Mehabe score: 4 G Factor: 3 Piotski Score: 4 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 4.
Description
Bharat Wire Ropes is engaged in the Business of production of Wire, Wire Ropes, Strands, and Slings.Site:BHARATWIREMain Symbol:BHARATWIRE
Stock trades at 80.9, above its 50dma 67.59. It also trades above its 200dma 47.72. The stock remains bullish on techicals
The 52 week high is at 84.00 and the 52week low is at 19.05
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
-Stock is trading at 1.16 times its book value
Weakness
– has low interest coverage ratio.
-Promoter holding is low: 37.88%
– has a low return on equity of -28.53% for last 3 years.
– might be capitalizing the interest cost
-Promoters have pledged 69.14% of their holding.
Competition
– The industry trades at a mean P/E of 15.9x. Apollo Tricoat trades at the industry’s max P/E of 47.51x. BHARATWIRE trades at a P/E of x
– Industry’s mean G-Factor is 5.8 while the mean Piotski score is 8.0. BHARATWIRE has a G-Factor of 3 and Piotski scoreof 4.
– Average 1 month return for industry is 11.3%. The max 1- month return was given by Godawari Power: a return of 31.6 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 69.0 cr compared to Rs 75.0 cr for period ended Mar 2020, a fall of 8.0%
Operating Profits reported at Rs 7.0 cr for period ended Mar 2021 vis-vis 13.0 for period ended Mar 2020 .
Operating Margins contracted -718.8 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 4.54 compared to Rs -3.03 for previous quarter ended Dec 2020 and Rs -2.69 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 250.0 cr for period ended Mar 2021 vis-vis sales of Rs 258.0 cr for the period ended Mar 2020, a fall of 3.2%. The 3 year sales cagr stood at 14.9%.
Operating margins expanded to 13.0% for period ended Mar 2021 vis-vis 11.0% for period ended Mar 2020, expansion of 200.0 bps.
Net Profit reported at Rs -17.0 cr for period ended Mar 2021 vis-vis sales of Rs -61.0 cr for the period ended Mar 2020, 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 improved its Return on Equity (RoE) metric. The RoE on Last Year basis was -7.0% compared to -29.0% over the last 3 Years. – The stock has given a return of 303% on a 1 Year basis vis-vis a return of -6% over the last 3 Years. – The compounded sales growth on a TTM bassis is -3% vis-vis a compounded sales growth of 15% over the last 3 Years. – The compounded profit growth on a TTM basis is 73% 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 0.87% vis-vis 0.87% for Mar 2021 – Public shareholding has remained largely constant. The Jun 2021 public holding stood at 51.25% vis-vis 51.25% for Mar 2021
Conclusion
– has reduced debt.
-Stock is trading at 1.16 times its book value – has low interest coverage ratio.
-Promoter holding is low: 37.88%
– has a low return on equity of -28.53% for last 3 years.
– might be capitalizing the interest cost
-Promoters have pledged 69.14% of their holding.
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 67.59 and is trading at 80.9 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
