Mehabe score: 3 G Factor: 3 Piotski Score: 4 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 4.
Description
Malu Paper Mills Limited is manufactures and sells paper products in India which inculde paper materials for producing corrugated boxes, printing paper and newsprint paper.Site:MALUPAPERMain Symbol:MALUPAPER
Stock trades at 39.9, above its 50dma 35.38. It also trades above its 200dma 30.61. The stock remains bullish on techicals
The 52 week high is at 44.00 and the 52week low is at 22.10
Price Chart
P/E Chart
Sales and Margin
Strengths
–
Weakness
– Stock is trading at 2.83 times its book value
– has low interest coverage ratio.
-The company has delivered a poor sales growth of -5.00% over past five years.
– has a low return on equity of 2.67% for last 3 years.
-Promoters have pledged 72.91% of their holding.
-Debtor days have increased from 47.79 to 69.35 days.
Competition
– The industry trades at a mean P/E of 18.2x. Century Textiles trades at the industry’s max P/E of 278.11x. MALUPAPER trades at a P/E of x
– Industry’s mean G-Factor is 3.9 while the mean Piotski score is 6.0. MALUPAPER has a G-Factor of 3 and Piotski scoreof 4.
– Average 1 month return for industry is 3.7%. The max 1- month return was given by JK Paper: a return of 24.15 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 34.5 cr compared to Rs 23.11 cr for period ended Jun 2020, a rise of 49.3%
Company reported negative operating profit of Rs -0.98 cr for period ended Jun 2021. For same period last year, operating profit was -1.72
The EPS for Jun 2021 was Rs -1.72 compared to Rs 0.79 for previous quarter ended Mar 2021 and Rs -1.89 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 182.0 cr for period ended TTM vis-vis sales of Rs 171.0 cr for the period ended Mar 2021, a growth of 6.0%. The 3 year sales cagr stood at -12.7%.
Net Profit reported at Rs -5.0 cr for period ended TTM vis-vis sales of Rs -6.0 cr for the period ended Mar 2021, rising 0%.
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 worsened on its Return on Equity (RoE) metric. The RoE on Last Year basis was -21.0% compared to 3.0% over the last 3 Years. – The stock has given a return of 44% on a 1 Year basis vis-vis a return of -5% over the last 3 Years. – The compounded sales growth on a TTM bassis is -25% vis-vis a compounded sales growth of -15% over the last 3 Years. – The compounded profit growth on a TTM basis is -974% vis-vis a compounded profit growth of % over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Jun 2021 public holding stood at 30.05% vis-vis 30.05% for Mar 2021
Conclusion
– – Stock is trading at 2.83 times its book value
– has low interest coverage ratio.
-The company has delivered a poor sales growth of -5.00% over past five years.
– has a low return on equity of 2.67% for last 3 years.
-Promoters have pledged 72.91% of their holding.
-Debtor days have increased from 47.79 to 69.35 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 35.38 and is trading at 39.9 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
