Amit International: From Undervalued To Neutral

It has a Fundamental Score of 14 and a CapitalCube Implied Price of INR 4.41

Relative Valuation

Amit International Limited is currently neutrally valued, as its previous close of INR 3.79 lies within the CapitalCube estimate range of INR 3.53 to INR 5.34. Over the last 52 week period, Amit International Limited has fluctuated between INR 2.71 and INR 7.70.

Company Overview

• Relative underperformance over the last year is in contrast with the more recent outperformance.

• Amit International Limited trades at a lower Price/Book multiple (0.37) than its peer median (0.64).

• 531300-IN‘s earnings and EBITDA are both negative which suggest that P/E or Price/EBITDA are not meaningful to make this analysis between operating advantage (ROE) and growth expectations (as suggested by P/E or P/EBITDA).

• The company did not record any revenues for the last twelve months making the comparison of net margin versus asset turnover meaningless.

• Changes in annual earnings (relative to peers) are better than the change in its revenues (relative to peers), implying the company is focused more on earnings.

• 531300-IN‘s return on assets currently and over the past five years has trailed the peer median and suggests the company might be operationally challenged relative to its peers.

• 531300-IN‘s earnings and EBITDA are both negative which suggest that P/E or Price/EBITDA are not meaningful for an analysis between historical growth (using annualized three-year revenue growth) and investor growth expectations (as suggested by P/E or Price/EBITDA) .

• The company's relatively low level of capital investment and below peer median returns on capital suggest that the company is in maintenance mode.

• 531300-IN‘s operating performance may not allow it to raise additional debt.

Investment Outlook

Amit International Limited has a fundamental score of 14 and has a relative valuation of NEUTRAL.

Amit International Limited lies at the bottom left quadrant of CapitalCube's Value – Price Matrix. We call this space a Value Trap. At this level, Amit International Limited is potentially undervalued, since it trades lower than its CapitalCube Implied price of 4.43. However, its fundamental analysis score is also on the lower side at 14, begging the question whether the low price is on account of the weaker fundamentals.

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Drivers of Valuation

531300-IN‘s earnings and EBITDA are both negative.

531300-IN‘s earnings and EBITDA are both negative which suggest that P/E or Price/EBITDA are not meaningful to make this analysis between operating advantage (ROE) and growth expectations (as suggested by P/E or P/EBITDA).

The company trades at a lower Price/Book multiple of 0.37 compared to its peer median of 0.64.

Peer Analysis

A complete list of valuation metrics is available on the company page.

Company Profile

Amit International Ltd. engages in the trading of textiles, diamonds, fabrics, readymade garments, yarn, hosiery, cotton and blended socks vests, underwear, other knitted fabrics, textiles made of silk, art-silk, rayon, staple and synthetic fibres, cotton, wool, flax, hemp, jute, business of spinning, texturising, crimping and twisting of staple, synthetic fibre, silk, cotton, wool, flax, hemp, jute and other fibres, yarn or raw materials. The company was founded on February 18, 1994 and is headquartered in Mumbai, India.

Disclaimer

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Written By: CapitalCube