Mehabe score: 5 G Factor: 3 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 3 and Piotski score of 5.
Description
Incorporated in 1992, Precision Camshafts Limited is manufacturer and supplier of camshafts in India and globally. It supplies more than 150 varieties of camshafts for passenger vehicles, tractors, light commercial vehicles and locomotive engine applications. #
Main Points
Leader in Camshaft business
The company has a market share of ~70% in the Camshaft industry in India and 9% Global market share.
The co. has an export presence in more than 20 countries.#Site:PRECAMMain Symbol:PRECAM
Stock trades at 85.2, above its 50dma 62.37. It also trades above its 200dma 48.24. The stock remains bullish on techicals
The 52 week high is at 87.90 and the 52week low is at 28.55
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
– has been maintaining a healthy dividend payout of 174.36%
Weakness
– has low interest coverage ratio.
– has a low return on equity of 2.66% for last 3 years.
-Earnings include an other income of Rs.41.00 Cr.
Competition
– The industry trades at a mean P/E of 32.5x. Precision Camshf trades at the industry’s max P/E of 351.7x. PRECAM trades at a P/E of 352.0x
– Industry’s mean G-Factor is 3.9 while the mean Piotski score is 7.0. PRECAM has a G-Factor of 3 and Piotski scoreof 5.
– Average 1 month return for industry is 7.7%. The max 1- month return was given by Precision Camshf: a return of 57.98 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 219.0 cr compared to Rs 179.0 cr for period ended Mar 2020, a rise of 22.3%
Operating Profits reported at Rs 10.0 cr for period ended Mar 2021 vis-vis 27.0 for period ended Mar 2020 .
Operating Margins contracted -1051.8 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs -1.63 compared to Rs 1.18 for previous quarter ended Dec 2020 and Rs -0.42 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 709.0 cr for period ended Mar 2021 vis-vis sales of Rs 746.0 cr for the period ended Mar 2020, a fall of 5.2%. The 3 year sales cagr stood at 19.0%.
Operating margins shrank to 9.0% for period ended Mar 2021 vis-vis 15.0% for period ended Mar 2020, contraction of 600.0 bps.
Net Profit reported at Rs 2.0 cr for period ended Mar 2021 vis-vis sales of Rs 35.0 cr for the period ended Mar 2020, falling 1650.0%.
Company reported a poor Net Profit CAGR of -64.8% 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 120.0 cr for period ended Mar 2021 vis-vis Rs 58.0 cr for period ended Mar 2020
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The stock has given a return of 182% on a 1 Year basis vis-vis a return of -1% over the last 3 Years. – The compounded sales growth on a TTM bassis is -5% vis-vis a compounded sales growth of 19% over the last 3 Years. – The compounded profit growth on a TTM basis is -93% vis-vis a compounded profit growth of -63% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2021 fii holding stood at 0.88% vis-vis 0.88% for Dec 2020 – Public shareholding has remained largely constant. The Mar 2021 public holding stood at 33.75% vis-vis 33.28% for Dec 2020
Conclusion
– has reduced debt.
– has been maintaining a healthy dividend payout of 174.36% – has low interest coverage ratio.
– has a low return on equity of 2.66% for last 3 years.
-Earnings include an other income of Rs.41.00 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 62.37 and is trading at 85.2 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
