SUMEDHA FISCAL

SUMEDHA FISCAL 

PROS

1. Incoroporated in 1989, Sumedha Fiscal is a Kolkata based company dealing with Investment banking, wealth management, debt syndication, financial restructuring and broking services.

2. Sumedha is a debt free company with clean balance sheet

 3.Turnaround Results

Topline increased to 6.35 cr from 2.30 crore (qoq) and from 11cr to 16 cr (yoy).Net profit increased to 3cr from 1.19cr (yoy) resulting in rise of EPS to 3.76 from 1.50. Company has very small equity of 7.98cr and company has posted 3cr profit. A regular dividend paying company. This year company increased the dividend from 5% to 10% (Re 1).

Book value stands at Rs 44.11, so stock is trading below book value. Sector trading around 35 PE this company is trading around 9PE,is very attractive for investment at these levels. Promoter holding is  healthy at 49.57% in the company.

 Cons

1. Being a small company share prices can be manipulated easily.

N.B - Considering the bull market to reach new heights, companies like Sumedha are proxy play and are in good position to provide multibagger returns. The company has just posted turnaround results. Boarders can wait for another quarter to confirm the turnaround. But on the basis of present financials and valuations company is looking attractive for long term investment. Porinju also said there any many debt free brokerage and financial firms up for grab which can turn multibagger in next 3 years.

Discl – I have taken position at 30 levels and holding for long term. This is high risk high return investment, so judge your risk appetite and enter accordingly.