7NR Retail Limited: 1347% Return in One Year

7NR Retail Limited: 1300% return in One Year

About the Company:

The 7NR Retail Limited was established on 21st December 2012 as a private ltd.  under the Indian Companies Act, 1956. On 22nd March 2017, the name of the Company was renamed into “7NR Retail Limited”. The company deals in trading of apparels in Retail Segments as well as Wholesale market. Company’s mission is to develop the franchisee of their businesses in different cities of India by focusing more on Tier I & Tier II cities for the expansion of Company and to deliver superior quality products to value to their stakeholders and society at large.

 

Products and Services

The 7NR Retail Limited mainly deals in the business of Branding and selling of ready-made garments, suiting-shirting, fabrics and all other textile products.

Board of Directors:

PINAL SHAH (MANAGING DIRECTOR)

He is the chairperson and Managing Director of 7NR Retail. He has completed his bachelor degree in commerce from Gujarat University and Diploma in Technology Management from BIT & E-commerce, London United Kingdom. He is having more than 9 years of experience in readymade garment businesses and also has a vast and excellent knowledge in IT Sector, software handling and development. Being the Chairperson and Managing Director of the Company, he is responsible for the overall growth and development of the Company.

 

Mrs. Rachanaben Jain (Independent Director)

Mr. Sudhir Harshadbhai Baraiya (Independent Director)

MR.VINAY RAVAL (INDEPENDENT DIRECTOR)

Ms. Kiran Prajapati (Company Secretary and Compliance Officer)

Mr. Mittal Shah (Chief Financial Officer)

7NR Retail Limited

Financial Analysis:

Market Cap: 240.91 Cr.

Current Price: 230.00

52 weeks High / Low 230.05 / 10.80

Book Value: 10.20

Stock P/E: 1,147

Dividend Yield: 0.02 %

ROCE: 2.59 %

ROE: 1.97 %

Sales Growth (3Yrs): 56.48 %

 

 

Compounding Sales Growth

Compounding Profit Growth

Stock Price CAGR

Return on Equity

10 Years

NA

NA

NA

NA

5 Years

23.64%

21.19%

-8.37%

27.58%

3 Years

22.67%

20.93%

-23%

27.19%

 

Market Cap: From the market point of view this stock comes under the small-cap category because there are certain criteria that define which stock should be in Large-Cap, Mid-Cap or in Small-Cap.

52 weeks High/Low: The best part of this stock is that there is consistent growth in price over the period.

Stock P/E: Profit earning of this stock is extremely high that I have not seen before in any Indian stock, though able to multiply consistent profit for their investors.

Dividend Yield: Dividend Yield is not adorable and that is just 0.02%. So, from a dividend point of view, this stock is not preferable.

Others Financial Parameters: If we will talk about fundamental analysis ( Compounding Sales Growth / Compounding Profit Growth / Stock Price CAGR / Return on Equity ) of this stock that does not sound too good.

 

Life Time Chart of This Multibagger:

Chart Analysis: The best chart pattern that I have ever seen in my life of any company. 7NR Retail has made its all-time low in January 2019, but onward, this stock is making a new high on a daily basis. This August-September period was the worst period for Indian stock market when the market was going deep on a daily basis but this stock was making daily new all-time high.

Pros:

  • 7NR Retail Limited is virtually debt-free.
  • Company has been maintaining a healthy dividend payout of 22.85%

Cons:

  • Stock is trading at 22.36 times its book value
  • 7NR Retail Limited has a low return on equity of 2.98% for last 3 years.

 

Competitors of 7NR Retail Limited:

  • Avenue Super.
  • Trent
  • Future Retail
  • V-Mart Retail
  • Arvind Fashions.
  • Spencer’s Retail

 

Profit & and Loss Account:

Narration

Mar-17

Mar-18

Mar-19

Trailing

Sales

 11.34

 10.08

 13.22

 9.04

Expenses

 10.95

 10.00

 12.87

 8.45

Operating Profit

 0.39

 0.08

 0.35

 0.59

Other Income

 0.08

 0.17

 0.06

 0.01

Depreciation

 0.04

 0.09

 0.13

 0.12

Interest

 0.02

 0.01

 0.01

 – 

Profit before tax

 0.41

 0.15

 0.27

 0.48

Tax

 0.04

 0.07

 0.07

 0.11

Net profit

 0.38

 0.08

 0.21

 0.37

EPS

 0.75

 0.11

 0.20

 0.35

Price to earning

 

 157.12

 243.66

 651.11

 

Price

 – 

 18.00

 48.85

 230.00

 

 

 

Balance Sheet:

Narration

Mar-17

Mar-18

Mar-19

Equity Share Capital

 5.09

 6.98

 10.47

Reserves

 0.32

 3.62

 0.21

Borrowings

 – 

 – 

 0.30

Other Liabilities

 0.87

 1.57

 3.61

Total

 6.28

 12.17

 14.59

Net Block

 0.86

 1.05

 1.27

Capital Work in Progress

 – 

 – 

 – 

Investments

 – 

 – 

 – 

Other Assets

 5.42

 11.12

 13.32

Total

 6.28

 12.17

 14.59

Working Capital

 4.55

 9.55

 9.71

Debtors

 0.36

 0.13

 0.11

Inventory

 1.43

 4.40

 5.86

Debtor Days

 11.59

 4.71

 3.04

Inventory Turnover

 7.93

 2.29

 2.26

Return on Equity

7%

1%

2%

Return on Capital Emp

11%

2%

3%

 

Why you should buy this stock?

Every person who is invested in the stock market, are having the ultimate aim to multiply there their profit. It does not matters, how you are making a profit, by just doing the technical analysis or fundamental analysis. Apart from this, some people apply their own expertise for stock selection. But everyone has only one aim in this market is to make a profit. There are a few points that will help you to make a decision, you should invest in this stock or not?

  • 7NR Retail Limited financial performance of this stock is not so poor as it seems
  • 7NR Retail Limited is at its growth stage
  • Not a single business channel or business magazine talk about this stock. So, you have a chance of being an early gainer
  • 7NR Retail Limited’s management is in good hand
  • Consistent profit from last 3 years
  • Volume growth is also supporting the price
  • Completely debt-free company
  • There is a huge growth in volume from the last few weeks
  • And at last, investors are bullish on this stock till the level of 400 per share

 

Why you should not invest in this stock?

Again the same thing, the stock market is a place of uncertainty anything can happen overnight and this stock is not well recognised in the market or well established. When we talk about the market experts they recommend that a market is a place where your first point should be to protect your hard-earned money because the market always gives an opportunity to earn money but it is your liability to protect your money. Reason for not investment:

  • 7NR Retail Limited and not well–known brand
  • High profit earning ratio, highest in industry
  • There is a high chance of volatility in stock price
  • The financial status of the 7NR Retail Limited is not looking very sound

 

How much money you should invest in this stock?

As we have discussed the pros and cons of this stock but in a single short we cannot say that this stock is good or bad for investment because every coin has two sides. Though we know that this stock has given 1300% return in one just year, so we cannot avoid this. But the question is, how much money you should invest? My advice is to you that you should invest in this stock, not the huge amount but definitely, your pocket money means that much of amount that you bear as a loss. For example; if you have a portfolio of rupees 10,00,000 then you can invest in this stock 5% of your total portfolio that is 5000.

 

Conclusion:

Now we have all ins and outs of this stock and it will be your take to invest. In my view, there is not a single stock in this market that can give 100% assurance that they are safe and they will protect your money and you safe with them. So, my suggestion will that you invest in this with the least amount.

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