max profit minimum time opportunity (value investing)Entry Price: The entry price should be between ₹3700 and ₹3900.
Target Price: ₹5910 (35% upside potential)
Sell Signal
between -10 and -15
Hold Signa
ranges between -10 and 10
Strong Buy Signal
exceeds 10
sector - gold and jewelry
NSE:SKYGOLD
:Sky Gold Limited is engaged in the business of designing, manufacturing, and marketing gold jewellery
:The company has reputed clients like Malabar Gold, Joyalukkas, Senco , Khazana Jewellers, Khimji, Kalyan Jewellers, GRT, Istaara etc.
The company's previous financial reports indicate continuous and strong sales growth
The quarter-on-quarter (QoQ) average sales growth in the last four quarter is 30%, while the year-on-year (YoY) average sales growth over the past two years stands at 46%. Additionally, the company has consistently improved its profit margins on a YoY basis.
The company's EPS has also shown remarkable growth alongside its profit and sales. In the financial year 2022-23E PS grew by 9%, followed by an impressive 76% growth in 2023-24. In the current financial year, EPS growth has reached 96%
peer base valuation
The company's P/B ratio appears undervalued compared to top peers. However, many of its peers are outperforming it in terms of P/B ratio performance.
The company's P/E ratio is significantly higher than the industry average but considerably lower compared to the major players in the industry.
Its EPS growth in the previous quarter has been the highest among its peers.
The company's sales growth is also the highest in the industry,
its EV/EBITDA is much lower than that of market leaders.
Additionally, the company's ROE is better than many peers in the industry, although it still lags behind the industry leader's ROE.
:share holding changes
The company's promoters have been continuously reducing their stake since the September quarter of the previous year. Their holding, which was 73.55% in September 2023, has dropped significantly to 58.24% by October 2024, which is a concerning trend.
On the other hand, FIIs, which held 0% in September 2023, have steadily increased their stake over the last four quarters to 1.38%. Additionally, DIIs have acquired a 6.31% stake in the recent period, indicating strong trust from major investors, which is a positive sign for the company.
estimate for q3
Recently, several news portals have reported that 46 lakh weddings are expected to take place in India during November and December. Given that gold accessories are heavily purchased during Indian weddings, the upcoming quarter could be highly favorable for the gold sector.
This presents a significant opportunity for the company to expand its market. However, it is important to note that the company primarily focuses on lightweight jewelry, while heavier jewelry is typically preferred for weddings.
That said, the company's B2B business model, which involves selling jewelry to stores and online platforms that further sell to end consumers, provides growth in this high-demand period.
