Shankara Building Products Analysis

dividend

Pros

• Dividends paid are thoroughly covered by earnings (12.3x coverage).

Cons

• Shankara Building Products has only been paying a dividend for 3 years, and since then dividends per share have fallen.
• Shankara Building Products has been paying a dividend for less than 10 years and during this time payments have been volatile (annual drop of over 20%).
• Shankara Building Products's pays a lower dividend yield than the bottom 25% of dividend payers in India (0.76%).
• Shankara Building Products's dividend is below the markets top 25% of dividend payers in India (3.08%).

future

Pros

• Shankara Building Products is expected to become cash flow positive in 2 years.

Cons

• Shankara Building Products's earnings are expected to decrease over the next 1-3 years, this is not considered high growth.
• Shankara Building Products's earnings are expected to decrease over the next 1-3 years, this is below the India market average.
• Shankara Building Products's earnings are expected to decrease over the next 1-3 years, this is below the low risk savings rate of 7.2%.
• Shankara Building Products's earnings are expected to decrease over the next year.
• Shankara Building Products's net income is expected to decrease over the next 2 years.
• Shankara Building Products is not expected to efficiently use shareholders’ funds in the future (Return on Equity less than 20%).
• Performance (ROE) is not expected to exceed the current IN Specialty Retail industry average.
• A decline in Shankara Building Products's performance (ROE) is expected over the next 3 years.
• Shankara Building Products's revenue is expected to decrease over the next 2 years.
• Shankara Building Products's revenue is expected to decrease over the next 1-3 years, this is not considered high growth.
• Shankara Building Products's revenues are expected to decrease over the next 1-3 years, this is below the India market average.

health

Pros

• Shankara Building Products is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
• Shankara Building Products is profitable, therefore cash runway is not a concern.
• Shankara Building Products is profitable, therefore cash runway is not a concern.
• Debt is covered by short term assets, assets are 3.7x debt.
• Shankara Building Products's cash and other short term assets cover its long term commitments.
• The level of debt compared to net worth has been reduced over the past 5 years (112.9% vs 47.1% today).

Cons

• Operating cash flow is negative therefore debt is not well covered.
• Interest payments on debt are not well covered by earnings (EBIT is 2.1x annual interest expense, ideally 3x coverage).
• Shankara Building Products's level of debt (47.1%) compared to net worth is high (greater than 40%).
• High level of physical assets or inventory.

management

Pros

• The tenure for the Shankara Building Products board of directors is about average.
• Siddhartha's compensation has been consistent with company performance over the past year, both up more than 20%.
• The average tenure for the Shankara Building Products management team is over 5 years, this suggests they are a seasoned and experienced team.

Cons

• Siddhartha's remuneration is higher than average for companies of similar size in India.

misc

Pros

Cons

• Shankara Building Products is covered by less than 3 analysts.
• Shankara Building Products has significant price volatility in the past 3 months.

past

Pros

• Shankara Building Products's 1-year earnings growth exceeds its 5-year average (29.2% vs -3.4%)
• Shankara Building Products used its assets more efficiently than the IN Specialty Retail industry average last year based on Return on Assets.
• Shankara Building Products's earnings growth has exceeded the IN Specialty Retail industry average in the past year (29.2% vs 16.8%).

Cons

• Shankara Building Products's year on year earnings growth rate was negative over the past 5 years and the most recent earnings are below average.
• Shankara Building Products's use of capital deteriorated last year versus 3 years ago (Return on Capital Employed).
• Shankara Building Products has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).

value

Pros

• 540425 outperformed the Specialty Retail industry which returned -63.5% over the past year.
• BSE:540425 is up 23.1% outperforming the Specialty Retail industry which returned 12.6% over the past month.
• BSE:540425 is up 23.1% outperforming the market in India which returned 8% over the past month.

Cons

• Shankara Building Products's share price is above the future cash flow value, it's not available at a moderate discount (< 20%).
• Shankara Building Products's share price is above the future cash flow value, it's not available at a substantial discount (< 40%).
• Shankara Building Products is overvalued based on assets compared to the IN Specialty Retail industry average.
• Shankara Building Products earnings are not expected to grow next year, we can't assess if its growth is good value.
• Shankara Building Products is overvalued based on earnings compared to the IN Specialty Retail industry average.
• Shankara Building Products is overvalued based on earnings compared to the India market.
• 540425 underperformed the Market in India which returned -14.5% over the past year.