Mehabe score: 2 G Factor: 1 Piotski Score: 5 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 5.
Description
Having started its journey in 1935 , Huhtamaki is India’s leading manufacturer and supplier of sustainable, flexible and innovative solutions in packaging and labelling products.
Main Points
Product portfolio
Huhtamaki Limited offers solutions in the areas of Promotions and security, Digital printing, Specialised pouching, Recyclable, Thermoforms, Tube laminates, Printing cylinders & Labelling solutions. #Site:HUHTAMAKIMain Symbol:HUHTAMAKI
Stock trades at 294.0, below its 50dma 300.81. However it is trading above its 200dma 287.98. The stock remains weak in the short term due to near term bearish momentum. However overall bullish structure remains intact. Price action will further build up as it moves above its dma50, currently situated at 300.81.
The 52 week high is at 352.45 and the 52week low is at 241.00
Price Chart
P/E Chart
Sales and Margin
Strengths
– has been maintaining a healthy dividend payout of 33.97%
Weakness
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Competition
– The industry trades at a mean P/E of 15.6x. Huhtamaki India trades at the industry’s max P/E of 40.58x. HUHTAMAKI trades at a P/E of 40.6x
– Industry’s mean G-Factor is 5.0 while the mean Piotski score is 9.0. HUHTAMAKI has a G-Factor of 1 and Piotski scoreof 5.
– Average 1 month return for industry is 1.5%. The max 1- month return was given by Garware Hi Tech: a return of 16.47 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 662.64 cr compared to Rs 640.79 cr for period ended Jun 2020, a rise of 3.4%
Operating Profits reported at Rs 22.71 cr for period ended Jun 2021 vis-vis 67.49 for period ended Jun 2020 .
Operating Margins contracted -710.5 bps for period ended Jun 2021 vis-vis Jun 2020 .
The EPS for Jun 2021 was Rs -0.46 compared to Rs 2.14 for previous quarter ended Mar 2021 and Rs 3.54 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 2539.0 cr for period ended TTM vis-vis sales of Rs 2463.0 cr for the period ended Dec 2020, a growth of 3.0%. The 3 year sales cagr stood at 2.3%.
Operating margins shrank to 7.0% for period ended TTM vis-vis 10.0% for period ended Dec 2020, contraction of 300.0 bps.
Net Profit reported at Rs 55.0 cr for period ended TTM vis-vis sales of Rs 96.0 cr for the period ended Dec 2020, falling 74.5%.
Company recorded a healthy Net Profit CAGR of 16.3% 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 had stable/constant Return on Equity (RoE) metric. The RoE on Last Year basis was 13.0% compared to 15.0% over the last 3 Years. – The stock has given a return of 19% on a 1 Year basis vis-vis a return of 2% over the last 3 Years. – The compounded sales growth on a TTM bassis is -0% vis-vis a compounded sales growth of 5% over the last 3 Years. – The compounded profit growth on a TTM basis is -65% vis-vis a compounded profit growth of 14% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Jun 2021 fii holding stood at 4.24% vis-vis 4.2% for Mar 2021 – Public shareholding has remained largely constant. The Jun 2021 public holding stood at 26.75% vis-vis 26.48% for Mar 2021
Conclusion
– has been maintaining a healthy dividend payout of 33.97% –
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 300.81 and is trading at 294.0. 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
