Mehabe score: 2 G Factor: 2 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 2 and Piotski score of 6.
Description
Magna Eletrocasting is engaged in the manufacturing and selling of Cast Iron Components.(Source : 201903 Annual Report Page No: 82)Site:517449
Market Cap:
Rs 76.2 cr
Price:
180.0
Trading pe:
14.0x
Book-value:
184/share
Div yield:
1.39 %
Earning yield:
14.51%
Face-value:
10.0/share
52week high:
199.85
52week low:
102.60
Technical Analysis
Stock trades at 180.0, above its 50dma 165.43. It also trades above its 200dma 160.32. The stock remains bullish on techicals
The 52 week high is at 199.85 and the 52week low is at 102.60
Price Chart
P/E Chart
Sales and Margin
Strengths
– is almost debt free.
-Stock is trading at 0.98 times its book value
Weakness
– The company has delivered a poor sales growth of -1.05% over past five years.
– has a low return on equity of 12.74% for last 3 years.
Competition
– The industry trades at a mean P/E of 43.4x. Bharat Forge trades at the industry’s max P/E of 442.52x. 517449 trades at a P/E of 14.0x
– Industry’s mean G-Factor is 2.5 while the mean Piotski score is 8.0. 517449 has a G-Factor of 2 and Piotski scoreof 6.
– Average 1 month return for industry is 10.6%. The max 1- month return was given by M M Forgings: a return of 34.95 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 28.53 cr compared to Rs 20.19 cr for period ended Mar 2020, a rise of 41.3%
Operating Profits reported at Rs 0.9 cr for period ended Mar 2021 vis-vis 0.66 for period ended Mar 2020 .
Operating Margins contracted -11.4 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 0.4 compared to Rs 1.77 for previous quarter ended Dec 2020 and Rs 0.61 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 97.82 cr for period ended Mar 2021 vis-vis sales of Rs 96.32 cr for the period ended Mar 2020, a growth of 1.5%. The 3 year sales cagr stood at 1.7%.
Operating margins shrank to 10.26% for period ended Mar 2021 vis-vis 11.25% for period ended Mar 2020, contraction of 99.0 bps.
Net Profit reported at Rs 5.18 cr for period ended Mar 2021 vis-vis sales of Rs 6.69 cr for the period ended Mar 2020, falling 29.2%.
Company reported a poor Net Profit CAGR of -8.9% 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 worsened on its Return on Equity (RoE) metric. The RoE on Last Year basis was 9.0% compared to 13.0% over the last 3 Years. – The stock has given a return of 56% on a 1 Year basis vis-vis a return of 5% over the last 3 Years. – The compounded sales growth on a TTM bassis is -18% vis-vis a compounded sales growth of 7% over the last 3 Years. – The compounded profit growth on a TTM basis is -34% vis-vis a compounded profit growth of -3% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2021 fii holding stood at 1.18% vis-vis 1.18% for Dec 2020 – Public shareholding has remained largely constant. The Mar 2021 public holding stood at 46.24% vis-vis 46.36% for Dec 2020
Conclusion
– is almost debt free.
-Stock is trading at 0.98 times its book value – The company has delivered a poor sales growth of -1.05% over past five years.
– has a low return on equity of 12.74% for last 3 years.
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 165.43 and is trading at 180.0 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
