Mehabe score: 6 G Factor: 4 Piotski Score: 7 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 4 and Piotski score of 7.
Description
NRB Bearings have pioneered in the manufacturing of needle roller bearings in India since 1965. More than 90% of the vehicles running on Indian roads are running on bearings manufactured by NRB.
Main Points
Pioneer to produce Needle roller bearings
NRB is the first company in India to produce Needle roller bearings. The company has for more than 6 decades been into evolving bearing technology and has offered a wide range of high precision friction solutions for automotive sectors and other mobility applications. #Site:NRBBEARINGMain Symbol:NRBBEARING
Stock trades at 138.0, above its 50dma 134.89. It also trades above its 200dma 114.61. The stock remains bullish on techicals
The 52 week high is at 154.40 and the 52week low is at 66.20
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
– has been maintaining a healthy dividend payout of 18.80%
Weakness
– Stock is trading at 2.58 times its book value
-The company has delivered a poor sales growth of 2.53% over past five years.
– has a low return on equity of 13.27% for last 3 years.
– might be capitalizing the interest cost
Competition
– The industry trades at a mean P/E of 16.3x. Timken India trades at the industry’s max P/E of 78.03x. NRBBEARING trades at a P/E of 24.8x
– Industry’s mean G-Factor is 4.0 while the mean Piotski score is 9.0. NRBBEARING has a G-Factor of 4 and Piotski scoreof 7.
– Average 1 month return for industry is 2.8%. The max 1- month return was given by Galaxy Bearings: a return of 19.8 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 201.0 cr compared to Rs 63.0 cr for period ended Jun 2020, a rise of 219.0%
Company reported operating profit of Rs 27.0 cr for period ended Jun 2021, operating profit margin at 13.4 %.
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 1.68 compared to Rs 3.57 for previous quarter ended Mar 2021 and Rs -1.45 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 901.0 cr for period ended TTM vis-vis sales of Rs 762.0 cr for the period ended Mar 2021, a healthy growth of 15.4%. The 3 year sales cagr stood at -2.3%.
Operating margins expanded to 16.0% for period ended TTM vis-vis 14.0% for period ended Mar 2021, expansion of 200.0 bps.
Net Profit reported at Rs 84.0 cr for period ended TTM vis-vis sales of Rs 54.0 cr for the period ended Mar 2021, rising 35.7%.
Company reported a poor Net Profit CAGR of -8.0% 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 158.0 cr for period ended Mar 2021 vis-vis Rs 102.0 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 had stable/constant Return on Equity (RoE) metric. The RoE on Last Year basis was 11.0% compared to 13.0% over the last 3 Years. – The stock has given a return of 75% on a 1 Year basis vis-vis a return of -9% over the last 3 Years. – The compounded sales growth on a TTM bassis is -2% vis-vis a compounded sales growth of -4% over the last 3 Years. – The compounded profit growth on a TTM basis is 69% vis-vis a compounded profit growth of -16% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has risen for the period ended Jun 2021. The Jun 2021 fii holding stood at 22.67% vis-vis 20.14% for Mar 2021 – Public shareholding has remained largely constant. The Jun 2021 public holding stood at 15.81% vis-vis 16.51% for Mar 2021
Conclusion
– has reduced debt.
– has been maintaining a healthy dividend payout of 18.80% – Stock is trading at 2.58 times its book value
-The company has delivered a poor sales growth of 2.53% over past five years.
– has a low return on equity of 13.27% for last 3 years.
– might be capitalizing the interest cost
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 134.89 and is trading at 138.0, thus bullish price action wise.
