Mehabe score: 3 G Factor: 2 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 2 and Piotski score of 7.
Description
Haryana Leather Chemicals is a leading product technology from technical alliances in Italy and Spain, resulting in an extensive range of chemicals, coatings and dispersions.Site:524080
Market Cap:
Rs 18.7 cr
Price:
38.2
Trading pe:
9.7x
Book-value:
6.71/share
Div yield:
0.00 %
Earning yield:
45.72%
Face-value:
10.0/share
52week high:
44.30
52week low:
21.25
Technical Analysis
Stock trades at 38.2, above its 50dma 36.45. It also trades above its 200dma 30.97. The stock remains bullish on techicals
The 52 week high is at 44.30 and the 52week low is at 21.25
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
– is almost debt free.
Weakness
– Stock is trading at 5.68 times its book value
-The company has delivered a poor sales growth of -3.74% over past five years.
– has a low return on equity of 5.88% for last 3 years.
-Earnings include an other income of Rs.1.51 Cr.
Competition
– The industry trades at a mean P/E of 27.7x. Pidilite Inds. trades at the industry’s max P/E of 96.86x. 524080 trades at a P/E of 9.7x
– Industry’s mean G-Factor is 3.2 while the mean Piotski score is 8.0. 524080 has a G-Factor of 2 and Piotski scoreof 7.
– Average 1 month return for industry is 1.4%. The max 1- month return was given by Aarti Industries: a return of 4.64 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 7.73 cr compared to Rs 8.44 cr for period ended Mar 2020, a fall of 8.4%
Operating Profits reported at Rs 0.32 cr for period ended Mar 2021 vis-vis 0.45 for period ended Mar 2020 .
Operating Margins contracted -119.2 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 0.04 compared to Rs 0.13 for previous quarter ended Dec 2020 and Rs 0.11 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 27.84 cr for period ended Mar 2021 vis-vis sales of Rs 35.03 cr for the period ended Mar 2020, a fall of 25.8%. The 3 year sales cagr stood at -7.8%.
Operating margins expanded to 6.36% for period ended Mar 2021 vis-vis 6.25% for period ended Mar 2020, expansion of 11.0 bps.
Net Profit reported at Rs 1.6 cr for period ended Mar 2021 vis-vis sales of Rs 2.09 cr for the period ended Mar 2020, falling 30.6%.
Company reported a poor Net Profit CAGR of -2.6% 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 7.0% compared to 6.0% over the last 3 Years. – The stock has given a return of 83% on a 1 Year basis vis-vis a return of 4% over the last 3 Years. – The compounded sales growth on a TTM bassis is -19% vis-vis a compounded sales growth of -4% over the last 3 Years. – The compounded profit growth on a TTM basis is -8% vis-vis a compounded profit growth of 2% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Mar 2021 public holding stood at 58.22% vis-vis 58.22% for Dec 2020
Conclusion
– has reduced debt.
– is almost debt free. – Stock is trading at 5.68 times its book value
-The company has delivered a poor sales growth of -3.74% over past five years.
– has a low return on equity of 5.88% for last 3 years.
-Earnings include an other income of Rs.1.51 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 36.45 and is trading at 38.2 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
