Diesel & Motor Engineering (COSE:DIMO.N0000) - Share price, News & Analysis

Q: What is the Fair Price of DIMO.N0000 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

DIMO.N0000 (LKR476.25) is trading above our estimate of [[fair value]] (LKR71.14)

DIMO.N0000 fundamental analysis
Snowflake Score
Valuation	2/6
Future Growth	0/6
Past Performance	5/6
Financial Health	5/6
Dividends	2/6

DIMO.N0000 Stock Overview

Diesel & Motor Engineering PLC sells passenger, commercial, special purpose, and pre-owned vehicles in Sri Lanka.

Rewards

Price-To-Earnings ratio (6.3x) is below the LK market (6.6x)

Earnings grew by 44.3% over the past year

Risk Analysis

Dividend of 2.62% is not well covered by earnings

Does not have a meaningful market cap (LKR4B)

Diesel & Motor Engineering Competitors

United Motors Lanka

COSE:UML.N0000

LK₨5.7b

Hunter

COSE:HUNT.N0000

LK₨3.7b

John Keells

COSE:JKL.N0000

LK₨3.9b

R I L Property

COSE:RIL.N0000

LK₨6.0b

Price History & Performance

Summary of all time highs, changes and price drops for Diesel & Motor Engineering
Historical stock prices
Current Share Price	LK₨476.25
52 Week High	LK₨1,450.00
52 Week Low	LK₨280.00
Beta	0.66
1 Month Change	33.87%
3 Month Change	27.00%
1 Year Change	-3.79%
3 Year Change	56.15%
5 Year Change	-7.21%
Change since IPO	1,356.31%

Shareholder Returns

	DIMO.N0000	LK Specialty Retail	LK Market
7D	12.4%	4.1%	8.4%
1Y	-3.8%	-14.9%	5.8%

Return vs Industry: DIMO.N0000 exceeded the LK Specialty Retail industry which returned -14.9% over the past year.

Return vs Market: DIMO.N0000 underperformed the LK Market which returned 5.8% over the past year.

Price Volatility

Is DIMO.N0000's price volatile compared to industry and market?
DIMO.N0000 volatility
DIMO.N0000 Average Weekly Movement	6.3%
Specialty Retail Industry Average Movement	5.0%
Market Average Movement	8.6%
10% most volatile stocks in LK Market	13.1%
10% least volatile stocks in LK Market	4.9%

Stable Share Price: DIMO.N0000 is less volatile than 75% of LK stocks over the past 3 months, typically moving +/- 6% a week.

Volatility Over Time: DIMO.N0000's weekly volatility has decreased from 12% to 6% over the past year.

About the Company

Founded	Employees	CEO	Website
1939	1,684	Aruna Pandithage	https://www.dimolanka.com

Diesel & Motor Engineering PLC sells passenger, commercial, special purpose, and pre-owned vehicles in Sri Lanka. It operates through six segments: Vehicles–Sales; After Sales Services, Retail, Construction and logistical solutions, Agriculture and Engineering solutions. The company engages in the import, sale, and repair of passenger vehicles, commercial vehicles, material handling machinery, construction machinery, agri machinery, earth moving machinery, car parking systems, and power tools; import and sale of vehicle spares, components, consumer products, accessories, lamps, home appliances, and paints; provision of solutions in lighting, storage systems, and power engineering, including solar power generation systems; and repack and distribution of fertilizers.

Diesel & Motor Engineering Fundamentals Summary

How do Diesel & Motor Engineering's earnings and revenue compare to its market cap?
DIMO.N0000 fundamental statistics
Market Cap	LK₨4.40b
Earnings (TTM)	LK₨702.12m
Revenue (TTM)	LK₨37.51b

6.3x

P/E Ratio

0.1x

P/S Ratio

Is DIMO.N0000 overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
DIMO.N0000 income statement (TTM)
Revenue	LK₨37.51b
Cost of Revenue	LK₨27.64b
Gross Profit	LK₨9.86b
Other Expenses	LK₨9.16b
Earnings	LK₨702.12m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	76.06
Gross Margin	26.30%
Net Profit Margin	1.87%
Debt/Equity Ratio	57.9%

How did DIMO.N0000 perform over the long term?

See historical performance and comparison

Dividends

2.6%

Current Dividend Yield

16%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is DIMO.N0000 undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

2/6

Valuation Score 2/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for DIMO.N0000?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for DIMO.N0000. This is calculated by dividing DIMO.N0000's market cap by their current preferred multiple.
What is DIMO.N0000's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	LK₨4.40b

DIMO.N0000 key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	0.3x
Enterprise Value/EBITDA	2.6x
PEG Ratio	n/a

Price to Earnings Ratio vs Peers

How does DIMO.N0000's PE Ratio compare to its peers?

DIMO.N0000 PE Ratio vs Peers

The above table shows the PE ratio for DIMO.N0000 vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	16.3x
UML.N0000 United Motors Lanka	34.6x	n/a	LK₨5.7b
HUNT.N0000 Hunter	6.1x	n/a	LK₨3.7b
JKL.N0000 John Keells	15.8x	n/a	LK₨3.9b
RIL.N0000 R I L Property	8.7x	n/a	LK₨6.0b
DIMO.N0000 Diesel & Motor Engineering	6.3x	n/a	LK₨4.4b

Price-To-Earnings vs Peers: DIMO.N0000 is good value based on its Price-To-Earnings Ratio (6.3x) compared to the peer average (16.3x).

