Dalal Street Investment Journal - - QUERYBOARD -

I bought 20,000 shares of Mangal Credit and Fincorp Lim­ited for ₹32. Please tell me if I should hold or sell? - Nitesh Ku­mar

Mangal Credit and Fincorp Lim­ited is a non-bank­ing fi­nance com­pany (NBFC) and is a hold­ing com­pany of many other com­pa­nies. The com­pany pro­vides credit fa­cil­i­ties, pri­vate ed­u­ca­tional fund­ing, trad­ing in mar­kets and loans ser­vices. The com­pany op­er­ates in var­i­ous seg­ments in­clud­ing fi­nance, jew­ellery, en­ter­tain­ment, rent­ing of mov­able as­sets and broking, among oth­ers. The com­pany’s sub­sidiary units in­clude Chak­shu Re­al­tors, Ind­trans Con­tainer Lines,

Mangal Build­home, Ind­trans Con­tainer Lines (Singapore)

Pte and Mangal Bul­lion Pri­vate Lim­ited, among sev­eral oth­ers.

On the fi­nan­cial front, Mangal Credit and Fincorp Lim­ited (MCFL) posted a 0.86 per cent de­crease in its rev­enue to

₹1.86 crore in Q4FY17 on a yearly ba­sis. The com­pany posted an op­er­at­ing loss of ₹0.40 crore in Q4FY17, down by 128.85 per cent on a year-on-year ba­sis, against an op­er­at­ing profit of ₹1.40 crore in Q4FY16. The com­pany fur­ther posted a net loss of ₹0.60 crore in the fourth quar­ter of FY17, as against a net profit of ₹0.13 crore in Q4FY16.

On an an­nual ba­sis, the com­pany’s rev­enue in­creased 24.51 per cent to ₹8.28 crore in FY17 from ₹6.65 crore in the pre­vi­ous fis­cal. How­ever, the com­pany’s PBIDT stood at ₹5.32 crore in FY17, up by 46.56 per cent from ₹3.36 crore in the pre­vi­ous fis­cal. The com­pany’s profit after tax in­creased by 145.45 per cent to ₹2.70 in FY17 from ₹1.10 crore in FY16.

On the val­u­a­tion front, the share price of MCFL is trad­ing at a PE mul­ti­ple of 16.42x, as against its peers such as DRA Con­sul­tants (18.39x), Tran­swind In­fra­struc­ture (74.48x), while the in­dus­try PE stood at 22.52x. MCFL has re­ported a mas­sive de­cline in its fi­nan­cial per­for­mance with an equally dis­mal stock per­for­mance.

We would rec­om­mend our reader-in­vestors to EXIT.

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