Mehabe score: 7 G Factor: 2 Piotski Score: 4 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 4.
Description
Junction Fabrics & Apparels is engaged in the business of manufacturing, selling and distribution of fabrics, hosiery garments and providing of related services.(Source : 201903 Annual Report Page No: 65)Site:539216
Market Cap:
Rs 109 cr
Price:
109.0
Trading pe:
19.9x
Book-value:
9.21/share
Div yield:
0.00 %
Earning yield:
4.37%
Face-value:
10.0/share
52week high:
114.50
52week low:
33.00
Technical Analysis
Stock trades at 109.0, above its 50dma 90.94. It also trades above its 200dma 75.51. The stock remains bullish on techicals
The 52 week high is at 114.50 and the 52week low is at 33.00
Price Chart
P/E Chart
Sales and Margin
Strengths
– has delivered good profit growth of 56.64% CAGR over last 5 years
– has a good return on equity (ROE) track record: 3 Years ROE 37.20%
Weakness
– Stock is trading at 11.79 times its book value
-Though the company is reporting repeated profits, it is not paying out dividend
Competition
– The industry trades at a mean P/E of 23.3x. Garware Tech. trades at the industry’s max P/E of 41.95x. 539216 trades at a P/E of 19.9x
– Industry’s mean G-Factor is 3.8 while the mean Piotski score is 8.0. 539216 has a G-Factor of 2 and Piotski scoreof 4.
– Average 1 month return for industry is 11.3%. The max 1- month return was given by PDS Multi.: a return of 26.72 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 46.85 cr compared to Rs 30.18 cr for period ended Mar 2020, a rise of 55.2%
Operating Profits reported at Rs 4.47 cr for period ended Mar 2021 vis-vis 2.42 for period ended Mar 2020 .
Operating Margins expanded 152.3 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 2.75 compared to Rs 1.28 for previous quarter ended Dec 2020 and Rs 3.47 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 106.0 cr for period ended Mar 2021 vis-vis sales of Rs 93.0 cr for the period ended Mar 2020, a healthy growth of 12.3%. The 3 year sales cagr stood at 10.3%.
Operating margins expanded to 9.0% for period ended Mar 2021 vis-vis 6.0% for period ended Mar 2020, expansion of 300.0 bps.
Net Profit reported at Rs 5.0 cr for period ended Mar 2021 vis-vis sales of Rs 2.0 cr for the period ended Mar 2020, rising 60.0%.
Company recorded a healthy Net Profit CAGR of 71.0% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities: Rs 0.0 cr for period ended Mar 2021 vis-vis Rs -3.0 cr for period ended Mar 2020
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 59.0% compared to 37.0% over the last 3 Years. – The stock has given a return of 226% on a 1 Year basis vis-vis a return of 79% over the last 3 Years. – The compounded sales growth on a TTM bassis is 14% vis-vis a compounded sales growth of 10% over the last 3 Years. – The compounded profit growth on a TTM basis is 136% vis-vis a compounded profit growth of 87% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Mar 2021 public holding stood at 50.86% vis-vis 50.86% for Dec 2020
Conclusion
– has delivered good profit growth of 56.64% CAGR over last 5 years
– has a good return on equity (ROE) track record: 3 Years ROE 37.20% – Stock is trading at 11.79 times its book value
-Though the company is reporting repeated profits, it is not paying out dividend
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 90.94 and is trading at 109.0 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
