Mehabe score: 4 G Factor: 6 Piotski Score: 7 The stock has a rating 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 7.
Description
Menon Bearings is engaged in the business of Bearings, Bushes and Thrust Washers, Aluminium Die Casting Components having applications in Heavy & Light commercial vehicles, Tractors, Construction equipment, Material handling, Stationery, Diesel, Gasoline and CNG engines.
Main Points
Market leader in bearing industry
MBL started its operations way back in 1994 and since then it has acheived various milestones. MBL is one of the leading manufacturers of highly critical moving engine components. #Site:MENONBEMain Symbol:MENONBE
Stock trades at 76.1, above its 50dma 65.56. It also trades above its 200dma 56.38. The stock remains bullish on techicals
The 52 week high is at 78.55 and the 52week low is at 33.00
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
– has been maintaining a healthy dividend payout of 58.37%
Weakness
– The company has delivered a poor sales growth of 5.83% over past five years.
Competition
– The industry trades at a mean P/E of 18.7x. Timken India trades at the industry’s max P/E of 77.22x. MENONBE trades at a P/E of 22.7x
– Industry’s mean G-Factor is 4.4 while the mean Piotski score is 9.0. MENONBE has a G-Factor of 6 and Piotski scoreof 7.
– Average 1 month return for industry is 9.4%. The max 1- month return was given by Austin Engg Co: a return of 21.68 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 46.52 cr compared to Rs 30.3 cr for period ended Mar 2020, a rise of 53.5%
Operating Profits reported at Rs 10.09 cr for period ended Mar 2021 vis-vis 5.87 for period ended Mar 2020 .
Operating Margins expanded 231.7 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 1.15 compared to Rs 1.02 for previous quarter ended Dec 2020 and Rs 0.59 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 148.0 cr for period ended Mar 2021 vis-vis sales of Rs 139.0 cr for the period ended Mar 2020, a growth of 6.1%. The 3 year sales cagr stood at 0.5%.
Operating margins expanded to 22.0% for period ended Mar 2021 vis-vis 21.0% for period ended Mar 2020, expansion of 100.0 bps.
Net Profit reported at Rs 19.0 cr for period ended Mar 2021 vis-vis sales of Rs 14.0 cr for the period ended Mar 2020, rising 26.3%.
Company reported a poor Net Profit CAGR of -3.3% over the last 3 years
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 company has had stable/constant Return on Equity (RoE) metric. The RoE on Last Year basis was 20.0% compared to 22.0% over the last 3 Years. – The stock has given a return of 79% on a 1 Year basis vis-vis a return of -8% over the last 3 Years. – The compounded sales growth on a TTM bassis is 6% vis-vis a compounded sales growth of 1% over the last 3 Years. – The compounded profit growth on a TTM basis is 31% vis-vis a compounded profit growth of -4% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2021 fii holding stood at 2.42% vis-vis 2.07% for Dec 2020 – Public shareholding has remained largely constant. The Mar 2021 public holding stood at 26.33% vis-vis 26.77% for Dec 2020
Conclusion
– has reduced debt.
– has been maintaining a healthy dividend payout of 58.37% – The company has delivered a poor sales growth of 5.83% over past five years.
The business fundamentals of the stock remain stable. Stronger near term results will build interest in the stock. We suggest to wait for a upturn in business performance.
Technically, the stock remains above its 50 DMA 65.56 and is trading at 76.1, thus bullish price action wise.
