Likhitha Infrastructure Ltd - Fundamental and Technical AnalysisLikhitha Infrastructure Ltd is engaged in the business of Pipeline Laying providing comprehensive erection, testing and commissioning of Oil & Gas Pipelines, City Gas Distribution Projects and Operation and Maintenance (O & M) Services. Company’s operations include three principal business lines: (i) Cross Country Pipelines and associated facilities; (ii) City Gas Distribution including CNG Stations; and (iii) Operation & Maintenance of PNG/PNG services.
FUNDAMENTALS:
> It is a Small Cap company with a market cap of just Rs.868 Cr, very small company.
> The ROCE and ROE is at 35% and 26% respectively which is very impressive. Positive.
> Stock P/E is at 30 which makes the valuation still attractive as compared to the sector P/E at 59. Positive.
> Higher than Industry Revenue Growth: Over the last 5 years, revenue has grown at a yearly rate of 28.6%, vs industry avg of 4.97%. Positive.
> Increasing Market Share: Over the last 5 years, market share increased from 0.02% to 0.07%. Positive.
> Higher than Industry Net Income: Over the last 5 years, net income has grown at a yearly rate of 62.72%, vs industry avg of 26.93%. Positive.
> Very robust Topline and Bottomline, continuously increasing on YoY basis. Company has delivered good profit growth of 62.74% CAGR over last 5 years.
> Debts: The company have Debts of Rs. 0 Cr as per Mar 21 Balance Sheet. This is called completely DEBT Free Company.
> Reserves: The company is increasing its cash reserves on YoY basis too, Rs. 134 Cr as per Mar 21 Balance Sheet.
> OPM is rapidly growing, which is wonderful, it is at 23% as per Mar 21 Balance Sheet, and if we look at last 5 year average it is at 17.6% that’s wonderful.
> Promoters holding is intact at whopping 74.11% that is a good sign, like they trust their own business and staying invested.
TECHNICALS:
> On the chart stock is continuously in UPTREND since it’s listing in Oct 20.
> Long Volume towers as indicated by blue arrows at the bottom indicates that lot of accumulation is going on in the stock at almost regular intervals.
CLIENTS: ONGC, GAIL, Indian Oil, IGL, HPCL, Torrent Gas, Adani Gas. All big brands in the Gas distribution sector is getting their work done through LIKHITHA.
GAS Distribution is the sector of future.
Fresh Buy - AT CMP i.e. Rs. 439
Old Buy – Hold
Target – Hold for at least 2-3X return.
Risk Management Tip: Never invest more than 5% of your capital in any single stock.
Happy Investing!
ShareMktSchool
