Mehabe score: 2 G Factor: 1 Piotski Score: 8 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 1 and Piotski score of 8.
Description
Hardcastle And Waud Manufacturing Company is engaged in the business of Industrial Chemicals, Investment and Leasing activity.Site:509597
Market Cap:
Rs 15.5 cr
Price:
228.0
Trading pe:
29.2x
Book-value:
516/share
Div yield:
0.00 %
Earning yield:
8.04%
Face-value:
10.0/share
52week high:
255.80
52week low:
160.00
Technical Analysis
Stock trades at 228.0, above its 50dma 210.84. It also trades above its 200dma 199.56. The stock remains bullish on techicals
The 52 week high is at 255.80 and the 52week low is at 160.00
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
– is almost debt free.
-Stock is trading at 0.44 times its book value
-Debtor days have improved from 33.97 to 26.96 days.
Weakness
– Though the company is reporting repeated profits, it is not paying out dividend
-The company has delivered a poor sales growth of 2.31% over past five years.
– has a low return on equity of 1.94% for last 3 years.
Competition
– The industry trades at a mean P/E of 86.8x. Indigo Paints trades at the industry’s max P/E of 179.77x. 509597 trades at a P/E of 29.2x
– Industry’s mean G-Factor is 3.9 while the mean Piotski score is 8.0. 509597 has a G-Factor of 1 and Piotski scoreof 8.
– Average 1 month return for industry is 9.2%. The max 1- month return was given by Shalimar Paints: a return of 17.92 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 1.11 cr compared to Rs 1.47 cr for period ended Mar 2020, a fall of 24.5%
Operating Profits reported at Rs 0.29 cr for period ended Mar 2021 vis-vis 0.92 for period ended Mar 2020 .
Operating Margins contracted -3645.9 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 2.35 compared to Rs 0.88 for previous quarter ended Dec 2020 and Rs 9.86 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 3.19 cr for period ended Mar 2021 vis-vis sales of Rs 3.52 cr for the period ended Mar 2020, a fall of 10.3%. The 3 year sales cagr stood at -8.8%.
Operating margins shrank to 28.21% for period ended Mar 2021 vis-vis 41.76% for period ended Mar 2020, contraction of 1355.0 bps.
Net Profit reported at Rs 0.01 cr for period ended Mar 2021 vis-vis sales of Rs 0.9 cr for the period ended Mar 2020, falling 8900.0%.
Company reported a poor Net Profit CAGR of -79.1% 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 company has had stable/constant Return on Equity (RoE) metric. The RoE on Last Year basis was 3.0% compared to 2.0% over the last 3 Years. – The stock has given a return of 35% 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 21% vis-vis a compounded sales growth of -25% over the last 3 Years. – The compounded profit growth on a TTM basis is 33% vis-vis a compounded profit growth of -39% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Mar 2021 public holding stood at 26.45% vis-vis 26.45% for Dec 2020
Conclusion
– has reduced debt.
– is almost debt free.
-Stock is trading at 0.44 times its book value
-Debtor days have improved from 33.97 to 26.96 days. – Though the company is reporting repeated profits, it is not paying out dividend
-The company has delivered a poor sales growth of 2.31% over past five years.
– has a low return on equity of 1.94% for last 3 years.
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 210.84 and is trading at 228.0 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
