Mehabe score: 3 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
Polson is engaged in business of Manufacturing and selling of Synthetic Organic Tanning Substance for Domestic and Export market.Site:507645
Market Cap:
Rs 165 cr
Price:
13712.0
Trading pe:
19.3x
Book-value:
4,812/share
Div yield:
0.00 %
Earning yield:
7.74%
Face-value:
50.0/share
52week high:
16700.00
52week low:
7330.00
Technical Analysis
Stock trades at 13712.0, above its 50dma 12217.27. It also trades above its 200dma 9923.04. The stock remains bullish on techicals
The 52 week high is at 16700.00 and the 52week low is at 7330.00
Price Chart
P/E Chart
Sales and Margin
Strengths
–
Weakness
– Stock is trading at 2.85 times its book value
-Though the company is reporting repeated profits, it is not paying out dividend
-The company has delivered a poor sales growth of -3.14% over past five years.
-Tax rate seems low
– has a low return on equity of 9.29% for last 3 years.
Competition
– The industry trades at a mean P/E of 24.8x. Atul trades at the industry’s max P/E of 40.42x. 507645 trades at a P/E of 19.3x
– Industry’s mean G-Factor is 4.1 while the mean Piotski score is 7.0. 507645 has a G-Factor of 3 and Piotski scoreof 6.
– Average 1 month return for industry is 16.7%. The max 1- month return was given by Polson: a return of 42.51 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 22.96 cr compared to Rs 21.02 cr for period ended Mar 2020, a rise of 9.2%
Operating Profits reported at Rs 2.39 cr for period ended Mar 2021 vis-vis 3.71 for period ended Mar 2020 .
Operating Margins contracted -724.0 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 132.0 compared to Rs 160.0 for previous quarter ended Dec 2020 and Rs 73.0 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 88.61 cr for period ended Mar 2021 vis-vis sales of Rs 96.7 cr for the period ended Mar 2020, a fall of 9.1%. The 3 year sales cagr stood at -5.7%.
Operating margins expanded to 17.65% for period ended Mar 2021 vis-vis 17.16% for period ended Mar 2020, expansion of 49.0 bps.
Net Profit reported at Rs 8.53 cr for period ended Mar 2021 vis-vis sales of Rs 7.1 cr for the period ended Mar 2020, rising 16.8%.
Company reported a poor Net Profit CAGR of -7.9% 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 had stable/constant Return on Equity (RoE) metric. The RoE on Last Year basis was 9.0% compared to 9.0% over the last 3 Years. – The stock has given a return of 52% on a 1 Year basis vis-vis a return of 3% over the last 3 Years. – The compounded sales growth on a TTM bassis is -8% vis-vis a compounded sales growth of -6% over the last 3 Years. – The compounded profit growth on a TTM basis is 20% vis-vis a compounded profit growth of 4% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Mar 2021 public holding stood at 24.8% vis-vis 24.8% for Dec 2020
Conclusion
– – Stock is trading at 2.85 times its book value
-Though the company is reporting repeated profits, it is not paying out dividend
-The company has delivered a poor sales growth of -3.14% over past five years.
-Tax rate seems low
– has a low return on equity of 9.29% 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 12217.27 and is trading at 13712.0 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
