Mehabe score: 5 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
Smruthi Organics is engaged in the manufacture of Active Pharmaceutical ingredients (API’s) i.e. Bulk Drugs and Drug Intermediates unless otherwise stated.Site:540686Main Symbol:SMRUTHIORG
Stock trades at 399.0, above its 50dma 303.55. It also trades above its 200dma 216.96. The stock remains bullish on techicals
The 52 week high is at 399.40 and the 52week low is at 42.03
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
– has delivered good profit growth of 88.44% CAGR over last 5 years
– has a good return on equity (ROE) track record: 3 Years ROE 26.22%
Weakness
– Stock is trading at 7.56 times its book value
-The company has delivered a poor sales growth of 11.39% over past five years.
Competition
– The industry trades at a mean P/E of 22.6x. Sequent Scien. trades at the industry’s max P/E of 70.54x. 540686 trades at a P/E of 26.7x
– Industry’s mean G-Factor is 4.2 while the mean Piotski score is 8.0. 540686 has a G-Factor of 5 and Piotski scoreof 7.
– Average 1 month return for industry is 8.0%. The max 1- month return was given by Smruthi Organic: a return of 27.79 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 30.9 cr compared to Rs 29.35 cr for period ended Jun 2020, a rise of 5.3%
Operating Profits reported at Rs 4.44 cr for period ended Jun 2021 vis-vis 5.65 for period ended Jun 2020 .
Operating Margins contracted -488.1 bps for period ended Jun 2021 vis-vis Jun 2020 .
The EPS for Jun 2021 was Rs 2.21 compared to Rs 2.77 for previous quarter ended Mar 2021 and Rs 2.62 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 128.0 cr for period ended TTM vis-vis sales of Rs 126.0 cr for the period ended Mar 2021, a growth of 1.6%. The 3 year sales cagr stood at -2.2%.
Operating margins shrank to 21.0% for period ended TTM vis-vis 23.0% for period ended Mar 2021, contraction of 200.0 bps.
Net Profit reported at Rs 17.0 cr for period ended TTM vis-vis sales of Rs 17.0 cr for the period ended Mar 2021,
Company recorded a healthy Net Profit CAGR of 34.4% 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 23.0 cr for period ended Mar 2021 vis-vis Rs 21.0 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 33.0% compared to 26.0% over the last 3 Years. – The stock has given a return of 850% on a 1 Year basis vis-vis a return of 125% over the last 3 Years. – The compounded sales growth on a TTM bassis is -3% vis-vis a compounded sales growth of 9% over the last 3 Years. – The compounded profit growth on a TTM basis is 102% vis-vis a compounded profit growth of 94% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Jun 2021 public holding stood at 36.61% vis-vis 36.61% for Mar 2021
Conclusion
– has reduced debt.
– has delivered good profit growth of 88.44% CAGR over last 5 years
– has a good return on equity (ROE) track record: 3 Years ROE 26.22% – Stock is trading at 7.56 times its book value
-The company has delivered a poor sales growth of 11.39% over past five 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 303.55 and is trading at 399.0, thus bullish price action wise.
