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
ZF Steering Gear (India) is primarily engaged in the business of production & assembling of steering systems for vehicles, buses and tractors.(Source : 201903 Annual Report Page No: 50)Site:505163Main Symbol:ZFSTEERING
Stock trades at 526.0, above its 50dma 489.98. It also trades above its 200dma 418.48. The stock remains bullish on techicals
The 52 week high is at 575.00 and the 52week low is at 275.00
Price Chart
P/E Chart
Sales and Margin
Strengths
– is almost debt free.
Weakness
– The company has delivered a poor sales growth of -11.98% over past five years.
– has a low return on equity of 5.48% for last 3 years.
-Earnings include an other income of Rs.26.36 Cr.
-Debtor days have increased from 89.58 to 142.10 days.
-Promoter holding has decreased over last 3 years: -6.22%
Competition
– The industry trades at a mean P/E of 33.0x. WABCO India trades at the industry’s max P/E of 130.4x. 505163 trades at a P/E of 53.9x
– Industry’s mean G-Factor is 3.8 while the mean Piotski score is 7.0. 505163 has a G-Factor of 2 and Piotski scoreof 5.
– Average 1 month return for industry is 4.0%. The max 1- month return was given by Minda Industries: a return of 11.6 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 52.47 cr compared to Rs 13.92 cr for period ended Jun 2020, a rise of 276.9%
Company reported operating profit of Rs 5.32 cr for period ended Jun 2021, operating profit margin at 10.1 %.
Operating profit was negative for the same period last year thus company has improved its margins this year
The EPS for Jun 2021 was Rs 4.2 compared to Rs 5.94 for previous quarter ended Mar 2021 and Rs -2.07 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 240.0 cr for period ended TTM vis-vis sales of Rs 201.0 cr for the period ended Mar 2021, a healthy growth of 16.2%. The 3 year sales cagr stood at -18.2%.
Operating margins expanded to 11.0% for period ended TTM vis-vis 9.0% for period ended Mar 2021, expansion of 200.0 bps.
Net Profit reported at Rs 15.0 cr for period ended TTM vis-vis sales of Rs 9.0 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 stock has given a return of 81% 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 -30% vis-vis a compounded sales growth of -23% over the last 3 Years. – The compounded profit growth on a TTM basis is 3261% vis-vis a compounded profit growth of -43% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Jun 2021 public holding stood at 32.56% vis-vis 32.54% for Mar 2021
Conclusion
– is almost debt free. – The company has delivered a poor sales growth of -11.98% over past five years.
– has a low return on equity of 5.48% for last 3 years.
-Earnings include an other income of Rs.26.36 Cr.
-Debtor days have increased from 89.58 to 142.10 days.
-Promoter holding has decreased over last 3 years: -6.22%
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 489.98 and is trading at 526.0 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
