(Disclaimer: This analysis is for educational purposes only, not buy sell recommendation, through infamous analysis we only provide some significant data on the basis of which you can take your decision)
In Nepse Full of hydro and Financial Institutions, only 6 companies are from the manufacturing & processing sector, whereas BNL,BNT, NLO, and UNL are part of a multinational Conglomerate only HDL and SHIVAM are grown in Nepal.
Shivam who issued its IPO at Rs.200 premium now it has become fire for investor, no-one is willing to touch it. The share which had All time high of Rs.1800 and was trading at Rs 507.50 on 20-Feb-2022, The shares of shivam cement has fallen by 64 % from 54 week high of Rs-1405 to 507.50 but if you had got allotment of Shivam you still be sitting at 19%
compounded return over period of 3.5 years.
(The below data are taken from Shivam annual report and quarterly report- Amounts are in lakhs)
Sales Analysis: The sales figures show a fluctuating trend over the 5 years. Sales in 2074-75 were at 102651, and then increased to 113451 which is increase in 10.5% in the following year. However, in 2076-77, the sales figures fell to 90091 a decrease in 20.60%, before rising again in 2077-78 by 6.73% and again falling by 3.9% in 2078-79. While comparing Q-2 of 79-80 to Q-2 of 78-79 the sales has been decreased by 27%. Overall, the sales trend is somewhat mixed, with periods of growth and decline. In percentage terms, the fluctuations in sales appear more significant than when looking at the absolute values. Overall, the sales trend over time is somewhat mixed. There are periods of growth and decline, with no clear upward or downward trend. The up and down in sales figures seem to be could have been influenced by a variety of factors, such as changes in the market, consumer demand, and company performance, lockdown, liquidity crisis and other factors too.
Other Income : While analysing other income segment of shivam out of 2163.03 other income 1700.72 was fromgain on sales of PPE ( fixed assets ). The other income has been growing other the year. The other income appears to have increased significantly over the years, from 71 in 2074-75 to 2163 in 2078-79. In 2075-76 a rise in 102.73 % in comparison to 2074-75 the raised by 38.30 % , 126.80 %, 378.18% over next 3 years and the surprising factor is that if we remove *Other Income* from profit after tax (PAT) of Q-1 and Q-2 we will get
surprising result. If we remove other Income form PAT of Q-1 the company could have posted loss If it hasn’t earned any other income and would have posted only a minimal profit in Q-2 of 2078-79.
Below we can see Shivam other income has been increasing earlier it was 0.07% of total revenue, previous year it was 2.28% of Total revenue, and this year up to 2nd quarter it has become nearly 9%. whereas Sales up to Q-2 has decreased by 27% comparing to PY.
Cost of goods Sold (COGS): In 2074-75 COGS was 62% of sales and within next 3 year the COGS has become 80 % of Sales an increase of nearly 18% in 3 years so obviously Gross profit margin has taken significant hit. The reason could be inflation, high input cost, high interest rate etc.
Loans, borrowing & other Financial Liability and Finance Cost (FC): In this part of we have seen good or okayish result, loan has been decreasing so does financial cost and interest coverage ratio is also good. Financial
cost to sales ratio is also good.
Advertisement & Sales promotion: Adv & Sales promotion has been increased significantly in comparison to PY whereas Sales growth is negative/flat. This may bring future sales in good numbers but till Q-2 report we haven’t seen anything positive.
Did you know shivam has invested into Prabhu bank…? Shivam Cement has invested in Promoter share of prabhu bank. It holds 11,20,000 kitta as per #shivam balance sheet for the FY 2078-79.
The share is valued at 189.79 per share on 16-07-22 but as per Nepse data the price on same date was Rs 145.so I don’t know how the accounting is done, as per my knowledge the valuation of listed shares are done on closing value of share on that date on Stock exchange.a
A snapshot details of EPS and ROE
Conclusion: Almost some the big fundamental indicators are not with Shivam. This could be because of competition,
Lockdown, high interest rate and many other systematic and unsystematic risk.
