Mehabe score: 5 G Factor: 4 Piotski Score: 5 The stock has a rating 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 4 and Piotski score of 5.
Description
Ponni Sugars (Erode) is engaged in the manufacturing and selling of sugar. The Company operates through two segments: Sugar and Cogeneration. The Company’s products include Sugar, Bagasse, Molasses and Power.(Source : Company Web-site)Site:PONNIERODE
Market Cap:
Rs 226 cr
Price:
263.0
Trading pe:
8.79x
Book-value:
380/share
Div yield:
1.52 %
Earning yield:
17.55%
Face-value:
10.0/share
52week high:
241.00
52week low:
131.15
Technical Analysis
Stock trades at 263.0, above its 50dma 196.92. It also trades above its 200dma 169.69. The stock remains bullish on techicals
The 52 week high is at 241.00 and the 52week low is at 131.15
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
– is almost debt free.
-Stock is trading at 0.69 times its book value
– has delivered good profit growth of 38.54% CAGR over last 5 years
Weakness
– The company has delivered a poor sales growth of 8.65% over past five years.
-Tax rate seems low
– has a low return on equity of 7.81% for last 3 years.
Competition
– The industry trades at a mean P/E of 15.5x. Bannari Amm.Sug. trades at the industry’s max P/E of 24.49x. PONNIERODE trades at a P/E of 8.79x
– Industry’s mean G-Factor is 3.6 while the mean Piotski score is 8.0. PONNIERODE has a G-Factor of 4 and Piotski scoreof 5.
– Average 1 month return for industry is 30.1%. The max 1- month return was given by Sh.Renuka Sugar: a return of 102.81 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 62.46 cr compared to Rs 63.44 cr for period ended Mar 2020, a fall of 1.5%
Operating Profits reported at Rs 11.55 cr for period ended Mar 2021 vis-vis 13.1 for period ended Mar 2020 .
Operating Margins contracted -215.8 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 9.2 compared to Rs 0.74 for previous quarter ended Dec 2020 and Rs 10.58 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 256.0 cr for period ended Mar 2021 vis-vis sales of Rs 310.0 cr for the period ended Mar 2020, a fall of 21.1%. The 3 year sales cagr stood at 9.3%.
Operating margins shrank to 12.0% for period ended Mar 2021 vis-vis 13.0% for period ended Mar 2020, contraction of 100.0 bps.
Net Profit reported at Rs 26.0 cr for period ended Mar 2021 vis-vis sales of Rs 31.0 cr for the period ended Mar 2020, falling 19.2%.
Company recorded a healthy Net Profit CAGR of 105.4% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 29.0 cr for period ended Mar 2021 vis-vis Rs 16.0 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 had stable/constant Return on Equity (RoE) metric. The RoE on Last Year basis was 9.0% compared to 8.0% over the last 3 Years. – The stock has given a return of 69% on a 1 Year basis vis-vis a return of 28% over the last 3 Years. – The compounded sales growth on a TTM bassis is -17% vis-vis a compounded sales growth of 9% over the last 3 Years. – The compounded profit growth on a TTM basis is -16% vis-vis a compounded profit growth of 23% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2021 fii holding stood at 21.17% vis-vis 21.17% for Dec 2020 – Public shareholding has remained largely constant. The Mar 2021 public holding stood at 32.93% vis-vis 32.93% for Dec 2020
Conclusion
– has reduced debt.
– is almost debt free.
-Stock is trading at 0.69 times its book value
– has delivered good profit growth of 38.54% CAGR over last 5 years – The company has delivered a poor sales growth of 8.65% over past five years.
-Tax rate seems low
– has a low return on equity of 7.81% for last 3 years.
The business fundamentals of the stock remain stable. Stronger near term results will build interest in the stock. We suggest to wait for a upturn in business performance.
Technically, the stock remains above its 50 DMA 196.92 and is trading at 263.0, thus bullish price action wise.
