Mehabe score: 4 G Factor: 3 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 3 and Piotski score of 7.
Description
Brady and Morris Engineering Co is engaged in the business of manufacturing of Material handling equipment.Site:505690
Market Cap:
Rs 19.7 cr
Price:
87.4
Trading pe:
23.2x
Book-value:
21.4/share
Div yield:
0.00 %
Earning yield:
3.52%
Face-value:
10.0/share
52week high:
118.40
52week low:
60.00
Technical Analysis
Stock trades at 87.4, above its 50dma 85.4. It also trades above its 200dma 80.31. The stock remains bullish on techicals
The 52 week high is at 118.40 and the 52week low is at 60.00
Price Chart
P/E Chart
Sales and Margin
Strengths
– Debtor days have improved from 132.34 to 82.62 days.
Weakness
– Stock is trading at 4.09 times its book value
-Though the company is reporting repeated profits, it is not paying out dividend
-The company has delivered a poor sales growth of 6.59% over past five years.
– has a low return on equity of -0.60% for last 3 years.
-Contingent liabilities of Rs.10.51 Cr.
– might be capitalizing the interest cost
-Earnings include an other income of Rs.0.77 Cr.
Competition
– The industry trades at a mean P/E of 21.4x. HLE Glascoat trades at the industry’s max P/E of 93.61x. 505690 trades at a P/E of 23.2x
– Industry’s mean G-Factor is 3.4 while the mean Piotski score is 8.0. 505690 has a G-Factor of 3 and Piotski scoreof 7.
– Average 1 month return for industry is 2.0%. The max 1- month return was given by HLE Glascoat: a return of 16.15 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 11.73 cr compared to Rs 7.88 cr for period ended Mar 2020, a rise of 48.9%
Company reported operating profit of Rs 0.5 cr for period ended Mar 2021, operating profit margin at 4.3 %.
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 3.64 compared to Rs 4.49 for previous quarter ended Dec 2020 and Rs -4.27 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 38.09 cr for period ended Mar 2021 vis-vis sales of Rs 44.0 cr for the period ended Mar 2020, a fall of 15.5%. The 3 year sales cagr stood at 17.1%.
Operating margins expanded to 7.69% for period ended Mar 2021 vis-vis 6.95% for period ended Mar 2020, expansion of 74.0 bps.
Net Profit reported at Rs 2.63 cr for period ended Mar 2021 vis-vis sales of Rs 1.84 cr for the period ended Mar 2020, rising 0%.
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 improved its Return on Equity (RoE) metric. The RoE on Last Year basis was 8.0% compared to -1.0% over the last 3 Years. – The stock has given a return of 28% on a 1 Year basis vis-vis a return of 14% over the last 3 Years. – The compounded sales growth on a TTM bassis is -28% vis-vis a compounded sales growth of 7% over the last 3 Years. – The compounded profit growth on a TTM basis is -79% vis-vis a compounded profit growth of 212% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Mar 2021 public holding stood at 26.21% vis-vis 26.21% for Dec 2020
Conclusion
– Debtor days have improved from 132.34 to 82.62 days. – Stock is trading at 4.09 times its book value
-Though the company is reporting repeated profits, it is not paying out dividend
-The company has delivered a poor sales growth of 6.59% over past five years.
– has a low return on equity of -0.60% for last 3 years.
-Contingent liabilities of Rs.10.51 Cr.
– might be capitalizing the interest cost
-Earnings include an other income of Rs.0.77 Cr.
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 85.4 and is trading at 87.4 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
