Investment Memo: 506522

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Our Rating: HOLD

Mehabe score: 3
G Factor: 4
Piotski Score: 5
The stock has a rating HOLD. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 4 and Piotski score of 5.

Description

JL Morison (India) Ltd is engaged in the trading and manufacturing of personal care products.Site: 506522

Technical Analysis

• Stock trades at 2071.0, above its 50dma 1976.36. It also trades above its 200dma 1893.92. The stock remains bullish on techicals
• The 52 week high is at 2170.00 and the 52week low is at 1650.50

Price Chart

P/E Chart

Sales and Margin

Strengths

– is almost debt free.

Weakness

– The company has delivered a poor sales growth of 1.31% over past five years.
– has a low return on equity of 3.32% for last 3 years.
-Earnings include an other income of Rs.3.08 Cr.

Competition

– The industry trades at a mean P/E of 43.2x. 3M India trades at the industry’s max P/E of 197.78x. 506522 trades at a P/E of 56.5x
– Industry’s mean G-Factor is 3.9 while the mean Piotski score is 7.0. 506522 has a G-Factor of 4 and Piotski scoreof 5.
– Average 1 month return for industry is 14.2%. The max 1- month return was given by Redington India: a return of 50.16 %

Quarterly Results

• Sales for period ended Mar 2021 is Rs 27.42 cr compared to Rs 23.87 cr for period ended Mar 2020, a rise of 14.9%
• Company reported operating profit of Rs 1.97 cr for period ended Mar 2021, operating profit margin at 7.2 %.
• Operating profit was negative for the same period last year thus company has improved its margins this year
• The EPS for Mar 2021 was Rs 16.48 compared to Rs 12.31 for previous quarter ended Dec 2020 and Rs 1.32 for Mar 2020

Profit & Loss Statement

Profit&Loss Comments

• Company reported sales of Rs 100.0 cr for period ended Mar 2021 vis-vis sales of Rs 93.0 cr for the period ended Mar 2020, a growth of 7.0%. The 3 year sales cagr stood at 5.2%.
• Operating margins expanded to 4.0% for period ended Mar 2021 vis-vis 3.0% for period ended Mar 2020, expansion of 100.0 bps.
• Net Profit reported at Rs 5.0 cr for period ended Mar 2021 vis-vis sales of Rs 4.0 cr for the period ended Mar 2020, rising 20.0%.
• Company reported a poor Net Profit CAGR of -20.6% over the last 3 years

Balance Sheet Statement

Cash Flow Statement

Cash Flow comments

Sales Growth

Profit Growth Statement

Profit Growth Statement

Stock Price CAGR

Return of Equity

General Comments

– The company has had stable/constant Return on Equity (RoE) metric. The RoE on Last Year basis was 3.0% compared to 3.0% over the last 3 Years.
– The stock has given a return of 12% on a 1 Year basis vis-vis a return of 11% over the last 3 Years.
– The compounded sales growth on a TTM bassis is 8% vis-vis a compounded sales growth of 5% over the last 3 Years.
– The compounded profit growth on a TTM basis is 36% vis-vis a compounded profit growth of -6% over the last 3 Years.

Ratios

Shareholding Pattern

– Public shareholding has remained largely constant. The Mar 2021 public holding stood at 25.1% vis-vis 25.1% for Dec 2020

Conclusion

– is almost debt free. – The company has delivered a poor sales growth of 1.31% over past five years.
– has a low return on equity of 3.32% for last 3 years.
-Earnings include an other income of Rs.3.08 Cr.

• The business fundamentals of the stock remain stable. Stronger near term results will build interest in the stock. We suggest to wait for a upturn in business performance.
• Technically, the stock remains above its 50 DMA 1976.36 and is trading at 2071.0, thus bullish price action wise.
• Thus, overall we retain a HOLD on the stock.

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