Mehabe score: 3 G Factor: 2 Piotski Score: 7 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 7.
Description
Arvee Laboratories (India) is engaged in Business of Chemicals.(Source : 201903 Annual Report Page No: 27)Site:ARVEE
Market Cap:
Rs 139 cr
Price:
126.0
Trading pe:
66.3x
Book-value:
17.0/share
Div yield:
0.00 %
Earning yield:
2.74%
Face-value:
10.0/share
52week high:
215.95
52week low:
20.65
Technical Analysis
Stock trades at 126.0, above its 50dma 113.88. It also trades above its 200dma 68.64. The stock remains bullish on techicals
The 52 week high is at 215.95 and the 52week low is at 20.65
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
-Debtor days have improved from 74.44 to 52.40 days.
Weakness
– Stock is trading at 7.41 times its book value
-Though the company is reporting repeated profits, it is not paying out dividend
– has a low return on equity of 12.73% for last 3 years.
-‘s cost of borrowing seems high
Competition
– The industry trades at a mean P/E of 27.4x. Arvee Laborat. trades at the industry’s max P/E of 66.31x. ARVEE trades at a P/E of 66.3x
– Industry’s mean G-Factor is 3.5 while the mean Piotski score is 9.0. ARVEE has a G-Factor of 2 and Piotski scoreof 7.
– Average 1 month return for industry is 2.0%. The max 1- month return was given by Syncom Formul.: a return of 37.33 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 8.85 cr compared to Rs 8.68 cr for period ended Jun 2017, a rise of 2.0%
Operating Profits reported at Rs 1.04 cr for period ended Mar 2021 vis-vis 1.47 for period ended Jun 2017 .
Operating Margins contracted -518.4 bps for period ended Mar 2021 vis-vis Jun 2017 .
The EPS for Mar 2021 was Rs 0.39 compared to Rs 1.39 for previous quarter ended Dec 2020 and Rs 0.16 for Jun 2017
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 47.38 cr for period ended Mar 2021 vis-vis sales of Rs 45.42 cr for the period ended Mar 2020, a growth of 4.1%. The 3 year sales cagr stood at -0.3%.
Operating margins shrank to 12.77% for period ended Mar 2021 vis-vis 13.25% for period ended Mar 2020, contraction of 48.0 bps.
Net Profit reported at Rs 2.68 cr for period ended Mar 2021 vis-vis sales of Rs 2.23 cr for the period ended Mar 2020, rising 16.8%.
Company recorded a healthy Net Profit CAGR of 35.0% 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 12.0% compared to 13.0% over the last 3 Years. – The stock has given a return of 529% on a 1 Year basis vis-vis a return of 68% over the last 3 Years. – The compounded sales growth on a TTM bassis is -17% vis-vis a compounded sales growth of 10% over the last 3 Years. – The compounded profit growth on a TTM basis is -4% vis-vis a compounded profit growth of 10% over the last 3 Years.
Ratios
Conclusion
– has reduced debt.
-Debtor days have improved from 74.44 to 52.40 days. – Stock is trading at 7.41 times its book value
-Though the company is reporting repeated profits, it is not paying out dividend
– has a low return on equity of 12.73% for last 3 years.
-‘s cost of borrowing seems high
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 113.88 and is trading at 126.0 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
