Mehabe score: 1 G Factor: 3 Piotski Score: 7 The stock has a rating SELL. 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 7.
Description
Omkar Speciality Chemicals is one of the leading global specialty chemicals company with a strong focus on process innovation to develop high quality customised products. The Company manufactures a range of Organic, Inorganic and Organic Inorganic Intermediaries and pioneer in manufacturer of many niche products in India.Site:OMKARCHEM
Market Cap:
Rs 18.3 cr
Price:
8.9
Trading pe:
x
Book-value:
-76.9/share
Div yield:
0.00 %
Earning yield:
0.71%
Face-value:
10.0/share
52week high:
13.42
52week low:
3.80
Technical Analysis
Stock trades at 8.9, below its 50dma 9.38. However it is trading above its 200dma 7.69. The stock remains weak in the short term due to near term bearish momentum. However overall bullish structure remains intact. Price action will further build up as it moves above its dma50, currently situated at 9.38.
The 52 week high is at 13.42 and the 52week low is at 3.80
Price Chart
P/E Chart
Sales and Margin
Strengths
–
Weakness
– has low interest coverage ratio.
-The company has delivered a poor sales growth of -32.38% over past five years.
-Promoter holding is low: 27.62%
-Contingent liabilities of Rs.64.63 Cr.
-Promoters have pledged 76.94% of their holding.
-Earnings include an other income of Rs.4.90 Cr.
-Debtor days have increased from 71.83 to 111.07 days.
Competition
– The industry trades at a mean P/E of 7.6x. Gravita India trades at the industry’s max P/E of 16.71x. OMKARCHEM trades at a P/E of x
– Industry’s mean G-Factor is 2.7 while the mean Piotski score is 9.0. OMKARCHEM has a G-Factor of 3 and Piotski scoreof 7.
– Average 1 month return for industry is 11.5%. The max 1- month return was given by Halder Venture: a return of 54.13 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 10.97 cr compared to Rs 12.79 cr for period ended Mar 2020, a fall of 14.2%
Company reported operating profit of Rs 0.19 cr for period ended Mar 2021, operating profit margin at 1.7 %.
Operating profit was negative for the same period last year thus company has improved its margins this year
The EPS for Mar 2021 was Rs 1.25 compared to Rs 0.3 for previous quarter ended Dec 2020 and Rs -2.63 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 45.12 cr for period ended Mar 2021 vis-vis sales of Rs 56.61 cr for the period ended Mar 2020, a fall of 25.5%. The 3 year sales cagr stood at -38.9%.
Operating margins expanded to 16.36% for period ended Mar 2021 vis-vis -0.44% for period ended Mar 2020, expansion of 1680.0 bps.
Net Profit reported at Rs 2.01 cr for period ended Mar 2021 vis-vis sales of Rs -14.63 cr for the period ended Mar 2020, rising 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 stock has given a return of 52% on a 1 Year basis vis-vis a return of -20% over the last 3 Years. – The compounded sales growth on a TTM bassis is -20% vis-vis a compounded sales growth of -39% over the last 3 Years. – The compounded profit growth on a TTM basis is 94% vis-vis a compounded profit growth of 26% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Mar 2021 public holding stood at 72.38% vis-vis 72.38% for Dec 2020
Conclusion
– – has low interest coverage ratio.
-The company has delivered a poor sales growth of -32.38% over past five years.
-Promoter holding is low: 27.62%
-Contingent liabilities of Rs.64.63 Cr.
-Promoters have pledged 76.94% of their holding.
-Earnings include an other income of Rs.4.90 Cr.
-Debtor days have increased from 71.83 to 111.07 days.
Fundamentally, the stock remains weak. The business fundamentals are on shaky ground. Weak near term results have dampened and questioned business drivers. We suggest to wait for a upturn in business performance.
Technically, the stock reflects the poor fundamentals. The stock remains below its 50 DMA 9.38 and is trading at 8.9. It has shown near term lack of bullish momentum. We suggest to observe price action. However as investors, who like to avoid timing the markets, we suggest to avoid the stock
