Today, we are bringing you insights into a stock that holds significant potential in the investment and finance sector and could deliver impressive returns in the coming years. Shardul Securities Ltd, established in 1985, is a company under the Shreyam Group.
Shardul Securities Ltd Company Overview
Given the company’s business model and future growth opportunities, Shardul Securities Ltd appears to be a promising stock that could yield substantial returns in the long term. Let’s dive into its fundamentals and analyze why this stock is worth considering.
Shardul Securities Ltd Fundamentals
Market Cap: ₹688 Crores
Face Value: ₹10 per share
Over the past year, Shardul Securities Ltd has delivered an impressive return of 251%, while in the last three years, it has soared by 519%. As of August 24, 2024, the stock is trading at ₹381.60.
Now, let’s break down its key financial ratios and performance indicators.
Return on Capital Employed (ROCE)
ROCE measures how efficiently a company generates profits from its capital. With a ROCE of 23.83%, Shardul Securities Ltd is performing exceptionally well, considering that any ROCE above 10% is generally considered strong for Indian companies.
Return on Assets (ROA)
ROA indicates the company’s ability to generate profits from its assets. Shardul Securities Ltd boasts a ROA of 14.03%, which is notably higher than the industry standard of 5%, showcasing its strong asset management.
Debt-to-Equity Ratio
This ratio reveals the company’s financial leverage. A Debt-to-Equity ratio below 1 is considered favorable, and Shardul Securities Ltd has a minuscule ratio of 0.01%, indicating that it can easily manage its debt obligations.
Interest Coverage Ratio
This ratio measures the company’s ability to pay interest on its debt. An interest coverage ratio above 2 is healthy, and Shardul Securities Ltd has an astounding ratio of 434. This indicates strong financial stability and the ability to cover interest payments comfortably.
Compound Annual Growth Rate (CAGR)
CAGR reflects a company’s growth rate over time. Shardul Securities Ltd has demonstrated a sales CAGR of 170.34% and a profit CAGR of 150.80% over the past three years, reflecting outstanding growth.
Earnings Per Share (EPS)
EPS represents the profit earned per share. Shardul Securities Ltd has an EPS of ₹65, which indicates robust profitability when compared to its current stock price.
Promoters’ Holding
A higher promoter holding indicates confidence in the business. Promoters of Shardul Securities Ltd hold 74.84% of the shares, showing a strong commitment to the company’s growth and stability.
Debtor Days
This ratio shows the number of days it takes for the company to collect payment after a sale. Shardul Securities Ltd has a debtor days figure of 0, which is exceptional, indicating smooth cash flow and efficient receivables management.
Operating Profit Margin (OPM)
OPM indicates the profitability of a company from its operations. With an OPM of 96%, It is highly profitable, reflecting its ability to manage costs and maximize revenue.
Profit Growth
The company has significantly increased its profit from ₹2 Crores last year to ₹97 Crores this year a remarkable achievement for a company of this size.
EV to EBITDA Ratio
This ratio is used to determine a company’s valuation. Generally, a lower EV to EBITDA ratio is preferred. It has a ratio of 1.72, indicating it is currently undervalued.
Price-to-Earnings (P/E) Ratio
A P/E ratio between 12 and 20 is considered good in the Indian market. Shardul Securities Ltd has a P/E ratio of 3.37, suggesting that the stock is trading at a low valuation with room for growth.
Price-to-Earnings Growth (PEG) Ratio
A PEG ratio below 1 indicates potential for growth. It has a PEG ratio of 0, further supporting the view that it’s undervalued and has significant growth potential.
Price-to-Book (PB) Value
A PB value below 1 indicates that the stock is undervalued. It’s PB value stands at 0.44, making it an attractive investment opportunity.
Shareholding Pattern (as of March 2024)
Promoters: 74.84%
Public: 25.16%
Future Price Target
Currently trading at ₹381.60 (as of August 24, 2024), Shardul Securities Ltd could potentially reach ₹1,000 within the next two years, given its strong fundamentals and business expansion plans.
Conclusion
In my opinion, This is a fundamentally strong company with solid growth prospects, making it a compelling choice for long-term investors.
However, it’s crucial to conduct your own research or consult a financial advisor before making any investment decisions.
Disclaimer: The suggestions provided here are based on thorough analysis, but there is always a possibility of errors. Please consult your financial advisor before making any investment.
Most of the figures mentioned are as of March 2024. Stock market investments are subject to risks, and expert advice is essential before making any financial decisions.
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