Mehabe score: 6 G Factor: 6 Piotski Score: 4 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 6 and Piotski score of 4.
Description
CJ Gelatine Products Ltd. manufactures Gelatine in India of varying degree, such as Pharmaceutical Gelatine, Edible Gelatine, Technical Gelatine, Photographic Gelatine..etc.Site:507515
Market Cap:
Rs 11.2 cr
Price:
23.2
Trading pe:
9.54x
Book-value:
18.0/share
Div yield:
0.00 %
Earning yield:
10.81%
Face-value:
10.0/share
52week high:
26.95
52week low:
7.26
Technical Analysis
Stock trades at 23.2, above its 50dma 21.15. It also trades above its 200dma 15.52. The stock remains bullish on techicals
The 52 week high is at 26.95 and the 52week low is at 7.26
Price Chart
P/E Chart
Sales and Margin
Strengths
– is expected to give good quarter
-Debtor days have improved from 51.03 to 31.62 days.
Weakness
– Though the company is reporting repeated profits, it is not paying out dividend
– has low interest coverage ratio.
– has a low return on equity of 2.90% for last 3 years.
Competition
– The industry trades at a mean P/E of 28.0x. Pidilite Inds. trades at the industry’s max P/E of 95.87x. 507515 trades at a P/E of 9.54x
– Industry’s mean G-Factor is 3.8 while the mean Piotski score is 8.0. 507515 has a G-Factor of 6 and Piotski scoreof 4.
– Average 1 month return for industry is 1.1%. The max 1- month return was given by Godrej Industrie: a return of 7.8 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 10.78 cr compared to Rs 8.23 cr for period ended Mar 2020, a rise of 31.0%
Operating Profits reported at Rs 0.79 cr for period ended Mar 2021 vis-vis 1.26 for period ended Mar 2020 .
Operating Margins contracted -798.1 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 0.12 compared to Rs 0.27 for previous quarter ended Dec 2020 and Rs 1.0 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 39.03 cr for period ended Mar 2021 vis-vis sales of Rs 28.28 cr for the period ended Mar 2020, a healthy growth of 27.5%. The 3 year sales cagr stood at 19.3%.
Operating margins shrank to 4.77% for period ended Mar 2021 vis-vis 5.98% for period ended Mar 2020, contraction of 121.0 bps.
Net Profit reported at Rs 0.35 cr for period ended Mar 2021 vis-vis sales of Rs 0.22 cr for the period ended Mar 2020, rising 37.1%.
Company recorded a healthy Net Profit CAGR of 80.0% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities: Rs 0.0 cr for period ended Mar 2021 vis-vis Rs -6.19 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 3.0% compared to 3.0% over the last 3 Years. – The stock has given a return of 220% on a 1 Year basis vis-vis a return of 38% over the last 3 Years. – The compounded sales growth on a TTM bassis is 19% vis-vis a compounded sales growth of 20% over the last 3 Years. – The compounded profit growth on a TTM basis is 80% vis-vis a compounded profit growth of 28% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Mar 2021 public holding stood at 38.63% vis-vis 38.64% for Dec 2020
Conclusion
– is expected to give good quarter
-Debtor days have improved from 51.03 to 31.62 days. – Though the company is reporting repeated profits, it is not paying out dividend
– has low interest coverage ratio.
– has a low return on equity of 2.90% 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 21.15 and is trading at 23.2 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
