Mehabe score: 2 G Factor: 2 Piotski Score: 4 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 4.
Description
ISMT is engaged in the business of Seamless Tube & Hollow, Steel.(Source : 201903 Annual Report Page No: 18)Site:ISMTLTDMain Symbol:ISMTLTD
Stock trades at 29.0, above its 50dma 20.27. It also trades above its 200dma 13.53. The stock remains bullish on techicals
The 52 week high is at 32.45 and the 52week low is at 4.20
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
Weakness
– has low interest coverage ratio.
-The company has delivered a poor sales growth of 4.29% over past five years.
-Contingent liabilities of Rs.267.21 Cr.
-Debtor days have increased from 61.24 to 79.86 days.
-‘s cost of borrowing seems high
Competition
– The industry trades at a mean P/E of 14.4x. Apollo Tricoat trades at the industry’s max P/E of 42.4x. ISMTLTD trades at a P/E of x
– Industry’s mean G-Factor is 5.8 while the mean Piotski score is 8.0. ISMTLTD has a G-Factor of 2 and Piotski scoreof 4.
– Average 1 month return for industry is 11.3%. The max 1- month return was given by ISMT: a return of 71.09 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 459.0 cr compared to Rs 276.0 cr for period ended Mar 2020, a rise of 66.3%
Company reported negative operating profit of Rs -58.0 cr for period ended Mar 2021. For same period last year, operating profit was 5.0
The EPS for Mar 2021 was Rs -7.66 compared to Rs -3.94 for previous quarter ended Dec 2020 and Rs -5.4 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 1252.0 cr for period ended Mar 2021 vis-vis sales of Rs 1325.0 cr for the period ended Mar 2020, a fall of 5.8%. The 3 year sales cagr stood at -7.0%.
Operating margins shrank to -6.0% for period ended Mar 2021 vis-vis 6.0% for period ended Mar 2020, contraction of 1200.0 bps.
Net Profit reported at Rs -343.0 cr for period ended Mar 2021 vis-vis sales of Rs -240.0 cr for the period ended Mar 2020, falling 0%.
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 stock has given a return of 480% on a 1 Year basis vis-vis a return of 65% over the last 3 Years. – The compounded sales growth on a TTM bassis is -6% vis-vis a compounded sales growth of -7% over the last 3 Years. – The compounded profit growth on a TTM basis is -46% vis-vis a compounded profit growth of -17% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2021 fii holding stood at 0.72% vis-vis 0.72% for Dec 2020 – Public shareholding has remained largely constant. The Mar 2021 public holding stood at 46.18% vis-vis 46.18% for Dec 2020
Conclusion
– has reduced debt. – has low interest coverage ratio.
-The company has delivered a poor sales growth of 4.29% over past five years.
-Contingent liabilities of Rs.267.21 Cr.
-Debtor days have increased from 61.24 to 79.86 days.
-‘s cost of borrowing seems high
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 20.27 and is trading at 29.0 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
