Mehabe score: 8 G Factor: 6 Piotski Score: 6 The stock has a rating 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 6 and Piotski score of 6.
Description
Eco Recycling is engaged in the e-waste recycling business in an organised manner, with the help of superior technology, complying norms set by the Pollution Control Board for the environmental safety.Site:530643Main Symbol:ECORECO
Stock trades at 82.0, above its 50dma 75.27. It also trades above its 200dma 63.44. The stock remains bullish on techicals
The 52 week high is at 122.40 and the 52week low is at 34.30
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
– has delivered good profit growth of 41.64% CAGR over last 5 years
-Debtor days have improved from 76.28 to 31.69 days.
Weakness
– Stock is trading at 4.98 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 -19.20% over past five years.
– has a low return on equity of 4.63% for last 3 years.
– might be capitalizing the interest cost
-Earnings include an other income of Rs.8.47 Cr.
Competition
– The industry trades at a mean P/E of 27.0x. Affle India trades at the industry’s max P/E of 103.24x. 530643 trades at a P/E of 14.9x
– Industry’s mean G-Factor is 4.4 while the mean Piotski score is 9.0. 530643 has a G-Factor of 6 and Piotski scoreof 6.
– Average 1 month return for industry is 12.4%. The max 1- month return was given by Indian Energy Ex: a return of 32.36 %
Quarterly Results
Sales for period ended Sep 2021 is Rs 4.47 cr compared to Rs 1.95 cr for period ended Sep 2020, a rise of 129.2%
Operating Profits reported at Rs 1.1 cr for period ended Sep 2021 vis-vis 0.09 for period ended Sep 2020 .
Operating Margins expanded 1999.3 bps for period ended Sep 2021 vis-vis Sep 2020 .
The EPS for Sep 2021 was Rs 0.94 compared to Rs 3.25 for previous quarter ended Jun 2021 and Rs 0.22 for Sep 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 17.0 cr for period ended TTM vis-vis sales of Rs 13.0 cr for the period ended Mar 2021, a healthy growth of 23.5%. The 3 year sales cagr stood at 12.3%.
Operating margins expanded to 22.0% for period ended TTM vis-vis 8.0% for period ended Mar 2021, expansion of 1400.0 bps.
Net Profit reported at Rs 11.0 cr for period ended TTM vis-vis sales of Rs 4.0 cr for the period ended Mar 2021, rising 63.6%.
Company recorded a healthy Net Profit CAGR of 122.4% 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 9.0 cr for period ended Mar 2021 vis-vis Rs 5.0 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 3.0% compared to 5.0% over the last 3 Years. – The stock has given a return of 104% on a 1 Year basis vis-vis a return of 33% over the last 3 Years. – The compounded sales growth on a TTM bassis is 76% vis-vis a compounded sales growth of 3% over the last 3 Years. – The compounded profit growth on a TTM basis is 336% vis-vis a compounded profit growth of 50% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Jun 2021 fii holding stood at 0.86% vis-vis 0.86% for Mar 2021 – Public shareholding has remained largely constant. The Jun 2021 public holding stood at 27.36% vis-vis 27.48% for Mar 2021
Conclusion
– has reduced debt.
– has delivered good profit growth of 41.64% CAGR over last 5 years
-Debtor days have improved from 76.28 to 31.69 days. – Stock is trading at 4.98 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 -19.20% over past five years.
– has a low return on equity of 4.63% for last 3 years.
– might be capitalizing the interest cost
-Earnings include an other income of Rs.8.47 Cr.
The business fundamentals of the stock remain stable. Stronger near term results will build interest in the stock. We suggest to wait for a upturn in business performance.
Technically, the stock remains above its 50 DMA 75.27 and is trading at 82.0, thus bullish price action wise.
