Data-Driven Decisions- Enhancing Investment Outcomes with Stock Analysis

Analysis of three Indian stocks representing large-cap, mid-cap, and small-cap segments, providing insights into their fundamental and technical aspects to aid investment decision-making.

Large Cap Company- Avenue Supermarket Ltd. (Dmart)

(Market Cap: ₹ 3,00,590 Cr.)

• Revenue and Growth: YoY growth at 19%, 2-year CAGR also 19%.
• Gross Margin: Recent reports show a slight increase to 15.0% YoY.
• EBITDA Margin: A steady or increasing EBITDA margin is preferable. DMart's recent EBITDA margin is 8.4%.
• Net Profit Margin: Recent reports show a 3% YoY growth in net profit, potentially due to lower income and higher depreciation.
• Inventory Turnover Ratio: A higher ratio suggests faster inventory turnover, which is generally positive. The ITR of this stock is 14.31.
• A high P/E ratio might indicate the stock is expensive relative to its earnings. DMart's current P/E ratio is around 115.88.
• The company is currently not paying any dividend. However it is re-employing the surplus back into investments.
• Strong brand reputation reflected in value pricing, quality products and customer satisfaction. The company has an efficient business model with a focus on private labels, strong financials and growth potential in tier 2 and tier 3 cities.
• Company is almost debt free. Company has delivered good profit growth of 24.5% CAGR over the last 5 years. Company's median sales growth is 33.1% over the last 10 years.

Mid Cap Company- Motilal Oswal Financial Services Ltd.

(Market Cap: ₹ 27,297 Cr.)

• Return on Equity (ROE): ROE= 15.6 %. A higher ROE indicates better profitability.
• Current Ratio: CR= 2.75. A current ratio above 1 is considered healthy.
• Debt-to-Equity Ratio: D/E ratio= 1.64. A lower ratio indicates a more financially stable company.
• Asset Turnover Ratio: ATR= 2.27. A higher ratio suggests better utilisation of assets.
• Price-to-Earnings Ratio (P/E Ratio): P/E= 14.5. A high P/E ratio might indicate the stock is expensive relative to its earnings.
• Diversified business model, strong brand reputation, technology adoption, growth potential in Tier 2 & Tier 3 Cities, and extensive distribution networks are some of the strengths of this company.
• Company's median sales growth is 18.5% over the last 10 years.
• Overall, this company has shown progress in both technical and financial aspects while maintaining a stable CAGR of around 16.5%. It will prove to be a good investment for investors in the current market scenario.

Small Cap Company- CEAT Ltd.

(Market Cap: ₹ 10,865 Cr.)

• Return on Equity (ROE): ROE= 6.14 %. A higher ROE indicates better profitability.
• Net Profit Margin (NPM): NPM= 6.12%. A rising NPM suggests improved profitability.
• Current Ratio: CR= 0.71. A current ratio above 1 is considered healthy.
• Quick Ratio (Acid Test Ratio): QR= 0.41. A quick ratio above 1 indicates strong short-term solvency.
• Debt-to-Equity Ratio: D/E Ratio= 0.66. A lower ratio indicates a more financially stable company.
• Asset Turnover Ratio: ATR= 1.17. A higher ratio suggests better utilisation of assets.
• P/E Ratio: P/E= 16.2. A high P/E ratio might indicate the stock is expensive relative to its earnings.
• The company has demonstrated many strengths in its financial setting like a diversified portfolio, export potential, manufacturing expansion capabilities among many others, which are all excellent factors contributing to the company’s image.
• Company has been maintaining a healthy dividend payout of 26%, and has shown immense growth potential in technical aspects. Overall, investors can surely think of buying into this stock given the current market scenario.