Mehabe score: 5 G Factor: 1 Piotski Score: 7 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 7.
Description
Diligent Industries is engaged in the business of Manufacturing and operation of edible oils.Site:531153Main Symbol:DILIGENT
Stock trades at 15.3, above its 50dma 13.54. It also trades above its 200dma 10.85. The stock remains bullish on techicals
The 52 week high is at 17.35 and the 52week low is at 3.82
Price Chart
P/E Chart
Sales and Margin
Strengths
– is expected to give good quarter
Weakness
– Stock is trading at 2.83 times its book value
-Though the company is reporting repeated profits, it is not paying out dividend
– has low interest coverage ratio.
-The company has delivered a poor sales growth of 9.22% over past five years.
– has a low return on equity of 3.91% for last 3 years.
– might be capitalizing the interest cost
-Earnings include an other income of Rs.1.32 Cr.
Competition
– The industry trades at a mean P/E of 19.2x. Manorama Indust. trades at the industry’s max P/E of 119.86x. 531153 trades at a P/E of 81.4x
– Industry’s mean G-Factor is 4.4 while the mean Piotski score is 7.0. 531153 has a G-Factor of 1 and Piotski scoreof 7.
– Average 1 month return for industry is -9.8%. The max 1- month return was given by AVT Natural Prod: a return of 5.67 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 19.55 cr compared to Rs 9.53 cr for period ended Jun 2020, a rise of 105.1%
Operating Profits reported at Rs 0.13 cr for period ended Jun 2021 vis-vis 0.75 for period ended Jun 2020 .
Operating Margins contracted -720.5 bps for period ended Jun 2021 vis-vis Jun 2020 .
The EPS for Jun 2021 was Rs 0.04 compared to Rs -0.1 for previous quarter ended Mar 2021 and Rs 0.07 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 81.22 cr for period ended TTM vis-vis sales of Rs 71.2 cr for the period ended Mar 2021, a healthy growth of 12.3%. The 3 year sales cagr stood at 1.4%.
Operating margins shrank to 1.99% for period ended TTM vis-vis 3.15% for period ended Mar 2021, contraction of 116.0 bps.
Net Profit reported at Rs 0.43 cr for period ended TTM vis-vis sales of Rs 0.48 cr for the period ended Mar 2021, falling 11.6%.
Company recorded a Net Profit CAGR of 1.6% 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 3.27 cr for period ended Mar 2021 vis-vis Rs 1.94 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 4.0% over the last 3 Years. – The stock has given a return of 320% on a 1 Year basis vis-vis a return of 1% over the last 3 Years. – The compounded sales growth on a TTM bassis is 18% vis-vis a compounded sales growth of -3% over the last 3 Years. – The compounded profit growth on a TTM basis is 19% vis-vis a compounded profit growth of -9% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Jun 2021 public holding stood at 38.67% vis-vis 38.67% for Mar 2021
Conclusion
– is expected to give good quarter – Stock is trading at 2.83 times its book value
-Though the company is reporting repeated profits, it is not paying out dividend
– has low interest coverage ratio.
-The company has delivered a poor sales growth of 9.22% over past five years.
– has a low return on equity of 3.91% for last 3 years.
– might be capitalizing the interest cost
-Earnings include an other income of Rs.1.32 Cr.
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 13.54 and is trading at 15.3 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
