BSE:524000

Stock Analysis Report

Executive Summary

Magma Fincorp Limited, a non-banking finance company, provides asset finance services in India.

Rewards

PE ratio (9.8x) is below the Indian market (13.4x)

Earnings are forecast to grow 50.55% per year

Pays a high and reliable dividend of 1.49%

Risk Analysis

Highly volatile share price over past 3 months

Profit margins (11.5%) are lower than last year (17.9%)

Shareholders have been diluted in the past year



Snowflake Analysis

Established dividend payer and good value.


Similar Companies

Share Price & News

How has Magma Fincorp's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 524000's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-9.2%

524000

1.3%

IN Consumer Finance

-0.4%

IN Market


1 Year Return

-34.8%

524000

56.2%

IN Consumer Finance

11.1%

IN Market

Return vs Industry: 524000 underperformed the Indian Consumer Finance industry which returned 56.2% over the past year.

Return vs Market: 524000 underperformed the Indian Market which returned 11.1% over the past year.


Shareholder returns

524000IndustryMarket
7 Day-9.2%1.3%-0.4%
30 Day-21.6%8.5%-1.5%
90 Day36.6%11.9%3.3%
1 Year-34.2%-34.8%57.2%56.2%13.0%11.1%
3 Year-44.2%-45.3%137.6%132.6%25.3%18.6%
5 Year-43.7%-45.7%258.2%242.7%35.4%23.1%

Price Volatility Vs. Market

How volatile is Magma Fincorp's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is Magma Fincorp undervalued compared to its fair value and its price relative to the market?

9.82x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: 524000 (₹53.75) is trading above our estimate of fair value (₹13.53)

Significantly Below Fair Value: 524000 is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: 524000 is good value based on its PE Ratio (9.8x) compared to the Consumer Finance industry average (14.7x).

PE vs Market: 524000 is good value based on its PE Ratio (9.8x) compared to the Indian market (13.4x).


Price to Earnings Growth Ratio

PEG Ratio: 524000 is good value based on its PEG Ratio (0.2x)


Price to Book Ratio

PB vs Industry: 524000 is good value based on its PB Ratio (0.5x) compared to the IN Consumer Finance industry average (0.7x).


Next Steps

Future Growth

How is Magma Fincorp forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?

50.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 524000's forecast earnings growth (50.5% per year) is above the savings rate (6.5%).

Earnings vs Market: 524000's earnings (50.5% per year) are forecast to grow faster than the Indian market (20.4% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: 524000's revenue (10% per year) is forecast to grow faster than the Indian market (9% per year).

High Growth Revenue: 524000's revenue (10% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 524000's Return on Equity is forecast to be low in 3 years time (9.6%).


Next Steps

Past Performance

How has Magma Fincorp performed over the past 5 years?

7.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 524000 has high quality earnings.

Growing Profit Margin: 524000's current net profit margins (11.5%) are lower than last year (17.9%).


Past Earnings Growth Analysis

Earnings Trend: 524000's earnings have grown by 7.5% per year over the past 5 years.

Accelerating Growth: 524000's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 524000 had negative earnings growth (-49.4%) over the past year, making it difficult to compare to the Consumer Finance industry average (12.9%).


Return on Equity

High ROE: 524000's Return on Equity (5.4%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Magma Fincorp's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: 524000 has a low level of unsold assets or inventory.

Debt Coverage by Assets: 524000's debt is covered by short term assets (assets are 1.2x debt).


Financial Institutions Analysis

Asset Level: 524000's level of assets compared to its equity is low.

Allowance for Bad Loans: Insufficient data to determine if 524000 has a sufficient allowance for bad loans.

Low Risk Liabilities: 524000 reports no customer deposits, loans are made up entirely of externally borrowed funds.

Loan Level: Insufficient data to determine if 524000 has an acceptable proportion of non-loan assets held.

Low Risk Deposits: 524000 has advanced significantly more loans than the customer deposits it holds.

Level of Bad Loans: Insufficient data to determine if 524000 has an appropriate level of bad loans.


Next Steps

Dividend

What is Magma Fincorp's current dividend yield, its reliability and sustainability?

1.49%

Current Dividend Yield


Dividend Yield vs Market

company1.5%marketbottom25%0.6%markettop25%2.5%industryaverage0.5%forecastin3Years1.2%

Current dividend yield vs market & industry

Notable Dividend: 524000's dividend (1.49%) is higher than the bottom 25% of dividend payers in the Indian market (0.59%).

