Mehabe score: 3 G Factor: 2 Piotski Score: 5 The stock has a rating OBSERVE & 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 2 and Piotski score of 5.
Description
Asahi India Glass Ltd. (AIS) is India’s leading value-added and integrated glass solutions company and a dominant player both in the automotive and architectural glass segments. Established in 1984, It was formed as a Joint Venture between The Labroo Family, Asahi Glass Co. of Japan and Maruti Udyog Ltd (now Maruti Suzuki India Ltd).
Main Points
Dominance in Auto Glass Market
It is the dominant player in Indian auto glass market and is also recognized as the strategic supplier of choice. With a market share of approx. 73% in the passenger vehicle segment, AIS’s Auto Glass is with nearly three out of every four cars, SUVs and MUVs manufactured in India. It’s customers include Maruti Suzuki (also promoter), Hyundai, Motors, Tata Motors, Mahindra, Toyota, MG, Renault and many more.Site:ASAHIINDIA
Market Cap:
Rs 8,273 cr
Price:
340.0
Trading pe:
81.9x
Book-value:
52.5/share
Div yield:
0.29 %
Earning yield:
2.47%
Face-value:
1.00/share
52week high:
358.80
52week low:
158.00
Technical Analysis
Stock trades at 340.0, above its 50dma 314.13. It also trades above its 200dma 276.91. The stock remains bullish on techicals
The 52 week high is at 358.80 and the 52week low is at 158.00
Price Chart
P/E Chart
Sales and Margin
Strengths
–
Weakness
– Stock is trading at 6.48 times its book value
– has low interest coverage ratio.
-The company has delivered a poor sales growth of 4.72% over past five years.
-Tax rate seems low
Competition
– The industry trades at a mean P/E of 40.4x. Asahi India Glas trades at the industry’s max P/E of 81.92x. ASAHIINDIA trades at a P/E of 81.9x
– Industry’s mean G-Factor is 2.9 while the mean Piotski score is 8.0. ASAHIINDIA has a G-Factor of 2 and Piotski scoreof 5.
– Average 1 month return for industry is 12.7%. The max 1- month return was given by Hind.Natl.Glass: a return of 29.68 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 815.0 cr compared to Rs 600.0 cr for period ended Mar 2020, a rise of 35.8%
Operating Profits reported at Rs 182.0 cr for period ended Mar 2021 vis-vis 89.0 for period ended Mar 2020 .
Operating Margins expanded 749.8 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 3.48 compared to Rs 3.04 for previous quarter ended Dec 2020 and Rs 2.16 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 2434.0 cr for period ended Mar 2021 vis-vis sales of Rs 2643.0 cr for the period ended Mar 2020, a fall of 8.6%. The 3 year sales cagr stood at -2.6%.
Operating margins expanded to 18.0% for period ended Mar 2021 vis-vis 16.0% for period ended Mar 2020, expansion of 200.0 bps.
Net Profit reported at Rs 133.0 cr for period ended Mar 2021 vis-vis sales of Rs 154.0 cr for the period ended Mar 2020, falling 15.8%.
Company reported a poor Net Profit CAGR of -9.1% 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 stock has given a return of 103% on a 1 Year basis vis-vis a return of -0% over the last 3 Years. – The compounded sales growth on a TTM bassis is -20% vis-vis a compounded sales growth of 4% over the last 3 Years. – The compounded profit growth on a TTM basis is -31% vis-vis a compounded profit growth of 2% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2021 fii holding stood at 1.14% vis-vis 1.15% for Dec 2020 – Public shareholding has remained largely constant. The Mar 2021 public holding stood at 43.4% vis-vis 43.71% for Dec 2020
Conclusion
– – Stock is trading at 6.48 times its book value
– has low interest coverage ratio.
-The company has delivered a poor sales growth of 4.72% over past five years.
-Tax rate seems low
Fundamentally, the stock remains weak on business fundamentals. Weak near term results have dampened and questioned business drivers. We suggest to wait for a upturn in business performance.
Technically, the stock trades above its 50 DMA 314.13 and is trading at 340.0 It has shown near term bullish momentum contrary to business fundamentals. We suggest to observe price action. However as investors, who like to avoid timing the markets, we suggest to avoid the stock
