Mehabe score: 2 G Factor: 1 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 1 and Piotski score of 7.
Description
Vikas Multicorp Limited is an India-based company that is a polymer and polymer related trading company. The Company is engaged in the business of trading of various chemicals compounds, polymers, poly vinyl chloride resins, plastic granules, items related to plastic industry.Site:VIKASLIFE
Market Cap:
Rs 293 cr
Price:
3.15
Trading pe:
42.4x
Book-value:
0.58/share
Div yield:
0.00 %
Earning yield:
1.82%
Face-value:
1.00/share
52week high:
18.59
52week low:
2.34
Technical Analysis
Stock trades at 3.15, above its 50dma 3.13. However it is trading below its 200dma 4.12. The stock remains weak though short term bullish momentum supports price action. It needs to close above 4.12 for bullish price action to continue
The 52 week high is at 18.59 and the 52week low is at 2.34
Price Chart
P/E Chart
Sales and Margin
Strengths
–
Weakness
– Stock is trading at 5.47 times its book value
-Promoter holding has decreased over last quarter: -13.65%
-The company has delivered a poor sales growth of -4.28% over past five years.
-Promoter holding is low: 20.07%
– has a low return on equity of 3.73% for last 3 years.
– has high debtors of 565.78 days.
Competition
– The industry trades at a mean P/E of 44.8x. 3M India trades at the industry’s max P/E of 189.17x. VIKASLIFE trades at a P/E of 42.4x
– Industry’s mean G-Factor is 4.0 while the mean Piotski score is 7.0. VIKASLIFE has a G-Factor of 1 and Piotski scoreof 7.
– Average 1 month return for industry is 8.5%. The max 1- month return was given by Redington India: a return of 45.86 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 30.06 cr compared to Rs 33.44 cr for period ended Mar 2020, a fall of 10.1%
Operating Profits reported at Rs 8.72 cr for period ended Mar 2021 vis-vis 1.15 for period ended Mar 2020 .
Operating Margins expanded 2557.0 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs -0.04 compared to Rs 0.0 for previous quarter ended Dec 2020 and Rs -0.0 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 74.99 cr for period ended Mar 2021 vis-vis sales of Rs 155.16 cr for the period ended Mar 2020, a fall of 106.9%. The 3 year sales cagr stood at -27.3%.
Operating margins expanded to 10.35% for period ended Mar 2021 vis-vis 4.34% for period ended Mar 2020, expansion of 601.0 bps.
Net Profit reported at Rs -3.5 cr for period ended Mar 2021 vis-vis sales of Rs 1.4 cr for the period ended Mar 2020, falling 0%.
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 improved its Return on Equity (RoE) metric. The RoE on Last Year basis was 13.0% compared to 4.0% over the last 3 Years. – The stock has given a return of -29% on a 1 Year basis vis-vis a return of % over the last 3 Years. – The compounded sales growth on a TTM bassis is -52% vis-vis a compounded sales growth of -27% over the last 3 Years. – The compounded profit growth on a TTM basis is 212% vis-vis a compounded profit growth of 69% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has fallen for the period ended Mar 2021. The Mar 2021 fii holding stood at 0.02% vis-vis 13.18% for Dec 2020 – Public shareholding has risen for the period ended Mar 2021. The Mar 2021 public holding stood at 79.91% vis-vis 53.1% for Dec 2020
Conclusion
– – Stock is trading at 5.47 times its book value
-Promoter holding has decreased over last quarter: -13.65%
-The company has delivered a poor sales growth of -4.28% over past five years.
-Promoter holding is low: 20.07%
– has a low return on equity of 3.73% for last 3 years.
– has high debtors of 565.78 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 3.13 and is trading at 3.15 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
