Mehabe score: 2 G Factor: 2 Piotski Score: 7 The stock has a rating SELL. 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 7.
Description
Arfin India is engaged in the business of manufacturing, trading and selling of various non-ferrous metal products and its manufacturing facilities.Site:539151Main Symbol:ARFIN
Stock trades at 69.8, below its 50dma 70.24. However it is trading above its 200dma 61.43. The stock remains weak in the short term due to near term bearish momentum. However overall bullish structure remains intact. Price action will further build up as it moves above its dma50, currently situated at 70.24.
The 52 week high is at 85.70 and the 52week low is at 28.35
Price Chart
P/E Chart
Sales and Margin
Strengths
– is expected to give good quarter
Weakness
– has low interest coverage ratio.
-The company has delivered a poor sales growth of 1.21% over past five years.
– has a low return on equity of -4.85% for last 3 years.
-Debtor days have increased from 42.30 to 51.20 days.
Competition
– The industry trades at a mean P/E of 17.6x. Hindalco Inds. trades at the industry’s max P/E of 27.05x. 539151 trades at a P/E of 21.9x
– Industry’s mean G-Factor is 4.0 while the mean Piotski score is 9.0. 539151 has a G-Factor of 2 and Piotski scoreof 7.
– Average 1 month return for industry is 19.2%. The max 1- month return was given by MMP Industries: a return of 55.86 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 99.29 cr compared to Rs 40.62 cr for period ended Jun 2020, a rise of 144.4%
Operating Profits reported at Rs 5.02 cr for period ended Jun 2021 vis-vis 3.05 for period ended Jun 2020 .
Operating Margins contracted -245.3 bps for period ended Jun 2021 vis-vis Jun 2020 .
The EPS for Jun 2021 was Rs 0.69 compared to Rs 1.05 for previous quarter ended Mar 2021 and Rs 0.03 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 362.0 cr for period ended TTM vis-vis sales of Rs 303.0 cr for the period ended Mar 2021, a healthy growth of 16.3%. The 3 year sales cagr stood at -4.3%.
Net Profit reported at Rs 5.0 cr for period ended TTM vis-vis sales of Rs 4.0 cr for the period ended Mar 2021, rising 20.0%.
Company reported a poor Net Profit CAGR of -10.6% 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 improved its Return on Equity (RoE) metric. The RoE on Last Year basis was 6.0% compared to -5.0% over the last 3 Years. – The stock has given a return of 127% on a 1 Year basis vis-vis a return of -37% over the last 3 Years. – The compounded sales growth on a TTM bassis is 19% vis-vis a compounded sales growth of -17% over the last 3 Years. – The compounded profit growth on a TTM basis is 122% vis-vis a compounded profit growth of -43% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Jun 2021 fii holding stood at 1.78% vis-vis 1.78% for Mar 2021 – Public shareholding has remained largely constant. The Jun 2021 public holding stood at 24.11% vis-vis 24.11% for Mar 2021
Conclusion
– is expected to give good quarter – has low interest coverage ratio.
-The company has delivered a poor sales growth of 1.21% over past five years.
– has a low return on equity of -4.85% for last 3 years.
-Debtor days have increased from 42.30 to 51.20 days.
Fundamentally, the stock remains weak. The business fundamentals are on shaky ground. Weak near term results have dampened and questioned business drivers. We suggest to wait for a upturn in business performance.
Technically, the stock reflects the poor fundamentals. The stock remains below its 50 DMA 70.24 and is trading at 69.8. It has shown near term lack of bullish momentum. We suggest to observe price action. However as investors, who like to avoid timing the markets, we suggest to avoid the stock
