Mehabe score: 0 G Factor: 1 Piotski Score: 3 The stock has a rating SELL. 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 1 and Piotski score of 3.
Description
Rungta Irrigation is primarily engaged in the activity of Manufacturing, Designing, Assembling and Marketing of Sprinkler Irrigation systems. The product range of the company includes Sprinklers, Drip Irrigation systems.Site:530449Main Symbol:RUNGTAIR
Stock trades at 20.2, below its 50dma 21.8 and below its 200dma 20.3. The stock remains bearish on technicals
The 52 week high is at 25.30 and the 52week low is at 15.05
Price Chart
P/E Chart
Sales and Margin
Strengths
– Stock is trading at 0.28 times its book value
Weakness
– Though the company is reporting repeated profits, it is not paying out dividend
– has low interest coverage ratio.
-The company has delivered a poor sales growth of -7.04% over past five years.
-Promoter holding is low: 38.27%
– has a low return on equity of 0.76% for last 3 years.
-Earnings include an other income of Rs.3.62 Cr.
– has high debtors of 228.69 days.
Competition
– The industry trades at a mean P/E of 30.2x. Astral trades at the industry’s max P/E of 98.4x. 530449 trades at a P/E of 32.6x
– Industry’s mean G-Factor is 4.0 while the mean Piotski score is 9.0. 530449 has a G-Factor of 1 and Piotski scoreof 3.
– Average 1 month return for industry is 0.1%. The max 1- month return was given by Nilkamal Ltd: a return of 25.26 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 8.52 cr compared to Rs 6.87 cr for period ended Jun 2020, a rise of 24.0%
Company reported negative operating profit of Rs -0.48 cr for period ended Jun 2021. For same period last year, operating profit was -0.33
The EPS for Jun 2021 was Rs 0.14 compared to Rs -0.25 for previous quarter ended Mar 2021 and Rs 0.33 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 46.11 cr for period ended TTM vis-vis sales of Rs 44.45 cr for the period ended Mar 2021, a growth of 3.6%. The 3 year sales cagr stood at -7.2%.
Operating margins shrank to -0.74% for period ended TTM vis-vis -0.45% for period ended Mar 2021, contraction of 29.0 bps.
Net Profit reported at Rs 0.38 cr for period ended TTM vis-vis sales of Rs 0.55 cr for the period ended Mar 2021, falling 44.7%.
Company reported a poor Net Profit CAGR of -13.1% over the last 3 years
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 had stable/constant Return on Equity (RoE) metric. The RoE on Last Year basis was 1.0% compared to 1.0% over the last 3 Years. – The stock has given a return of -20% on a 1 Year basis vis-vis a return of -1% over the last 3 Years. – The compounded sales growth on a TTM bassis is -2% vis-vis a compounded sales growth of -8% over the last 3 Years. – The compounded profit growth on a TTM basis is -24% vis-vis a compounded profit growth of -22% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Jun 2021 public holding stood at 61.17% vis-vis 61.17% for Mar 2021
Conclusion
– Stock is trading at 0.28 times its book value – Though the company is reporting repeated profits, it is not paying out dividend
– has low interest coverage ratio.
-The company has delivered a poor sales growth of -7.04% over past five years.
-Promoter holding is low: 38.27%
– has a low return on equity of 0.76% for last 3 years.
-Earnings include an other income of Rs.3.62 Cr.
– has high debtors of 228.69 days.
Fundamentally, the stock remains weak. The business fundamentals are on shaky ground. Weak near term results have dampened and questioned business drivers. We suggest to wait for a upturn in business performance.
Technically, the stock reflects the poor fundamentals. The stock remains below its 50 DMA 21.8 and is trading at 20.2. It has shown near term lack of bullish momentum. We suggest to observe price action. However as investors, who like to avoid timing the markets, we suggest to avoid the stock
