Mehabe score: 2 G Factor: 3 Piotski Score: 4 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 3 and Piotski score of 4.
Description
A fully integrated CRAMS player working with global pharmaceutical innovators. We have a global presence with development and manufacturing facilities across Europe, India, and China. We provide end-to-end, integrated, high-value, niche CRAMS offering, right from process research & development to late-stage clinical and commercial manufacturing facilities along with the supply of Active Pharmaceutical Ingredients (API) to innovator pharmaceutical companies.Site:DCALMain Symbol:DCAL
Stock trades at 188.0, below its 50dma 200.84. However it is trading above its 200dma 169.86. 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 200.84.
The 52 week high is at 235.30 and the 52week low is at 102.50
Price Chart
P/E Chart
Sales and Margin
Strengths
– is almost debt free.
-Stock is trading at 0.63 times its book value
Weakness
– has low interest coverage ratio.
– has a low return on equity of -0.95% for last 3 years.
-Earnings include an other income of Rs.66.15 Cr.
-Debtor days have increased from 104.45 to 135.82 days.
Competition
– The industry trades at a mean P/E of 28.3x. Piramal Enterp. trades at the industry’s max P/E of 48.94x. DCAL trades at a P/E of x
– Industry’s mean G-Factor is 2.4 while the mean Piotski score is 9.0. DCAL has a G-Factor of 3 and Piotski scoreof 4.
– Average 1 month return for industry is -2.8%. The max 1- month return was given by Piramal Enterp.: a return of 17.58 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 64.0 cr compared to Rs 30.0 cr for period ended Jun 2020, a rise of 113.3%
Company reported operating profit of Rs 4.0 cr for period ended Jun 2021, operating profit margin at 6.2 %.
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 -0.89 compared to Rs -9.06 for previous quarter ended Mar 2021 and Rs -2.88 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 242.0 cr for period ended TTM vis-vis sales of Rs 208.0 cr for the period ended Mar 2021, a healthy growth of 14.0%. The 3 year sales cagr stood at -23.9%.
Operating margins expanded to -10.0% for period ended TTM vis-vis -28.0% for period ended Mar 2021, expansion of 1800.0 bps.
Net Profit reported at Rs -201.0 cr for period ended TTM vis-vis sales of Rs -233.0 cr for the period ended Mar 2021, rising 0%.
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 worsened on its Return on Equity (RoE) metric. The RoE on Last Year basis was -5.0% compared to -1.0% over the last 3 Years. – The stock has given a return of -4% on a 1 Year basis vis-vis a return of -10% over the last 3 Years. – The compounded sales growth on a TTM bassis is -64% vis-vis a compounded sales growth of -24% over the last 3 Years. – The compounded profit growth on a TTM basis is -653% vis-vis a compounded profit growth of % over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Jun 2021 fii holding stood at 5.91% vis-vis 6.38% for Mar 2021 – Public shareholding has risen for the period ended Jun 2021. The Jun 2021 public holding stood at 28.01% vis-vis 25.36% for Mar 2021
Conclusion
– is almost debt free.
-Stock is trading at 0.63 times its book value – has low interest coverage ratio.
– has a low return on equity of -0.95% for last 3 years.
-Earnings include an other income of Rs.66.15 Cr.
-Debtor days have increased from 104.45 to 135.82 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 200.84 and is trading at 188.0. 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
