Mehabe score: 4 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
Steelcast is engaged in the Business of Steel casting. Catering to OEMs for Industry sectors like Earth Moving, Mining & Mineral Processing, Steel Plants, Cement, Thermal & Hydro Power, Valves & Pumps, Electro Locomotive, Aerobridge, Oil Field, Shipping and General Engineering.Site:513517Main Symbol:STEELCAS
Stock trades at 183.0, above its 50dma 162.38. It also trades above its 200dma 137.84. The stock remains bullish on techicals
The 52 week high is at 193.00 and the 52week low is at 80.00
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
– has been maintaining a healthy dividend payout of 18.05%
-Promoter holding has increased by 1.98% over last quarter.
Weakness
– The company has delivered a poor sales growth of 2.85% over past five years.
– has a low return on equity of 12.80% for last 3 years.
-Debtor days have increased from 78.48 to 118.87 days.
Competition
– The industry trades at a mean P/E of 43.2x. Bharat Forge trades at the industry’s max P/E of 485.72x. 513517 trades at a P/E of 31.6x
– Industry’s mean G-Factor is 2.6 while the mean Piotski score is 8.0. 513517 has a G-Factor of 3 and Piotski scoreof 7.
– Average 1 month return for industry is 11.8%. The max 1- month return was given by M M Forgings: a return of 28.14 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 55.48 cr compared to Rs 32.71 cr for period ended Mar 2020, a rise of 69.6%
Operating Profits reported at Rs 11.06 cr for period ended Mar 2021 vis-vis 2.64 for period ended Mar 2020 .
Operating Margins expanded 1186.4 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 2.19 compared to Rs 1.87 for previous quarter ended Dec 2020 and Rs -1.07 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 158.0 cr for period ended Mar 2021 vis-vis sales of Rs 201.0 cr for the period ended Mar 2020, a fall of 27.2%. The 3 year sales cagr stood at -11.9%.
Operating margins expanded to 20.0% for period ended Mar 2021 vis-vis 19.0% for period ended Mar 2020, expansion of 100.0 bps.
Net Profit reported at Rs 12.0 cr for period ended Mar 2021 vis-vis sales of Rs 8.0 cr for the period ended Mar 2020, rising 33.3%.
Company reported a poor Net Profit CAGR of -17.0% 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 worsened on its Return on Equity (RoE) metric. The RoE on Last Year basis was 9.0% compared to 13.0% over the last 3 Years. – The stock has given a return of 99% on a 1 Year basis vis-vis a return of 2% over the last 3 Years. – The compounded sales growth on a TTM bassis is -21% vis-vis a compounded sales growth of -12% over the last 3 Years. – The compounded profit growth on a TTM basis is 48% vis-vis a compounded profit growth of -18% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Jun 2021 fii holding stood at 0.02% vis-vis 0.02% for Mar 2021 – Public shareholding has remained largely constant. The Jun 2021 public holding stood at 52.53% vis-vis 54.5% for Mar 2021
Conclusion
– has reduced debt.
– has been maintaining a healthy dividend payout of 18.05%
-Promoter holding has increased by 1.98% over last quarter. – The company has delivered a poor sales growth of 2.85% over past five years.
– has a low return on equity of 12.80% for last 3 years.
-Debtor days have increased from 78.48 to 118.87 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 162.38 and is trading at 183.0 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
