Mehabe score: 3 G Factor: 3 Piotski Score: 3 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 3.
Description
Mafatlal Industries is engaged in textile manufacturing and trading, having its manufacturing units at Nadiad and Navsari.(Source : 201903 Annual Report Page No: 63)Site:500264
Market Cap:
Rs 191 cr
Price:
137.0
Trading pe:
x
Book-value:
335/share
Div yield:
0.00 %
Earning yield:
-11.40%
Face-value:
10.0/share
52week high:
158.90
52week low:
74.00
Technical Analysis
Stock trades at 137.0, above its 50dma 114.87. It also trades above its 200dma 100.1. The stock remains bullish on techicals
The 52 week high is at 158.90 and the 52week low is at 74.00
Price Chart
P/E Chart
Sales and Margin
Strengths
– Stock is trading at 0.41 times its book value
Weakness
– has low interest coverage ratio.
-The company has delivered a poor sales growth of -14.55% over past five years.
– has a low return on equity of -12.24% for last 3 years.
-Contingent liabilities of Rs.63.57 Cr.
-Promoters have pledged 69.87% of their holding.
-Debtor days have increased from 97.80 to 131.21 days.
-‘s cost of borrowing seems high
Competition
– The industry trades at a mean P/E of 24.4x. Lakshmi Mills trades at the industry’s max P/E of 54.54x. 500264 trades at a P/E of x
– Industry’s mean G-Factor is 4.6 while the mean Piotski score is 8.0. 500264 has a G-Factor of 3 and Piotski scoreof 3.
– Average 1 month return for industry is 13.5%. The max 1- month return was given by JCT: a return of 26.22 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 207.32 cr compared to Rs 208.79 cr for period ended Mar 2020, a fall of 0.7%
Company reported negative operating profit of Rs -8.92 cr for period ended Mar 2021. For same period last year, operating profit was -3.05
The EPS for Mar 2021 was Rs -6.41 compared to Rs -20.39 for previous quarter ended Dec 2020 and Rs -2.93 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 603.0 cr for period ended Mar 2021 vis-vis sales of Rs 1006.0 cr for the period ended Mar 2020, a fall of 66.8%. The 3 year sales cagr stood at -19.8%.
Operating margins shrank to -8.0% for period ended Mar 2021 vis-vis -2.0% for period ended Mar 2020, contraction of 600.0 bps.
Net Profit reported at Rs -94.0 cr for period ended Mar 2021 vis-vis sales of Rs -14.0 cr for the period ended Mar 2020, falling 0%.
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The stock has given a return of 59% on a 1 Year basis vis-vis a return of -15% over the last 3 Years. – The compounded sales growth on a TTM bassis is -40% vis-vis a compounded sales growth of -20% over the last 3 Years. – The compounded profit growth on a TTM basis is -147% vis-vis a compounded profit growth of -5% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Mar 2021 public holding stood at 25.57% vis-vis 25.34% for Dec 2020
Conclusion
– Stock is trading at 0.41 times its book value – has low interest coverage ratio.
-The company has delivered a poor sales growth of -14.55% over past five years.
– has a low return on equity of -12.24% for last 3 years.
-Contingent liabilities of Rs.63.57 Cr.
-Promoters have pledged 69.87% of their holding.
-Debtor days have increased from 97.80 to 131.21 days.
-‘s cost of borrowing seems high
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 114.87 and is trading at 137.0 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
