Mehabe score: 6 G Factor: 0 Piotski Score: 6 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 0 and Piotski score of 6.
Description
Virat Industries is engaged in the business of manufacturer and Exporter of premium quality of dress and sport socks for Men, Ladies and Children. The Company also manufactures high quality football socks for many clubs of Europe.Site:530521Main Symbol:VIRAT
Stock trades at 46.0, above its 50dma 43.39. It also trades above its 200dma 39.57. The stock remains bullish on techicals
The 52 week high is at 58.00 and the 52week low is at 26.20
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
– is almost debt free.
-Stock is trading at 1.01 times its book value
Weakness
– Though the company is reporting repeated profits, it is not paying out dividend
-The company has delivered a poor sales growth of -5.35% over past five years.
– has a low return on equity of 4.68% for last 3 years.
-Earnings include an other income of Rs.0.77 Cr.
-Debtor days have increased from 59.39 to 78.00 days.
Competition
– The industry trades at a mean P/E of 23.9x. Garware Tech. trades at the industry’s max P/E of 39.29x. 530521 trades at a P/E of 22.7x
– Industry’s mean G-Factor is 3.4 while the mean Piotski score is 9.0. 530521 has a G-Factor of 0 and Piotski scoreof 6.
– Average 1 month return for industry is 2.9%. The max 1- month return was given by PDS Multi.: a return of 33.98 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 3.2 cr compared to Rs 2.75 cr for period ended Jun 2020, a rise of 16.4%
Company reported operating profit of Rs 0.08 cr for period ended Jun 2021, operating profit margin at 2.5 %.
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 -0.04 compared to Rs -0.1 for previous quarter ended Mar 2021 and Rs -0.45 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 20.02 cr for period ended TTM vis-vis sales of Rs 19.56 cr for the period ended Mar 2021, a growth of 2.3%. The 3 year sales cagr stood at -6.0%.
Operating margins expanded to 11.44% for period ended TTM vis-vis 10.69% for period ended Mar 2021, expansion of 75.0 bps.
Net Profit reported at Rs 1.0 cr for period ended TTM vis-vis sales of Rs 0.79 cr for the period ended Mar 2021, rising 21.0%.
Company recorded a healthy Net Profit CAGR of 15.4% 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 4.2 cr for period ended Mar 2021 vis-vis Rs 1.47 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 4.0% compared to 5.0% over the last 3 Years. – The stock has given a return of 57% on a 1 Year basis vis-vis a return of -27% over the last 3 Years. – The compounded sales growth on a TTM bassis is -11% vis-vis a compounded sales growth of -17% over the last 3 Years. – The compounded profit growth on a TTM basis is 12% vis-vis a compounded profit growth of -39% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Jun 2021 public holding stood at 52.44% vis-vis 52.44% for Mar 2021
Conclusion
– has reduced debt.
– is almost debt free.
-Stock is trading at 1.01 times its book value – Though the company is reporting repeated profits, it is not paying out dividend
-The company has delivered a poor sales growth of -5.35% over past five years.
– has a low return on equity of 4.68% for last 3 years.
-Earnings include an other income of Rs.0.77 Cr.
-Debtor days have increased from 59.39 to 78.00 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 43.39 and is trading at 46.0 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
