Mehabe score: 4 G Factor: 3 Piotski Score: 2 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 2.
Description
Automobile Corporation of Goa Ltd. was the first major engineering unit to be set up in Goa, it was jointly promoted in 1980 by Tata Motors Ltd, and EDC Ltd. The company manufactures Sheet metal components, assemblies and bus coaches at its factories. The co. is supplier of pressings and assemblies to Tata Motors’ Pune factory. The Company is engaged in the business of manufacture and sale of sheet metal fabricated parts having automobile application to Tata Cummins Private Limited.
Main Points
Business segments FY20
Bus Body Segment (80%): Revenue from product sales in the Bus Segment reduced by 13% in FY20 due to subdued economic conditions in domestic and export markets, BS-VI transition, etc.
Capacity utilization drives the profitability in this segment.
The revenue from the pressing segment decreased by 47% in FY20 compared to FY19 due to lower capacity utilization due to decrease in the volumes from Tata Motors and Tata Cummins.Site:505036Main Symbol:ACGL
Stock trades at 455.0, above its 50dma 419.19. It also trades above its 200dma 406.42. The stock remains bullish on techicals
The 52 week high is at 545.30 and the 52week low is at 300.10
Price Chart
P/E Chart
Sales and Margin
Strengths
– is almost debt free.
Weakness
– has low interest coverage ratio.
-The company has delivered a poor sales growth of -22.62% over past five years.
– has a low return on equity of 3.75% for last 3 years.
-Debtor days have increased from 62.49 to 75.27 days.
Competition
– The industry trades at a mean P/E of 32.7x. WABCO India trades at the industry’s max P/E of 131.2x. 505036 trades at a P/E of x
– Industry’s mean G-Factor is 3.9 while the mean Piotski score is 7.0. 505036 has a G-Factor of 3 and Piotski scoreof 2.
– Average 1 month return for industry is 2.7%. The max 1- month return was given by Auto.Corp.of Goa: a return of 13.62 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 38.19 cr compared to Rs 9.46 cr for period ended Jun 2020, a rise of 303.7%
Company reported negative operating profit of Rs -5.32 cr for period ended Jun 2021. For same period last year, operating profit was -8.69
The EPS for Jun 2021 was Rs -5.55 compared to Rs -4.47 for previous quarter ended Mar 2021 and Rs -11.32 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 144.0 cr for period ended TTM vis-vis sales of Rs 116.0 cr for the period ended Mar 2021, a healthy growth of 19.4%. The 3 year sales cagr stood at -30.3%.
Operating margins expanded to -13.0% for period ended TTM vis-vis -19.0% for period ended Mar 2021, expansion of 600.0 bps.
Net Profit reported at Rs -9.0 cr for period ended TTM vis-vis sales of Rs -13.0 cr for the period ended Mar 2021, rising 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 -7.0% compared to 4.0% over the last 3 Years. – The stock has given a return of 44% on a 1 Year basis vis-vis a return of -18% over the last 3 Years. – The compounded sales growth on a TTM bassis is -65% vis-vis a compounded sales growth of -38% over the last 3 Years. – The compounded profit growth on a TTM basis is -215% vis-vis a compounded profit growth of % over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Jun 2021 fii holding stood at 0.09% vis-vis 0.09% for Mar 2021 – Public shareholding has remained largely constant. The Jun 2021 public holding stood at 43.47% vis-vis 43.47% for Mar 2021
Conclusion
– is almost debt free. – has low interest coverage ratio.
-The company has delivered a poor sales growth of -22.62% over past five years.
– has a low return on equity of 3.75% for last 3 years.
-Debtor days have increased from 62.49 to 75.27 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 419.19 and is trading at 455.0 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
