In this article we can explore the possibility of Spel Semiconductor Ltd as a Multibagger 2021 Stock based on Value Investing principles.
| Website | www.spel.com |
| CMP | Rs. 53.00 |
About Spel Semiconductor Ltd
SPEL Semiconductor Limited is India’s first & only Semiconductor IC Assembly & Test facility. SPEL pioneered the Outsourced Semiconductor Assembly & Test Services (OSAT) market in India and continues to steadily do so. SPEL is a trusted & strategic contract manufacturing partner for many of the world’s leading Semiconductor companies.
Established in 1988 and listed on the Bombay Stock Exchange ever since, SPEL initially supplied to the domestic market. SPEL soon acquired the expertise to serve the global market. SPEL’s Customers are some of the biggest Integrated Device Manufacturers (IDMs) and Fabless Companies in the United States and Asia. SPEL offers Packaging Technology for Semiconductors used in diverse end-market applications including Communications, Consumer Electronics and Computing.
SPEL Semiconductor Limited is engaged in offering electronic integrated circuits (ICs). The Company operates IC assembly and test facility. The Company’s factory is located in MM Nagar, near Chennai. The Company provides solutions that include wafer sort, assembly, test and drop-shipment services. The Company also offers value added services, such as package design, failure analysis and reliability test, test program development and product characterization. The Company’s customers include integrated device manufacturers (IDMs) and fabless companies in the United States, Asia and Europe. The Company offers packaging solutions for semiconductors used in a range of end market applications, including communications, consumer electronics, computing, industrial and automotive. It offers environmental reliability stress tests, such as temperature and humidity stress test, pressure pot test, high temperature storage life test and steady state temperature humidity bias life test.
Products
- Electronic Integrated Circuits(ICs)
Services
- Wafer sort Assembly
- Test and Drop-shipment services
- Package Design
- Failure Analysis
- Full Reliability Test
- Test Program Development
- Product Characterization
Profit & Loss
Warren Buffet, Value & Growth Checklist
| Capitalization | 250 Crore |  |
| Sales Increasing past 3 Years | No |  |
| Profit Increasing past 3 Years | No, Loss | |
| Durable Competitive Advantage | Okay | |
| PE Ratio | N.A | |
| PB Ratio | 4X | |
| Debt Equity Ratio | 0.73 | |
| Intrinsic Value Discount | 0% | |
| Promoter Holding & Increase | 59%, No Increase |  |
| Multibagger Returns | 100-200% 5 Year | |
Positives
The company can take advantage of the Semiconductor Boost in the country.
Negatives
- Company is in Loss
- Stock is trading at 4 times its book value
- Company has low interest coverage ratio.
- The company has delivered a poor sales growth of -9.24% over past five years.
- Company has a low return on equity of -6.59% for last 3 years.
- Company might be capitalizing the interest cost
- Company has high debtors of 926.26 days.
Summary
As per the Value Investing grounds the company have very low Multibagger Potential at current over-price valuation.
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