Mehabe score: 2 G Factor: 3 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 3 and Piotski score of 5.
Description
Sandhar Technologies Ltd and its joint ventures are primarily engaged in the manufacturing and assembling of automotive components for the automotive industry in India.#
Stock trades at 258.0, below its 50dma 266.28. However it is trading above its 200dma 242.57. 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 266.28.
The 52 week high is at 323.05 and the 52week low is at 174.50
Price Chart
P/E Chart
Sales and Margin
Strengths
– is expected to give good quarter
– has been maintaining a healthy dividend payout of 20.14%
Weakness
– The company has delivered a poor sales growth of 4.25% over past five years.
– has a low return on equity of 9.49% for last 3 years.
– might be capitalizing the interest cost
-Debtor days have increased from 52.92 to 70.01 days.
Competition
– The industry trades at a mean P/E of 20.9x. WABCO India trades at the industry’s max P/E of 85.43x. SANDHAR trades at a P/E of 17.1x
– Industry’s mean G-Factor is 3.2 while the mean Piotski score is 7.0. SANDHAR has a G-Factor of 3 and Piotski scoreof 5.
– Average 1 month return for industry is -6.1%. The max 1- month return was given by Endurance Tech.: a return of 2.96 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 410.07 cr compared to Rs 129.26 cr for period ended Jun 2020, a rise of 217.2%
Company reported operating profit of Rs 27.9 cr for period ended Jun 2021, operating profit margin at 6.8 %.
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 0.37 compared to Rs 6.67 for previous quarter ended Mar 2021 and Rs -5.15 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 2144.0 cr for period ended TTM vis-vis sales of Rs 1864.0 cr for the period ended Mar 2021, a healthy growth of 13.1%. The 3 year sales cagr stood at -2.8%.
Net Profit reported at Rs 91.0 cr for period ended TTM vis-vis sales of Rs 58.0 cr for the period ended Mar 2021, rising 36.3%.
Company reported a poor Net Profit CAGR of -1.4% 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 7.0% compared to 9.0% over the last 3 Years. – The stock has given a return of 11% 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 41% vis-vis a compounded sales growth of -1% over the last 3 Years. – The compounded profit growth on a TTM basis is 661% vis-vis a compounded profit growth of -4% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Jun 2021 fii holding stood at 1.7% vis-vis 1.55% for Mar 2021 – Public shareholding has remained largely constant. The Jun 2021 public holding stood at 11.69% vis-vis 11.81% for Mar 2021
Conclusion
– is expected to give good quarter
– has been maintaining a healthy dividend payout of 20.14% – The company has delivered a poor sales growth of 4.25% over past five years.
– has a low return on equity of 9.49% for last 3 years.
– might be capitalizing the interest cost
-Debtor days have increased from 52.92 to 70.01 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 266.28 and is trading at 258.0. 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
