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
Rama Paper Mills Limited is a newsprint, duplex board, tissue manufacturing company.Site:500357Main Symbol:RAMAPPR-B
Stock trades at 23.8, above its 50dma 15.82. It also trades above its 200dma 13.19. The stock remains bullish on techicals
The 52 week high is at 22.85 and the 52week low is at 6.06
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
– is almost debt free.
Weakness
– Though the company is reporting repeated profits, it is not paying out dividend
– has low interest coverage ratio.
-The company has delivered a poor sales growth of 0.25% over past five years.
-Promoter holding is low: 20.56%
-Promoters have pledged 100.00% of their holding.
Competition
– The industry trades at a mean P/E of 24.5x. Century Textiles trades at the industry’s max P/E of 68.4x. 500357 trades at a P/E of x
– Industry’s mean G-Factor is 4.0 while the mean Piotski score is 7.0. 500357 has a G-Factor of 2 and Piotski scoreof 4.
– Average 1 month return for industry is 20.1%. The max 1- month return was given by Rama Paper Mills: a return of 65.17 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 33.56 cr compared to Rs 27.57 cr for period ended Mar 2020, a rise of 21.7%
Operating Profits reported at Rs 3.79 cr for period ended Mar 2021 vis-vis 2.46 for period ended Mar 2020 .
Operating Margins expanded 237.0 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 2.09 compared to Rs -0.95 for previous quarter ended Dec 2020 and Rs 0.47 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 91.81 cr for period ended Mar 2021 vis-vis sales of Rs 122.34 cr for the period ended Mar 2020, a fall of 33.3%. The 3 year sales cagr stood at -10.6%.
Operating margins shrank to 4.2% for period ended Mar 2021 vis-vis 5.11% for period ended Mar 2020, contraction of 91.0 bps.
Net Profit reported at Rs -3.3 cr for period ended Mar 2021 vis-vis sales of Rs 2.01 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 company has worsened on its Return on Equity (RoE) metric. The RoE on Last Year basis was -27.0% compared to 0% over the last 3 Years. – The stock has given a return of 173% on a 1 Year basis vis-vis a return of 35% over the last 3 Years. – The compounded sales growth on a TTM bassis is -34% vis-vis a compounded sales growth of 8% over the last 3 Years. – The compounded profit growth on a TTM basis is -88% vis-vis a compounded profit growth of 24% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Mar 2021 public holding stood at 79.35% vis-vis 79.35% for Dec 2020
Conclusion
– has reduced debt.
– is almost debt free. – Though the company is reporting repeated profits, it is not paying out dividend
– has low interest coverage ratio.
-The company has delivered a poor sales growth of 0.25% over past five years.
-Promoter holding is low: 20.56%
-Promoters have pledged 100.00% of their holding.
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 15.82 and is trading at 23.8 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