High Dividend: 524000's dividend (1.49%) is low compared to the top 25% of dividend payers in the Indian market (2.51%).


Stability and Growth of Payments

Stable Dividend: 524000's dividends per share have been stable in the past 10 years.

Growing Dividend: 524000's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (14.6%), 524000's dividend payments are thoroughly covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: 524000's dividends in 3 years are forecast to be thoroughly covered by earnings (6.6% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

3.3yrs

Average management tenure


CEO

Sanjay Chamria (55yo)

12.8yrs

Tenure

₹49,440,000

Compensation

Mr. Sanjay Chamria serves as Non-Executive Chairman at Magma Housing Finance Ltd. Mr. Chamria is a Promoter of Magma FinCorp. Limited (also known as Magma Leasing Limited) and has been its Managing Directo ...


CEO Compensation Analysis

Compensation vs Market: Sanjay's total compensation ($USD691.33K) is above average for companies of similar size in the Indian market ($USD298.20K).

Compensation vs Earnings: Sanjay's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Sanjay Chamria
Vice Chairman & MD12.8yrs₹49.44mno data
Kamal Kailash Baheti
President & Group CFO0yrs₹22.16m0.019% 2.7m
Mayank Poddar
Chairman Emeritus & Whole time Director3.5yrs₹16.84m0.18% 25.9m
Shabnum Zaman
Compliance Officer & Company Secretary4.5yrs₹2.70mno data
Rajneesh Mishra
Chief People Officer1.1yrsno datano data
Mahender Bagrodia
Chief Credit Officer of Asset Backed Finance0yrsno datano data
Sanjiv Jha
National Business Head- ABF0yrsno datano data
Deepak Patkar
Chief Executive Officer of Asset Based Finance Business2.1yrsno datano data
Akshay Dhanak
Head of Information Technology0yrsno datano data
Kaushik Banerjee
Adviser of Asset Finance0yrsno datano data

3.3yrs

Average Tenure

49yo

Average Age

Experienced Management: 524000's management team is considered experienced (3.3 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Sanjay Chamria
Vice Chairman & MD12.8yrs₹49.44mno data
Mayank Poddar
Chairman Emeritus & Whole time Director3.5yrs₹16.84m0.18% 25.9m
Narayan Seshadri
Non Executive Independent Chairman4.1yrs₹8.51mno data
Vegulaparanan Viswanathan
Non Executive Independent Director3.5yrs₹6.60m0.00053% 76.9k
Bontha Rao
Additional Independent Non-Executive Director0.2yrsno datano data
Sunil Chandiramani
Additional Independent Non-Executive Director0.2yrsno datano data
Vijayalakshmi Iyer
Non-Executive Independent Director1.1yrsno datano data

3.5yrs

Average Tenure

63yo

Average Age

Experienced Board: 524000's board of directors are considered experienced (3.5 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 3.6%.


Top Shareholders

Company Information

Magma Fincorp Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Magma Fincorp Limited
  • Ticker: 524000
  • Exchange: BSE
  • Founded: 1978
  • Industry: Consumer Finance
  • Sector: Diversified Financials
  • Market Cap: ₹14.509b
  • Shares outstanding: 269.43m
  • Website: https://www.magma.co.in

Number of Employees


Location

  • Magma Fincorp Limited
  • Equinox Business Park
  • 2nd Floor, Tower 3
  • Mumbai
  • Maharashtra
  • 400 070
  • India

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
524000BSE (Mumbai Stock Exchange)YesEquity SharesININRApr 2004
MAGMANSEI (National Stock Exchange of India)YesEquity SharesININRApr 2004

Biography

Magma Fincorp Limited, a non-banking finance company, provides asset finance services in India. The company offers loans for cars, SMEs, construction equipment, commercial vehicles, tractors, and used vehicles, as well as housing finance; and auto leasing services. It is also involved in the operation of windmills; and general insurance activities. As of May 15, 2019, it operated a network of 310 branches. Magma Fincorp Limited was incorporated in 1978 and is based in Mumbai, India. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/16 12:50
End of Day Share Price2020/02/14 00:00
Earnings2019/12/31
Annual Earnings2019/03/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.