HPL Electric & Power Breakout

akashbothra Updated   
1. Buy or Sell at your own risk
2. Don't risk more than 1%-2% of your capital as stop loss
3. Position Size formula:- Stop Loss Amount/(Buy Price-Initial Stop Loss Price)
4. Sell on RSI close below 30 (or use any other method of your liking)
5. Some other ways to sell stocks can be
a. 25% or 50% up in three weeks or less
b. Weekly tailing tops with high volume
c. Exhaustion gaps
d. Heavy daily volume without further upside
e. Largest one day price drop

After a consolidation since January 2022, HPL has given a breakout today. Buy with a stop just below ₹72. (One can use the low of the previous bar/supertrend indicator/previous support point/fixed percentage from the buy price as stop loss also)
Strengths: -
1. TTM Sales growth is at 30%, TTM Profit growth is at 256%, quarterly sales growth is at 129% and quarterly profit growth is at 131%

2. Debt to equity at 0.74(less than 1 is good)

3. Stock is trading at 0.64 times its book value

4. Debtor days have decreased from 214 to 182

5. on September 21, 2022 credit rating agency CRISIL said in its credit rating report, "CRISIL Ratings has reaffirmed its ‘CRISIL BBB+/Positive/CRISIL A2’ ratings on the bank facilities of HPL Electric and Power Limited (HPL, part of the HPL group). The reaffirmation factors in HPL group’s performance during fiscal 2022 despite the anticipated impact on the performance amid the Covid-19 pandemic". (Please go through the credit rating report for a better understanding)

Weaknesses: -
1. The company has low return on equity of 1.74% over the last 3 years.

2. The company has delivered a poor sales growth of 0.55% over the past five years

3. Company has a low interest coverage ratio

4. Dividend payout has been low at 8.84% of profits over the last 3 years

5. Company has high debtors days of 182 days

Disclaimer: I am not SEBI Registered. Do trade or invest at your own risk, I am not responsible for any losses and won't claim anything from your profits either. Take financial advice from your advisors before jumping in.


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