Mehabe score: 4 G Factor: 1 Piotski Score: 5 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 1 and Piotski score of 5.
Description
Mitshi India is engaged in the business of trading in segment of fruits & vegetable products.Site:523782Main Symbol:MITSHI
Stock trades at 16.2, above its 50dma 15.55. However it is trading below its 200dma 19.85. The stock remains weak though short term bullish momentum supports price action. It needs to close above 19.85 for bullish price action to continue
The 52 week high is at 32.90 and the 52week low is at 11.03
Price Chart
P/E Chart
Sales and Margin
Strengths
– has a good return on equity (ROE) track record: 3 Years ROE 39.77%
Weakness
– Though the company is reporting repeated profits, it is not paying out dividend
-Promoter holding is low: 15.57%
– might be capitalizing the interest cost
– has high debtors of 175.98 days.
Competition
– The industry trades at a mean P/E of 49.7x. 3M India trades at the industry’s max P/E of 183.61x. 523782 trades at a P/E of 61.8x
– Industry’s mean G-Factor is 3.6 while the mean Piotski score is 7.0. 523782 has a G-Factor of 1 and Piotski scoreof 5.
– Average 1 month return for industry is 1.0%. The max 1- month return was given by Redington India: a return of 22.24 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 3.62 cr compared to Rs 0.75 cr for period ended Jun 2020, a rise of 382.7%
Company reported operating profit of Rs 0.65 cr for period ended Jun 2021, operating profit margin at 18.0 %.
Operating profit was negative for the same period last year thus company has improved its margins this year
The EPS for Jun 2021 was Rs 0.53 compared to Rs -1.11 for previous quarter ended Mar 2021 and Rs -0.05 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 9.58 cr for period ended TTM vis-vis sales of Rs 6.72 cr for the period ended Mar 2021, a healthy growth of 29.9%. The 3 year sales cagr stood at 23.3%.
Operating margins expanded to 10.86% for period ended TTM vis-vis 5.65% for period ended Mar 2021, expansion of 521.0 bps.
Net Profit reported at Rs 0.73 cr for period ended TTM vis-vis sales of Rs 0.23 cr for the period ended Mar 2021, rising 68.5%.
Company reported a poor Net Profit CAGR of -6.4% over the last 3 years
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 company has worsened on its Return on Equity (RoE) metric. The RoE on Last Year basis was 12.0% compared to 40.0% over the last 3 Years. – The stock has given a return of -45% on a 1 Year basis vis-vis a return of -7% over the last 3 Years. – The compounded sales growth on a TTM bassis is -14% vis-vis a compounded sales growth of 32% over the last 3 Years. – The compounded profit growth on a TTM basis is -60% vis-vis a compounded profit growth of -18% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Mar 2021 public holding stood at 84.42% vis-vis 84.42% for Dec 2020
Conclusion
– has a good return on equity (ROE) track record: 3 Years ROE 39.77% – Though the company is reporting repeated profits, it is not paying out dividend
-Promoter holding is low: 15.57%
– might be capitalizing the interest cost
– has high debtors of 175.98 days.
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 15.55 and is trading at 16.2 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
