
|
|---|---|---|
| Asset Turnover (x) | 1.06 | 0.46 |
| ROE (%) | 35.17 | 4.57 |
| ROCE (%) | 43.42 | 6.6 |
| Cash Conversion Cycle (days) | 169.44 | 36 |
| 9Y | 5Y | 3Y | 1Y | |
|---|---|---|---|---|
| Share Price CAGR |
19% | 0.3% | -14.6% | -10.9% |
| Valuation Ratios | Current | 5-year Historic Median |
5-year Industry Median |
|---|---|---|---|
| Price to Earnings | 30.78 | 44.68 | 47.38 |
| Price to Book | 10.9 | 15.14 | 2.64 |
| Price to Sales | 5.97 | 11.59 | 4.79 |
| EV to EBITDA | 20.65 | 36.65 | 16.75 |
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Funds ranking in screeners: Performance Consistency and Quality are two parameters used for ranking funds for SIP. The ranking as follows GG, GO, GR, OG, OO, OR, RG, RO and RR.
With the same color-coded funds, the one with the higher Average 3-year rolling returns (over 5 to 10 years), the number that appears in the Performance tag, ranks higher.
Here is the summary:
The third tag Upside Potential is not relevant for SIP. It is relevant for lumpsum investments in Mutual Funds.
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The Alchemists Ark Pvt. Ltd. |
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Trade/Brand
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SEBI Registration Number:
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INA000013323 Validity – May 16, 2019 – Perpetual |
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Non-Individual |
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BSE Enlistment No:
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1187 |
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Registration granted by SEBI, enlistment with exchange and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors. |
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