Mehabe score: 4 G Factor: 2 Piotski Score: 5 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 2 and Piotski score of 5.
Description
Wires & Fabriks (S.A) in the business of manufacture of Bronze wire cloth then used on fourdrinier paper machines.Site:507817Main Symbol:WIREFABR
Stock trades at 72.4, above its 50dma 64.84. It also trades above its 200dma 60.68. The stock remains bullish on techicals
The 52 week high is at 76.40 and the 52week low is at 39.85
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
-Stock is trading at 0.49 times its book value
Weakness
– has low interest coverage ratio.
-The company has delivered a poor sales growth of -1.27% over past five years.
– has a low return on equity of 2.53% for last 3 years.
– might be capitalizing the interest cost
Competition
– The industry trades at a mean P/E of 24.6x. Wires & Fabriks trades at the industry’s max P/E of 47.13x. 507817 trades at a P/E of 47.1x
– Industry’s mean G-Factor is 3.2 while the mean Piotski score is 8.0. 507817 has a G-Factor of 2 and Piotski scoreof 5.
– Average 1 month return for industry is 11.3%. The max 1- month return was given by Welspun India: a return of 36.76 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 28.44 cr compared to Rs 21.02 cr for period ended Mar 2020, a rise of 35.3%
Operating Profits reported at Rs 2.57 cr for period ended Mar 2021 vis-vis 3.0 for period ended Mar 2020 .
Operating Margins contracted -523.6 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 0.07 compared to Rs 0.56 for previous quarter ended Dec 2020 and Rs 2.94 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 89.24 cr for period ended Mar 2021 vis-vis sales of Rs 95.2 cr for the period ended Mar 2020, a fall of 6.7%. The 3 year sales cagr stood at -3.7%.
Operating margins shrank to 10.61% for period ended Mar 2021 vis-vis 12.74% for period ended Mar 2020, contraction of 213.0 bps.
Net Profit reported at Rs 0.47 cr for period ended Mar 2021 vis-vis sales of Rs 1.59 cr for the period ended Mar 2020, falling 238.3%.
Company reported a poor Net Profit CAGR of -17.6% 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 21.0 cr for period ended Mar 2021 vis-vis Rs 2.54 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 had stable/constant Return on Equity (RoE) metric. The RoE on Last Year basis was 1.0% compared to 3.0% over the last 3 Years. – The stock has given a return of 60% on a 1 Year basis vis-vis a return of -16% over the last 3 Years. – The compounded sales growth on a TTM bassis is -6% vis-vis a compounded sales growth of -4% over the last 3 Years. – The compounded profit growth on a TTM basis is -70% vis-vis a compounded profit growth of -18% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Jun 2021 public holding stood at 25.17% vis-vis 25.17% for Mar 2021
Conclusion
– has reduced debt.
-Stock is trading at 0.49 times its book value – has low interest coverage ratio.
-The company has delivered a poor sales growth of -1.27% over past five years.
– has a low return on equity of 2.53% for last 3 years.
– might be capitalizing the interest cost
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 64.84 and is trading at 72.4 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
