Mehabe score: 1 G Factor: 5 Piotski Score: 5 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 5 and Piotski score of 5.
Description
Prakash Industries is engaged primarily in the business of manufacture and sale of Steel Products and generation of Power. The Company has its manufacturing facilities in India and sells products in India.Site:PRAKASHMain Symbol:PRAKASH
Stock trades at 75.8, below its 50dma 78.61. However it is trading above its 200dma 65.44. 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 78.61.
The 52 week high is at 104.75 and the 52week low is at 31.25
Price Chart
P/E Chart
Sales and Margin
Strengths
– Stock is trading at 0.47 times its book value
Weakness
– Though the company is reporting repeated profits, it is not paying out dividend
-Promoter holding has decreased over last quarter: -1.06%
-The company has delivered a poor sales growth of 9.39% over past five years.
-Tax rate seems low
– has a low return on equity of 9.00% for last 3 years.
-Promoters have pledged 54.78% of their holding.
-Dividend payout has been low at 1.21% of profits over last 3 years
Competition
– The industry trades at a mean P/E of 15.0x. Apollo Tricoat trades at the industry’s max P/E of 44.56x. PRAKASH trades at a P/E of 14.2x
– Industry’s mean G-Factor is 5.4 while the mean Piotski score is 8.0. PRAKASH has a G-Factor of 5 and Piotski scoreof 5.
– Average 1 month return for industry is 10.4%. The max 1- month return was given by Godawari Power: a return of 42.64 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 1032.0 cr compared to Rs 647.0 cr for period ended Mar 2020, a rise of 59.5%
Operating Profits reported at Rs 104.0 cr for period ended Mar 2021 vis-vis 80.0 for period ended Mar 2020 .
Operating Margins contracted -228.7 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 2.88 compared to Rs 1.83 for previous quarter ended Dec 2020 and Rs 1.06 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 3216.0 cr for period ended Mar 2021 vis-vis sales of Rs 2974.0 cr for the period ended Mar 2020, a growth of 7.5%. The 3 year sales cagr stood at 3.1%.
Operating margins shrank to 10.0% for period ended Mar 2021 vis-vis 11.0% for period ended Mar 2020, contraction of 100.0 bps.
Net Profit reported at Rs 95.0 cr for period ended Mar 2021 vis-vis sales of Rs 118.0 cr for the period ended Mar 2020, falling 24.2%.
Company reported a poor Net Profit CAGR of -37.3% 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 worsened on its Return on Equity (RoE) metric. The RoE on Last Year basis was 3.0% compared to 9.0% over the last 3 Years. – The stock has given a return of 113% on a 1 Year basis vis-vis a return of -18% over the last 3 Years. – The compounded sales growth on a TTM bassis is 8% vis-vis a compounded sales growth of 3% over the last 3 Years. – The compounded profit growth on a TTM basis is -19% vis-vis a compounded profit growth of -37% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2021 fii holding stood at 2.84% vis-vis 3.23% for Dec 2020 – Public shareholding has remained largely constant. The Mar 2021 public holding stood at 56.16% vis-vis 54.7% for Dec 2020
Conclusion
– Stock is trading at 0.47 times its book value – Though the company is reporting repeated profits, it is not paying out dividend
-Promoter holding has decreased over last quarter: -1.06%
-The company has delivered a poor sales growth of 9.39% over past five years.
-Tax rate seems low
– has a low return on equity of 9.00% for last 3 years.
-Promoters have pledged 54.78% of their holding.
-Dividend payout has been low at 1.21% of profits over last 3 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 below its 50 DMA 78.61 and is trading at 75.8. Shows a near term lack of buying interest.
