Mehabe score: 6 G Factor: 5 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 5 and Piotski score of 7.
Description
Premco Global is engaged in the business of Manufacturing of Woven & Knitted Elastic Tapes.
Main Points
Capacity: #
Premco has a capacity of over 300 million metres per year in knitted and woven tapes.
Specialists in the production of jacquard elastics.
It has 4 manufacturing units in India- Mumbai, Dadra, Palgarh & Vapi and one foreign manufacturing unit in Vietnam.
As of FY20, Dadra & Vietnam units are the biggest contributor to overall sales.Site:530331Main Symbol:PREMCO
Stock trades at 469.0, above its 50dma 402.95. It also trades above its 200dma 288.1. The stock remains bullish on techicals
The 52 week high is at 525.10 and the 52week low is at 63.80
Price Chart
P/E Chart
Sales and Margin
Strengths
– is almost debt free.
– is expected to give good quarter
– has been maintaining a healthy dividend payout of 19.55%
Weakness
– The company has delivered a poor sales growth of 6.24% over past five years.
-Tax rate seems low
– has a low return on equity of 10.17% for last 3 years.
Competition
– The industry trades at a mean P/E of 17.6x. Alok Industries trades at the industry’s max P/E of 501.08x. 530331 trades at a P/E of 10.4x
– Industry’s mean G-Factor is 3.5 while the mean Piotski score is 7.0. 530331 has a G-Factor of 5 and Piotski scoreof 7.
– Average 1 month return for industry is 21.3%. The max 1- month return was given by Vishal Fabrics: a return of 56.82 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 34.71 cr compared to Rs 18.74 cr for period ended Mar 2020, a rise of 85.2%
Operating Profits reported at Rs 9.28 cr for period ended Mar 2021 vis-vis 1.17 for period ended Mar 2020 .
Operating Margins expanded 2049.2 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 16.82 compared to Rs 16.34 for previous quarter ended Dec 2020 and Rs 0.03 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 100.0 cr for period ended Mar 2021 vis-vis sales of Rs 76.0 cr for the period ended Mar 2020, a healthy growth of 24.0%. The 3 year sales cagr stood at 8.6%.
Operating margins expanded to 22.0% for period ended Mar 2021 vis-vis 10.0% for period ended Mar 2020, expansion of 1200.0 bps.
Net Profit reported at Rs 14.0 cr for period ended Mar 2021 vis-vis sales of Rs 5.0 cr for the period ended Mar 2020, rising 64.3%.
Company recorded a healthy Net Profit CAGR of 40.9% 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 improved its Return on Equity (RoE) metric. The RoE on Last Year basis was 19.0% compared to 10.0% over the last 3 Years. – The stock has given a return of 501% on a 1 Year basis vis-vis a return of 28% over the last 3 Years. – The compounded sales growth on a TTM bassis is 30% vis-vis a compounded sales growth of 8% over the last 3 Years. – The compounded profit growth on a TTM basis is 253% vis-vis a compounded profit growth of 54% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2021 fii holding stood at 0.19% vis-vis 0.27% for Dec 2020 – Public shareholding has remained largely constant. The Mar 2021 public holding stood at 30.74% vis-vis 30.66% for Dec 2020
Conclusion
– is almost debt free.
– is expected to give good quarter
– has been maintaining a healthy dividend payout of 19.55% – The company has delivered a poor sales growth of 6.24% over past five years.
-Tax rate seems low
– has a low return on equity of 10.17% for 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 above its 50 DMA 402.95 and is trading at 469.0, thus bullish price action wise.
