Recommendation - Buy
Hold for 1 years
Target: 70 Rs.
CMP: 43 Rs
BSE Code: 511589
Market Capital: 107.79 Cr.
Face Value: 10
52 Week Low / High: 9.69/51.10
Book Value: 66.38
Price/Book Value: 0.65
Promoter Share Pledge – Nil
TTM EPS – 2.66
P/E – 16.26
Dividend (%) – 0%
Part – 1 Company’s Information:
- The name of the Company has been changed from "Almondz Capital & Management Services Limited." to "AVONMORE CAPITAL & MANAGEMENT SERVICES LIMITED" in 2013.
- Avonmore Capital & Management Services Ltd., incorporated in the year 1991, is a Small Cap company (having a market cap of Rs 107.79 Crore) operating in Finance sector.
- The Company is a Category-I Merchant Banker registered with the Securities and Exchange Board of India (SEBI). The Company is also registered with the Reserve Bank of India (RBI) as a Non-Banking Financial Company
- Company is providing a range of financial services like Merchant Banking, Corporate Finance (comprising Leasing, Bill Discounting and Inter-Corporate Deposits), Money Market Operations, Equity Research, Consumer Finance, Project Advisory and Fixed Deposit.
- The Company was granted a rating of FA from CRISIL Ltd denoting adequate safety for its fixed deposit programme.
Part – 2 Avonmore Capital & Management Services Limited - Subsidiary
As on March 31, 2017, Company has the following entities as its subsidiaries and Associates:
Almondz Infosystem Private Limited.
Almondz Global Securities Limited.
Latitude 23 Communications Limited.
Red Solutions Private Limited.
Apricot Infosoft Pvt Limited
Avonmore Developers Pvt. Limited.
Anemone Holdings Pvt. Limited.
Glow Apparels Pvt. Limited.
Almondz Insurance Brokers Private Limited.*
Shivsathi Niketan Limited.
Yug Infrastructures Private Limited. (Associates)
Carya Chemicals & Fertilizers Private Limited. (Associates).
Part – 3 Avonmore Capital & Management Services Limited - Shareholding Pattern:
Part – 4 Financial Focus:
Focus on - Financial Results March 2017:
- Total stand lone revenues for the year ended March 31, 2017 amounted to Rs 692.96 Lakh as compared to Rs. 190.00 Lakh in the previous year.
- Net Profit for the financial year 2016-17 is amounted to Rs. 620.63 Lakh as against Rs. 142.34 Lakh in the last year.
Focus on - Financial Results September quarter 2017(Q2H18):
- For the quarter ended 30-09-2017, the company has reported a Standalone sales of Rs 22.65 Crore, up 320 % from last quarter Sales of Rs 5.37 Crore.
- For the quarter ended 30-09-2017, the company has reported a Standalone Net profit of Rs 17.77 Crore, up 243 % from last quarter Net profit of Rs 5.18 Crore.
Part – 5 Peer Comparison:
Part – 6 Opportunities & Threats:
- Being part of the India’s growth story.
- Digitalization in the economy.
- Financial inclusion.
- Volatile external and global environment.
- Competition from the newer models of NBFCs.
- Handling post integration challenges.
- Attracting and retaining talent and training them for the right culture.
- risk of heavy ups and downs in stock market
- unstable political environment and changes in Government policy / regulatory framework could impact the Company’s operations
- Available at less P/E 16.26 compare to Industrial P/E 47.24
- Continuous reduction in Debt
- Promoter’s stack has increased
- Compounded Profit Growth (3 Years) is > 20%
- Compounded Profit Growth (3 Years) is > 300%
- India is expected to be the third largest consumer economy as its consumption may triple to US$ 4 trillion by 2025, owing to shift in consumer behavior and expenditure pattern, according to a Boston Consulting Group (BCG) report; and is estimated to surpass USA to become the second largest economy in terms of purchasing power parity (PPP) by the year 2040, according to a report by PricewaterhouseCoopers
- The business of the Company is that of a Non-banking Finance Company (NBFCs). The NBFC sector in India has witnessed significant vicissitude over the past few years and has come to be recognized as a systematically key element of the financial system
- Indeed it is evident in India that with the development of NBFCs segment within the overall financial system, it challenged the other segments,i.e. banks to innovate, to improve quality and competence, and deliver at flexible timings and at competitive prices
- The government in the Union Budget has allowed NBFCs with asset size of above Rs 500 Crore would be permitted to access the provisions of SARFAESI Act. This would further improve NBFCs’ ability to make recoveries.
- Stock CMP is 43 Rs. and stock is trading at P/E 16.26 & EPS TTM 2.66 but due to above all factors plus reduction in debt may improve profit margin in future. Hence stock may touch 70 Rs. Within 1 years’ time horizon.
- Note: The articles are not research reports but assimilation of information available on public domain and it should not be treated as a research report. Registration status with SEBI: I am not registered with SEBI under the (Research Analyst) regulations 2014 and as per clarifications provided by SEBI: “Any person who makes recommendation or offers an opinion concerning securities or public offers only through public media is not required to obtain registration as research analyst under RA Regulations” Disclosure: It is safe to assume that I might have the discussed companies in my portfolio and hence my point of view can be biased. Readers should consult registered consultants before making any investments.