Mehabe score: 7 G Factor: 3 Piotski Score: 7 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 7.
Description
Source Natural Foods and Herbal Supplements Limited is an India-based manufacturer of a range of ayurvedic, health and dietary supplements, and food products.Site:531398Main Symbol:SOURCENTRL
Stock trades at 163.0, above its 50dma 162.16. It also trades above its 200dma 146.4. The stock remains bullish on techicals
The 52 week high is at 224.90 and the 52week low is at 63.65
Price Chart
P/E Chart
Sales and Margin
Strengths
– is almost debt free.
-Debtor days have improved from 121.71 to 87.88 days.
Weakness
– Stock is trading at 7.97 times its book value
-Though the company is reporting repeated profits, it is not paying out dividend
Competition
– The industry trades at a mean P/E of 31.3x. Sun Pharma.Inds. trades at the industry’s max P/E of 56.43x. 531398 trades at a P/E of 30.9x
– Industry’s mean G-Factor is 2.1 while the mean Piotski score is 9.0. 531398 has a G-Factor of 3 and Piotski scoreof 7.
– Average 1 month return for industry is -0.2%. The max 1- month return was given by Piramal Enterp.: a return of 2.72 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 4.41 cr compared to Rs 3.78 cr for period ended Mar 2020, a rise of 16.7%
Operating Profits reported at Rs 0.15 cr for period ended Mar 2021 vis-vis 0.43 for period ended Mar 2020 .
Operating Margins contracted -797.4 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 0.16 compared to Rs 2.24 for previous quarter ended Dec 2020 and Rs 0.82 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 24.88 cr for period ended Mar 2021 vis-vis sales of Rs 13.59 cr for the period ended Mar 2020, a healthy growth of 45.4%. The 3 year sales cagr stood at 31.9%.
Operating margins shrank to 16.76% for period ended Mar 2021 vis-vis 17.59% for period ended Mar 2020, contraction of 83.0 bps.
Net Profit reported at Rs 3.39 cr for period ended Mar 2021 vis-vis sales of Rs 1.64 cr for the period ended Mar 2020, rising 51.6%.
Company recorded a healthy Net Profit CAGR of 61.8% 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 4.46 cr for period ended Mar 2021 vis-vis Rs -0.36 cr for period ended Mar 2020
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 30.0% compared to 21.0% over the last 3 Years. – The stock has given a return of 149% on a 1 Year basis vis-vis a return of 32% over the last 3 Years. – The compounded sales growth on a TTM bassis is 83% vis-vis a compounded sales growth of 32% over the last 3 Years. – The compounded profit growth on a TTM basis is 107% vis-vis a compounded profit growth of 62% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Mar 2021 public holding stood at 25.63% vis-vis 25.63% for Dec 2020
Conclusion
– is almost debt free.
-Debtor days have improved from 121.71 to 87.88 days. – Stock is trading at 7.97 times its book value
-Though the company is reporting repeated profits, it is not paying out dividend
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 162.16 and is trading at 163.0 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
