Mehabe score: 3 G Factor: 3 Piotski Score: 6 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 6.
Description
Sumeet Industries is engaged in the business of manufacturing and exporting Polyester Yarn (POY and FDY), Polyester Chips and Texturizing Yarn.Site:SUMEETINDSMain Symbol:SUMEETINDS
Stock trades at 7.95, below its 50dma 8.04. However it is trading above its 200dma 5.34. 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 8.04.
The 52 week high is at 12.80 and the 52week low is at 1.84
Price Chart
P/E Chart
Sales and Margin
Strengths
– is expected to give good quarter
-Debtor days have improved from 67.85 to 53.99 days.
Weakness
– has low interest coverage ratio.
-The company has delivered a poor sales growth of -14.22% over past five years.
-Promoter holding is low: 21.67%
Competition
– The industry trades at a mean P/E of 13.2x. SRF trades at the industry’s max P/E of 37.19x. SUMEETINDS trades at a P/E of 25.7x
– Industry’s mean G-Factor is 5.0 while the mean Piotski score is 7.0. SUMEETINDS has a G-Factor of 3 and Piotski scoreof 6.
– Average 1 month return for industry is -4.6%. The max 1- month return was given by SRF: a return of 14.01 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 183.49 cr compared to Rs 52.52 cr for period ended Jun 2020, a rise of 249.4%
Company reported operating profit of Rs 13.85 cr for period ended Jun 2021, operating profit margin at 7.5 %.
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 0.01 compared to Rs 1.18 for previous quarter ended Mar 2021 and Rs -0.99 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 705.0 cr for period ended TTM vis-vis sales of Rs 574.0 cr for the period ended Mar 2021, a healthy growth of 18.6%. The 3 year sales cagr stood at -6.7%.
Operating margins expanded to 6.0% for period ended TTM vis-vis 4.0% for period ended Mar 2021, expansion of 200.0 bps.
Net Profit reported at Rs 3.0 cr for period ended TTM vis-vis sales of Rs -7.0 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 stock has given a return of 261% on a 1 Year basis vis-vis a return of -12% over the last 3 Years. – The compounded sales growth on a TTM bassis is 25% vis-vis a compounded sales growth of -22% over the last 3 Years. – The compounded profit growth on a TTM basis is 102% 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 78.33% vis-vis 78.33% for Mar 2021
Conclusion
– is expected to give good quarter
-Debtor days have improved from 67.85 to 53.99 days. – has low interest coverage ratio.
-The company has delivered a poor sales growth of -14.22% over past five years.
-Promoter holding is low: 21.67%
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 8.04 and is trading at 7.95. 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
