Mehabe score: 6 G Factor: 2 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 2 and Piotski score of 7.
Description
Unichem Laboratories is engaged in the business of Pharmaceuticals.Site:UNICHEMLABMain Symbol:UNICHEMLAB
Stock trades at 329.0, above its 50dma 328.23. It also trades above its 200dma 293.2. The stock remains bullish on techicals
The 52 week high is at 375.00 and the 52week low is at 174.25
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
– is almost debt free.
-Stock is trading at 0.91 times its book value
-Debtor days have improved from 108.82 to 73.96 days.
Weakness
– The company has delivered a poor sales growth of -1.51% over past five years.
– has a low return on equity of -1.20% for last 3 years.
-Earnings include an other income of Rs.50.19 Cr.
Competition
– The industry trades at a mean P/E of 31.0x. Unichem Labs. trades at the industry’s max P/E of 67.43x. UNICHEMLAB trades at a P/E of 67.4x
– Industry’s mean G-Factor is 2.1 while the mean Piotski score is 8.0. UNICHEMLAB has a G-Factor of 2 and Piotski scoreof 7.
– Average 1 month return for industry is 5.7%. The max 1- month return was given by Piramal Enterp.: a return of 24.72 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 274.12 cr compared to Rs 290.2 cr for period ended Mar 2020, a fall of 5.5%
Operating Profits reported at Rs 18.81 cr for period ended Mar 2021 vis-vis 13.35 for period ended Mar 2020 .
Operating Margins expanded 226.2 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs -0.06 compared to Rs 3.35 for previous quarter ended Dec 2020 and Rs -2.44 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 1235.0 cr for period ended Mar 2021 vis-vis sales of Rs 1211.0 cr for the period ended Mar 2020, a growth of 1.9%. The 3 year sales cagr stood at 14.9%.
Operating margins expanded to 7.0% for period ended Mar 2021 vis-vis -4.0% for period ended Mar 2020, expansion of 1100.0 bps.
Net Profit reported at Rs 34.0 cr for period ended Mar 2021 vis-vis sales of Rs -60.0 cr for the period ended Mar 2020, rising 276.5%.
Company reported a poor Net Profit CAGR of -76.3% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 33.0 cr for period ended Mar 2021 vis-vis Rs 20.0 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 1.0% compared to -1.0% over the last 3 Years. – The stock has given a return of 73% on a 1 Year basis vis-vis a return of 10% over the last 3 Years. – The compounded sales growth on a TTM bassis is 2% vis-vis a compounded sales growth of 15% over the last 3 Years. – The compounded profit growth on a TTM basis is 140% vis-vis a compounded profit growth of -76% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2021 fii holding stood at 1.5% vis-vis 1.55% for Dec 2020 – Public shareholding has remained largely constant. The Mar 2021 public holding stood at 38.62% vis-vis 38.44% for Dec 2020
Conclusion
– has reduced debt.
– is almost debt free.
-Stock is trading at 0.91 times its book value
-Debtor days have improved from 108.82 to 73.96 days. – The company has delivered a poor sales growth of -1.51% over past five years.
– has a low return on equity of -1.20% for last 3 years.
-Earnings include an other income of Rs.50.19 Cr.
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 328.23 and is trading at 329.0 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
