Mehabe score: 4 G Factor: 3 Piotski Score: 6 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 6.
Description
Surana Solar is engaged in the business of manufacturing of Solar Photovoltic (SPV) Modules, generation of Wind Power energy and trading of other solar related products.Site:SURANASOLMain Symbol:SURANASOL
Stock trades at 13.2, above its 50dma 11.51. It also trades above its 200dma 9.65. The stock remains bullish on techicals
The 52 week high is at 14.70 and the 52week low is at 6.10
Price Chart
P/E Chart
Sales and Margin
Strengths
– is almost debt free.
-Stock is trading at 1.20 times its book value
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 -25.41% over past five years.
– has a low return on equity of 0.66% for last 3 years.
-Debtor days have increased from 66.72 to 106.47 days.
Competition
– The industry trades at a mean P/E of 29.2x. Surana Solar trades at the industry’s max P/E of 309.29x. SURANASOL trades at a P/E of 309.0x
– Industry’s mean G-Factor is 3.5 while the mean Piotski score is 7.0. SURANASOL has a G-Factor of 3 and Piotski scoreof 6.
– Average 1 month return for industry is 3.9%. The max 1- month return was given by Crompton Gr. Con: a return of 10.59 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 3.74 cr compared to Rs 3.3 cr for period ended Jun 2020, a rise of 13.3%
Operating Profits reported at Rs 1.36 cr for period ended Jun 2021 vis-vis 1.09 for period ended Jun 2020 .
Operating Margins expanded 333.3 bps for period ended Jun 2021 vis-vis Jun 2020 .
The EPS for Jun 2021 was Rs 0.01 compared to Rs 0.0 for previous quarter ended Mar 2021 and Rs -0.04 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 28.37 cr for period ended TTM vis-vis sales of Rs 27.94 cr for the period ended Mar 2021, a growth of 1.5%. The 3 year sales cagr stood at -6.5%.
Operating margins expanded to 19.84% for period ended TTM vis-vis 19.22% for period ended Mar 2021, expansion of 62.0 bps.
Net Profit reported at Rs 0.51 cr for period ended TTM vis-vis sales of Rs 0.21 cr for the period ended Mar 2021, rising 58.8%.
Company reported a poor Net Profit CAGR of -20.1% 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 stock has given a return of 89% on a 1 Year basis vis-vis a return of 17% over the last 3 Years. – The compounded sales growth on a TTM bassis is -16% vis-vis a compounded sales growth of -11% over the last 3 Years. – The compounded profit growth on a TTM basis is 250% vis-vis a compounded profit growth of -37% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Jun 2021 fii holding stood at 0.0% vis-vis 0.0% for Mar 2021 – Public shareholding has remained largely constant. The Jun 2021 public holding stood at 29.93% vis-vis 29.77% for Mar 2021
Conclusion
– is almost debt free.
-Stock is trading at 1.20 times its book value – 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 -25.41% over past five years.
– has a low return on equity of 0.66% for last 3 years.
-Debtor days have increased from 66.72 to 106.47 days.
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 11.51 and is trading at 13.2 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
