Mehabe score: 6 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
Incorporated in 1988, started its operations in 1992, Lotus Chocolates is in the business of manufacturing chocolates, cocoa products, and cocoa derivatives.
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Since 1992, various molded and panned products under the brand names of “Chuckles”, “On & On”, etc. became popular in South and Central India. #
In 2008, the Puzzolana Group under the leadership of two Hyderabad-based entrepreneurs, Mr.Prakash Pai and Mr.Anantha Pai took over the company as its promoters.Site:523475Main Symbol:LOTUSCHO
Stock trades at 38.1, above its 50dma 27.16. It also trades above its 200dma 21.38. The stock remains bullish on techicals
The 52 week high is at 34.65 and the 52week low is at 13.00
Price Chart
P/E Chart
Sales and Margin
Strengths
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Weakness
– Stock is trading at 27.18 times its book value
-Though the company is reporting repeated profits, it is not paying out dividend
-The company has delivered a poor sales growth of -6.02% over past five years.
– might be capitalizing the interest cost
-Debtor days have increased from 43.90 to 62.97 days.
Competition
– The industry trades at a mean P/E of 51.2x. Hindustan Foods trades at the industry’s max P/E of 109.51x. 523475 trades at a P/E of 27.6x
– Industry’s mean G-Factor is 3.5 while the mean Piotski score is 8.0. 523475 has a G-Factor of 3 and Piotski scoreof 5.
– Average 1 month return for industry is 4.6%. The max 1- month return was given by Lotus Chocolate: a return of 33.92 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 17.43 cr compared to Rs 5.48 cr for period ended Jun 2020, a rise of 218.1%
Operating Profits reported at Rs 1.0 cr for period ended Jun 2021 vis-vis 0.03 for period ended Jun 2020 .
Operating Margins expanded 519.0 bps for period ended Jun 2021 vis-vis Jun 2020 .
The EPS for Jun 2021 was Rs 0.71 compared to Rs 0.58 for previous quarter ended Mar 2021 and Rs -0.08 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 59.9 cr for period ended TTM vis-vis sales of Rs 47.94 cr for the period ended Mar 2021, a healthy growth of 20.0%. The 3 year sales cagr stood at -3.0%.
Operating margins expanded to 5.79% for period ended TTM vis-vis 5.21% for period ended Mar 2021, expansion of 58.0 bps.
Net Profit reported at Rs 2.8 cr for period ended TTM vis-vis sales of Rs 1.77 cr for the period ended Mar 2021, rising 36.8%.
Company recorded a healthy Net Profit CAGR of 28.2% 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 193.0% compared to 0% over the last 3 Years. – The stock has given a return of 171% on a 1 Year basis vis-vis a return of 14% over the last 3 Years. – The compounded sales growth on a TTM bassis is -31% vis-vis a compounded sales growth of -6% over the last 3 Years. – The compounded profit growth on a TTM basis is 101% vis-vis a compounded profit growth of 24% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Jun 2021 public holding stood at 27.93% vis-vis 27.93% for Mar 2021
Conclusion
– – Stock is trading at 27.18 times its book value
-Though the company is reporting repeated profits, it is not paying out dividend
-The company has delivered a poor sales growth of -6.02% over past five years.
– might be capitalizing the interest cost
-Debtor days have increased from 43.90 to 62.97 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 27.16 and is trading at 38.1 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
