Home Investment Memo: 504080

Investment Memo: 504080

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Our Rating: HOLD

Mehabe score: 5
G Factor: 5
Piotski Score: 6
The stock has a rating 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 5 and Piotski score of 6.

Description

JSL Industries is ISO:9001-2008 recognized company, engaged in the manufacturing of engineering goods.Site: 504080Main Symbol: JSLINDL

Price Chart

Market Cap: Rs 26.8 cr Price: 228.0 Trading pe: 11.2x
Book-value: 231/share Div yield: 0.00 % Earning yield: 13.71%
Face-value: 10.0/share 52week high: 229.30 52week low: 67.00

Technical Analysis

  • Stock trades at 228.0, above its 50dma 167.67. It also trades above its 200dma 134.04. The stock remains bullish on techicals
  • The 52 week high is at 229.30 and the 52week low is at 67.00

Price Chart

P/E Chart

Sales and Margin

Strengths

– is almost debt free.
-Stock is trading at 0.99 times its book value
-Debtor days have improved from 29.92 to 21.02 days.

Weakness

– Though the company is reporting repeated profits, it is not paying out dividend
-The company has delivered a poor sales growth of 0.80% over past five years.
– has a low return on equity of 3.69% for last 3 years.
-Contingent liabilities of Rs.8.62 Cr.

Competition

– The industry trades at a mean P/E of 31.3x. A B B trades at the industry’s max P/E of 120.24x. 504080 trades at a P/E of 11.2x
– Industry’s mean G-Factor is 3.6 while the mean Piotski score is 7.0. 504080 has a G-Factor of 5 and Piotski scoreof 6.
– Average 1 month return for industry is 5.7%. The max 1- month return was given by JSL Industries: a return of 41.83 %

Quarterly Results

  • Sales for period ended Jun 2021 is Rs 11.75 cr compared to Rs 8.54 cr for period ended Jun 2020, a rise of 37.6%
  • Operating Profits reported at Rs 0.43 cr for period ended Jun 2021 vis-vis 0.75 for period ended Jun 2020 .
  • Operating Margins contracted -512.3 bps for period ended Jun 2021 vis-vis Jun 2020 .
  • The EPS for Jun 2021 was Rs 3.32 compared to Rs 0.77 for previous quarter ended Mar 2021 and Rs 3.41 for Jun 2020

Profit & Loss Statement

Profit&Loss Comments

  • Company reported sales of Rs 52.88 cr for period ended TTM vis-vis sales of Rs 49.67 cr for the period ended Mar 2021, a growth of 6.1%. The 3 year sales cagr stood at -1.2%.
  • Operating margins shrank to 8.26% for period ended TTM vis-vis 9.44% for period ended Mar 2021, contraction of 118.0 bps.
  • Net Profit reported at Rs 2.39 cr for period ended TTM vis-vis sales of Rs 2.4 cr for the period ended Mar 2021, falling 0.4%.
  • Company recorded a healthy Net Profit CAGR of 95.5% 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 1.25 cr for period ended Mar 2021 vis-vis Rs -2.27 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 improved its Return on Equity (RoE) metric. The RoE on Last Year basis was 9.0% compared to 4.0% over the last 3 Years.
– The stock has given a return of 191% on a 1 Year basis vis-vis a return of 18% over the last 3 Years.
– The compounded sales growth on a TTM bassis is 3% vis-vis a compounded sales growth of 2% over the last 3 Years.
– The compounded profit growth on a TTM basis is 674% vis-vis a compounded profit growth of 129% over the last 3 Years.

Ratios

Shareholding Pattern

– Public shareholding has remained largely constant. The Jun 2021 public holding stood at 46.69% vis-vis 46.69% for Mar 2021

Conclusion

– is almost debt free.
-Stock is trading at 0.99 times its book value
-Debtor days have improved from 29.92 to 21.02 days. – Though the company is reporting repeated profits, it is not paying out dividend
-The company has delivered a poor sales growth of 0.80% over past five years.
– has a low return on equity of 3.69% for last 3 years.
-Contingent liabilities of Rs.8.62 Cr.

  • The business fundamentals of the stock remain stable. Stronger near term results will build interest in the stock. We suggest to wait for a upturn in business performance.
  • Technically, the stock remains above its 50 DMA 167.67 and is trading at 228.0, thus bullish price action wise.
  • Thus, overall we retain a HOLD on the stock.

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