Mehabe score: 5 G Factor: 1 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 1 and Piotski score of 6. Site:541778Main Symbol:DEEP
Stock trades at 156.0, above its 50dma 118.62. It also trades above its 200dma 87.81. The stock remains bullish on techicals
The 52 week high is at 156.30 and the 52week low is at 50.50
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
– is almost debt free.
Weakness
– Stock is trading at 6.81 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 2.09% over past five years.
– has a low return on equity of 9.45% for last 3 years.
– has high debtors of 166.25 days.
Competition
– The industry trades at a mean P/E of 23.2x. Responsive Ind trades at the industry’s max P/E of 105.7x. 541778 trades at a P/E of 102.0x
– Industry’s mean G-Factor is 4.0 while the mean Piotski score is 9.0. 541778 has a G-Factor of 1 and Piotski scoreof 6.
– Average 1 month return for industry is -4.1%. The max 1- month return was given by Deep Polymers: a return of 24.01 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 7.66 cr compared to Rs 7.54 cr for period ended Mar 2020, a rise of 1.6%
Operating Profits reported at Rs 0.85 cr for period ended Jun 2021 vis-vis 0.44 for period ended Mar 2020 .
Operating Margins expanded 526.1 bps for period ended Jun 2021 vis-vis Mar 2020 .
The EPS for Jun 2021 was Rs 0.55 compared to Rs -0.45 for previous quarter ended Mar 2021 and Rs 0.38 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 39.76 cr for period ended Mar 2021 vis-vis sales of Rs 32.89 cr for the period ended Mar 2020, a healthy growth of 17.3%.
Operating margins shrank to 5.81% for period ended Mar 2021 vis-vis 5.87% for period ended Mar 2020, contraction of 6.0 bps.
Net Profit reported at Rs 1.82 cr for period ended Mar 2021 vis-vis sales of Rs 1.52 cr for the period ended Mar 2020, rising 16.5%.
Company reported a poor Net Profit CAGR of -4.8% 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 1.54 cr for period ended Mar 2021 vis-vis Rs -0.01 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 7.0% compared to 9.0% over the last 3 Years. – The stock has given a return of 148% on a 1 Year basis vis-vis a return of 56% over the last 3 Years. – The compounded sales growth on a TTM bassis is 21% vis-vis a compounded sales growth of 0% over the last 3 Years. – The compounded profit growth on a TTM basis is 20% vis-vis a compounded profit growth of -5% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Jun 2021 public holding stood at 35.24% vis-vis 35.24% for Mar 2021
Conclusion
– has reduced debt.
– is almost debt free. – Stock is trading at 6.81 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 2.09% over past five years.
– has a low return on equity of 9.45% for last 3 years.
– has high debtors of 166.25 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 118.62 and is trading at 156.0 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