Price to Earnings Ratio vs Industry

How does DIMO.N0000's PE Ratio compare vs other companies in the Asian Specialty Retail Industry?

Price-To-Earnings vs Industry: DIMO.N0000 is good value based on its Price-To-Earnings Ratio (6.3x) compared to the Asian Specialty Retail industry average (14.3x)

Price to Earnings Ratio vs Fair Ratio

What is DIMO.N0000's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

DIMO.N0000 PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	6.3x
Fair PE Ratio	n/a

Price-To-Earnings vs Fair Ratio: Insufficient data to calculate DIMO.N0000's Price-To-Earnings Fair Ratio for valuation analysis.

Share Price vs Fair Value

What is the Fair Price of DIMO.N0000 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: DIMO.N0000 (LKR476.25) is trading above our estimate of fair value (LKR71.14)

Significantly Below Fair Value: DIMO.N0000 is trading above our estimate of fair value.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Insufficient data to show price forecast.

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Future Growth

How is Diesel & Motor Engineering forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

Future Growth Score

0/6

Future Growth Score 0/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

16.4%

Forecasted Retail industry annual growth in earnings

In this section we usually present revenue and earnings growth projections based on the consensus estimates of professional analysts to help investors understand the company’s ability to generate profit. But as Diesel & Motor Engineering has not provided enough past data and has no analyst forecast, its future earnings cannot be reliably calculated by extrapolating past data or using analyst predictions.

This is quite a rare situation as 97% of companies covered by SimplyWall St do have past financial data.

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Check out Diesel & Motor Engineering's track record over time to understand how much the company has returned to shareholders and its earnings growth rate in the past.

Past Performance

How has Diesel & Motor Engineering performed over the past 5 years?

Past Performance Score

5/6

Past Performance Score 5/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

14.8%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: DIMO.N0000 has high quality earnings.

Growing Profit Margin: DIMO.N0000's current net profit margins (1.9%) are higher than last year (1.6%).

Past Earnings Growth Analysis

Earnings Trend: DIMO.N0000's earnings have grown by 14.8% per year over the past 5 years.

Accelerating Growth: DIMO.N0000's earnings growth over the past year (44.3%) exceeds its 5-year average (14.8% per year).

Earnings vs Industry: DIMO.N0000 earnings growth over the past year (44.3%) exceeded the Specialty Retail industry 12.8%.

Return on Equity

High ROE: DIMO.N0000's Return on Equity (5.5%) is considered low.

Discover strong past performing companies

Financial Health

How is Diesel & Motor Engineering's financial position?

Financial Health Score

5/6

Financial Health Score 5/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: DIMO.N0000's short term assets (LKR25.1B) exceed its short term liabilities (LKR20.5B).

Long Term Liabilities: DIMO.N0000's short term assets (LKR25.1B) exceed its long term liabilities (LKR4.4B).

Debt to Equity History and Analysis

Debt Level: DIMO.N0000's net debt to equity ratio (28.1%) is considered satisfactory.

Reducing Debt: DIMO.N0000's debt to equity ratio has reduced from 82.6% to 57.9% over the past 5 years.

Debt Coverage: DIMO.N0000's operating cash flow is negative, therefore debt is not well covered.

Interest Coverage: DIMO.N0000's interest payments on its debt are well covered by EBIT (4.7x coverage).

Balance Sheet

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Dividend

What is Diesel & Motor Engineering current dividend yield, its reliability and sustainability?

Dividend Score

2/6

Dividend Score 2/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

2.62%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: DIMO.N0000's dividend (2.62%) is higher than the bottom 25% of dividend payers in the LK market (2.25%).

High Dividend: DIMO.N0000's dividend (2.62%) is low compared to the top 25% of dividend payers in the LK market (8.27%).

Stability and Growth of Payments

Stable Dividend: DIMO.N0000's dividend payments have been volatile in the past 10 years.

Growing Dividend: DIMO.N0000's dividend payments have fallen over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its low payout ratio (16.4%), DIMO.N0000's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: DIMO.N0000 is paying a dividend but the company has no free cash flows.

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Management

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

6.9yrs

Average management tenure

CEO

Aruna Pandithage

10.33yrs

Tenure

Mr. Aruna Gahanath Pandithage has been the Chief Executive Officer of Diesel & Motor Engineering PLC (formerly, Diesel & Motor Engineers) since 1, 2012 and served as its Deputy Chief Executive Officer sinc...

Leadership Team

Experienced Management: DIMO.N0000's management team is seasoned and experienced (6.9 years average tenure).

Board Members

Experienced Board: DIMO.N0000's board of directors are seasoned and experienced ( 11 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 not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/08/14 00:00
End of Day Share Price	2022/08/12 00:00
Earnings	2022/03/31
Annual Earnings	2022/03/31