Mehabe score: 4 G Factor: 3 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 3 and Piotski score of 5.
Description
Avadh Sugar & Energy is primarily engaged in the business of manufacture and sale of sugar and its by-products (molasses, bagasse and press-mud), spirits including ethanol and power.Site:AVADHSUGARMain Symbol:AVADHSUGAR
Stock trades at 496.0, above its 50dma 420.26. It also trades above its 200dma 294.07. The stock remains bullish on techicals
The 52 week high is at 548.55 and the 52week low is at 155.00
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
– has a good return on equity (ROE) track record: 3 Years ROE 17.04%
Weakness
– has low interest coverage ratio.
Competition
– The industry trades at a mean P/E of 15.0x. Balrampur Chini trades at the industry’s max P/E of 16.69x. AVADHSUGAR trades at a P/E of 12.8x
– Industry’s mean G-Factor is 3.9 while the mean Piotski score is 8.0. AVADHSUGAR has a G-Factor of 3 and Piotski scoreof 5.
– Average 1 month return for industry is -3.0%. The max 1- month return was given by Balrampur Chini: a return of 7.0 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 831.0 cr compared to Rs 773.0 cr for period ended Mar 2020, a rise of 7.5%
Operating Profits reported at Rs 107.0 cr for period ended Mar 2021 vis-vis 95.0 for period ended Mar 2020 .
Operating Margins expanded 58.6 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 28.27 compared to Rs 1.86 for previous quarter ended Dec 2020 and Rs 30.22 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 2711.0 cr for period ended Mar 2021 vis-vis sales of Rs 2559.0 cr for the period ended Mar 2020, a growth of 5.6%. The 3 year sales cagr stood at 5.1%.
Net Profit reported at Rs 78.0 cr for period ended Mar 2021 vis-vis sales of Rs 89.0 cr for the period ended Mar 2020, falling 14.1%.
Company reported a poor Net Profit CAGR of -3.9% 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 465.0 cr for period ended Mar 2021 vis-vis Rs 185.0 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 worsened on its Return on Equity (RoE) metric. The RoE on Last Year basis was 12.0% compared to 17.0% over the last 3 Years. – The stock has given a return of 197% on a 1 Year basis vis-vis a return of 43% over the last 3 Years. – The compounded sales growth on a TTM bassis is 6% vis-vis a compounded sales growth of 5% over the last 3 Years. – The compounded profit growth on a TTM basis is -13% vis-vis a compounded profit growth of -4% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Jun 2021 fii holding stood at 0.58% vis-vis 0.0% for Mar 2021 – Public shareholding has remained largely constant. The Jun 2021 public holding stood at 38.75% vis-vis 39.33% for Mar 2021
Conclusion
– has reduced debt.
– has a good return on equity (ROE) track record: 3 Years ROE 17.04% – has low interest coverage ratio.
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 420.26 and is trading at 496.0 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
