Mehabe score: 5 G Factor: 3 Piotski Score: 6 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 6.
Description
South India Paper Mills is primarily engaged in the business of manufacture of Paper, Paperboards, Cartons and Power Generation.Site:516108
Market Cap:
Rs 172 cr
Price:
114.0
Trading pe:
10.1x
Book-value:
124/share
Div yield:
1.31 %
Earning yield:
12.61%
Face-value:
10.0/share
52week high:
114.90
52week low:
56.00
Technical Analysis
Stock trades at 114.0, above its 50dma 92.38. It also trades above its 200dma 81.01. The stock remains bullish on techicals
The 52 week high is at 114.90 and the 52week low is at 56.00
Price Chart
P/E Chart
Sales and Margin
Strengths
– Stock is trading at 0.92 times its book value
Weakness
– has a low return on equity of 10.51% for last 3 years.
– might be capitalizing the interest cost
-Debtor days have increased from 61.55 to 74.66 days.
Competition
– The industry trades at a mean P/E of 18.4x. Century Textiles trades at the industry’s max P/E of 62.35x. 516108 trades at a P/E of 10.1x
– Industry’s mean G-Factor is 4.2 while the mean Piotski score is 7.0. 516108 has a G-Factor of 3 and Piotski scoreof 6.
– Average 1 month return for industry is 20.5%. The max 1- month return was given by S I Paper Mills: a return of 34.73 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 71.04 cr compared to Rs 46.55 cr for period ended Mar 2020, a rise of 52.6%
Operating Profits reported at Rs 11.43 cr for period ended Mar 2021 vis-vis 6.67 for period ended Mar 2020 .
Operating Margins expanded 176.1 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 3.42 compared to Rs 3.15 for previous quarter ended Dec 2020 and Rs 2.13 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 227.0 cr for period ended Mar 2021 vis-vis sales of Rs 216.0 cr for the period ended Mar 2020, a growth of 4.8%. The 3 year sales cagr stood at 19.2%.
Operating margins expanded to 17.0% for period ended Mar 2021 vis-vis 16.0% for period ended Mar 2020, expansion of 100.0 bps.
Net Profit reported at Rs 19.0 cr for period ended Mar 2021 vis-vis sales of Rs 16.0 cr for the period ended Mar 2020, rising 15.8%.
Company recorded a healthy Net Profit CAGR of 166.8% 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 10.0% compared to 11.0% over the last 3 Years. – The stock has given a return of 91% on a 1 Year basis vis-vis a return of 6% over the last 3 Years. – The compounded sales growth on a TTM bassis is 5% vis-vis a compounded sales growth of 19% over the last 3 Years. – The compounded profit growth on a TTM basis is 6% vis-vis a compounded profit growth of 246% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2021 fii holding stood at 0.0% vis-vis 0.0% for Dec 2020 – Public shareholding has remained largely constant. The Mar 2021 public holding stood at 56.32% vis-vis 56.34% for Dec 2020
Conclusion
– Stock is trading at 0.92 times its book value – has a low return on equity of 10.51% for last 3 years.
– might be capitalizing the interest cost
-Debtor days have increased from 61.55 to 74.66 days.
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 92.38 and is trading at 114.0 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
