Mehabe score: 4 G Factor: 3 Piotski Score: 3 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 3.
Description
Lykis Limited is a home and personal care company. The Company’s principal products include toiletry, perfumery, cosmetics, confectionary and biscuits.Site:530689Main Symbol:LYKISLTD
Stock trades at 38.9, above its 50dma 33.89. It also trades above its 200dma 29.42. The stock remains bullish on techicals
The 52 week high is at 45.15 and the 52week low is at 18.60
Price Chart
P/E Chart
Sales and Margin
Strengths
– is expected to give good quarter
-Promoter holding has increased by 9.98% over last quarter.
Weakness
– Stock is trading at 7.84 times its book value
– has low interest coverage ratio.
-The company has delivered a poor sales growth of -9.92% over past five years.
– has a low return on equity of -20.87% for last 3 years.
– might be capitalizing the interest cost
-Debtor days have increased from 66.95 to 113.96 days.
Competition
– The industry trades at a mean P/E of 44.9x. Dabur India trades at the industry’s max P/E of 60.69x. 530689 trades at a P/E of x
– Industry’s mean G-Factor is 4.0 while the mean Piotski score is 9.0. 530689 has a G-Factor of 3 and Piotski scoreof 3.
– Average 1 month return for industry is 13.1%. The max 1- month return was given by Kaya Ltd: a return of 50.32 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 63.27 cr compared to Rs 5.24 cr for period ended Jun 2020, a rise of 1107.4%
Company reported operating profit of Rs 0.44 cr for period ended Jun 2021, operating profit margin at 0.7 %.
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 1.27 compared to Rs 1.17 for previous quarter ended Mar 2021 and Rs -3.17 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 121.0 cr for period ended TTM vis-vis sales of Rs 63.0 cr for the period ended Mar 2021, a healthy growth of 47.9%. The 3 year sales cagr stood at -6.3%.
Operating margins expanded to -2.0% for period ended TTM vis-vis -12.0% for period ended Mar 2021, expansion of 1000.0 bps.
Net Profit reported at Rs 2.0 cr for period ended TTM vis-vis sales of Rs -7.0 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 company has worsened on its Return on Equity (RoE) metric. The RoE on Last Year basis was -52.0% compared to -21.0% over the last 3 Years. – The stock has given a return of 101% on a 1 Year basis vis-vis a return of 7% over the last 3 Years. – The compounded sales growth on a TTM bassis is -28% vis-vis a compounded sales growth of -25% over the last 3 Years. – The compounded profit growth on a TTM basis is -256% vis-vis a compounded profit growth of -50% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has fallen for the period ended Jun 2021. The Jun 2021 public holding stood at 21.04% vis-vis 31.02% for Mar 2021
Conclusion
– is expected to give good quarter
-Promoter holding has increased by 9.98% over last quarter. – Stock is trading at 7.84 times its book value
– has low interest coverage ratio.
-The company has delivered a poor sales growth of -9.92% over past five years.
– has a low return on equity of -20.87% for last 3 years.
– might be capitalizing the interest cost
-Debtor days have increased from 66.95 to 113.96 days.
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 33.89 and is trading at 38.9 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
