As an Indian stock market newcomer, you might be wondering which companies are worth investing in. Shankara Building Products is a well-known name in the building materials industry, and it might be worth considering for your investment portfolio. In this comprehensive analysis, we’ll take a closer look at the company, its history, promoters, and financial and technical data, to help you make an informed decision.
Overview of Shankara Building Products
Shankara Building Products is a leading retail distributor of building materials, offering a wide range of products, including cement, steel, roofing solutions, tiles, and sanitary ware, among others. Founded in 1995, the company has expanded rapidly over the years, with a presence in 10 states across India and more than 125 showrooms. The company’s shares went public in 2017, and its shares are traded on the National Stock Exchange (NSE) under the ticker symbol “SHANKARA.”
History and Promoters
Shankara Building Products was founded by Sukumar Srinivas and Ravi Kumar, who currently serves as the Managing Director and Non-Executive Director of the company, respectively. The company started as a small retail outlet in Bangalore and has since grown into a nationwide chain of showrooms.
Financial Analysis of Shankara Building Products
- Market Cap: With a market capitalization of ₹ 1,473 Cr, it is a mid-sized company in the building materials industry.
- Price History: Shankara Building Products’ share price has fluctuated between ₹ 830 and ₹ 574 in the past year, and currently trades at ₹ 638.60.
- Stock P/E: The stock’s P/E ratio is 24.8, indicating that investors are willing to pay ₹ 24.8 for every ₹ 1 of earnings.
- Book Value: The share’s book value is ₹ 266 per share.
- Dividend Yield: The company has a modest dividend yield of 0.16%.
- ROCE: SHANKARA has a Return on Capital Employed (ROCE) of 10.1%, indicating that it generates a decent return on the capital invested in the business.
- ROE: The company has a Return on Equity (ROE) of 6.30%, which is lower than the industry average.
- Debt to Equity: Shankara Building Products has a Debt-to-Equity ratio of 0.16, which indicates that the company has a low level of debt.
- Graham Number: The Graham Number for the stock is ₹ 395, which is lower than its current market price.
Technical Analysis of Shankara Building Products
- RSI(14): The Relative Strength Index (RSI) for Shankara Building Products is currently at 47.6, which is close to the neutral zone.
- Stochastic Oscillator: The Stochastic Oscillator for the stock is at 62.4, indicating that the stock is in a bullish trend.
- CCI 20: The Commodity Channel Index (CCI) for SHANKARA is at 2.9, indicating a neutral trend.
- Awesome Oscillator: The Awesome Oscillator for the stock is at -24.5, indicating a weak bearish trend.
- Momentum Oscillator: The Momentum Oscillator for the stock is at 0.3, indicating a neutral trend.
- MACD(12, 26, 9): The Moving Average Convergence Divergence (MACD) for the share is at -8.5, indicating a bearish trend.
- Stochastic RSI: The Stochastic RSI for SHANKARA is at 93.0, indicating a bullish trend.
- William % R: The William % R for Shankara Building Products is at -38.
- Ultimate Oscillator: The Ultimate Oscillator for the company’s share is at 42.7.
Strengths and Weaknesses
Based on the financial and technical analysis, Shankara Building Products has its strengths and weaknesses. One of the company’s strengths is its low debt-to-equity ratio, which suggests that it has a solid financial position. The company’s ROCE is also reasonable, indicating that it generates a decent return on its capital investments. However, the company’s ROE is below the industry average, indicating that it might not be utilizing its shareholder equity effectively.
The technical analysis of the stock shows mixed signals. The Stochastic Oscillator suggests that the stock is in a bullish trend, while the MACD indicates a bearish trend. We have also checked a few other indicators like the Aroon Oscillator, Center of Gravity, Coppock Curve, etc. The other indicators suggest a neutral trend, which means that the stock might be experiencing a period of consolidation.
Investment Recommendation
Based on the analysis, Shankara Building Products appears to be a mid-sized company with a decent financial position. However, the stock’s price is currently trading above its Graham Number, suggesting that it might be overvalued. Investors looking for a long-term investment might consider checking this coming earning season. They also need to wait for a price correction before investing in the stock.
FAQ:
Shankara Engineering’s share is traded on the National Stock Exchange (NSE) under the ticker symbol “SHANKARA.” The company has a market capitalization of ₹ 1,473 Cr, and its share price has fluctuated between ₹ 830 and ₹ 574 in the past year, currently trading at ₹ 645.
Shankara Building Products was founded by Sukumar Srinivas and Ravi Kumar, who currently serves as the Managing Director and Non-Executive Director of the company, respectively.
Shankara Buildcon is not a company; there is no information on any IPO issued by this name. However, Shankara Building Products went public in 2017 at an issue price of Rs 440 – Rs 460 per share. The shares are now traded on the National Stock Exchange (NSE) under the ticker symbol “SHANKARA.”
Conclusion
In conclusion, Shankara Building Products is a leading retail distributor of building materials in India, with a presence in ten states and over 125 showrooms. The company has a solid financial position, with a low debt-to-equity ratio and a reasonable ROCE. However, its ROE is below the industry average, and its current market price is trading above its Graham Number. Therefore, investors should carefully consider these factors before investing in the stock.