Mehabe score: 3 G Factor: 5 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 5 and Piotski score of 6.
Description
CSCL, is a Vadodara, Gujarat based company incorporated in 1988, involved in manufacture of Pharmaceutical intermediates and Oilfield Chemicals. The company has manufacturing facility based in Savli District. Vadodara. The company made an IPO in September 2020 and got listed on National Stock Exchange in October 2020.Site:CHEMCONMain Symbol:CHEMCON
Stock trades at 411.0, below its 50dma 457.04 and below its 200dma 467.37. The stock remains bearish on technicals
The 52 week high is at 569.40 and the 52week low is at 398.00
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
– is almost debt free.
– has delivered good profit growth of 76.77% CAGR over last 5 years
– has a good return on equity (ROE) track record: 3 Years ROE 33.20%
Weakness
– Though the company is reporting repeated profits, it is not paying out dividend
-Debtor days have increased from 114.37 to 142.06 days.
Competition
– The industry trades at a mean P/E of 27.2x. Clean Science trades at the industry’s max P/E of 112.17x. CHEMCON trades at a P/E of 24.7x
– Industry’s mean G-Factor is 3.6 while the mean Piotski score is 8.0. CHEMCON has a G-Factor of 5 and Piotski scoreof 6.
– Average 1 month return for industry is 1.4%. The max 1- month return was given by Solar Industries: a return of 24.0 %
Quarterly Results
Sales for period ended Sep 2021 is Rs 61.0 cr compared to Rs 62.0 cr for period ended Sep 2020, a fall of 1.6%
Operating Profits reported at Rs 19.0 cr for period ended Sep 2021 vis-vis 23.0 for period ended Sep 2020 .
Operating Margins contracted -594.9 bps for period ended Sep 2021 vis-vis Sep 2020 .
The EPS for Sep 2021 was Rs 3.98 compared to Rs 3.66 for previous quarter ended Jun 2021 and Rs 4.25 for Sep 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 255.0 cr for period ended TTM vis-vis sales of Rs 243.0 cr for the period ended Mar 2021, a growth of 4.7%. The 3 year sales cagr stood at -5.6%.
Operating margins shrank to 32.0% for period ended TTM vis-vis 33.0% for period ended Mar 2021, contraction of 100.0 bps.
Net Profit reported at Rs 60.0 cr for period ended TTM vis-vis sales of Rs 56.0 cr for the period ended Mar 2021, rising 6.7%.
Company recorded a healthy Net Profit CAGR of 11.7% 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 65.0 cr for period ended Mar 2021 vis-vis Rs 12.0 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 worsened on its Return on Equity (RoE) metric. The RoE on Last Year basis was 23.0% compared to 33.0% over the last 3 Years. – The stock has given a return of 3% on a 1 Year basis vis-vis a return of % over the last 3 Years. – The compounded sales growth on a TTM bassis is 17% vis-vis a compounded sales growth of 16% over the last 3 Years. – The compounded profit growth on a TTM basis is 47% vis-vis a compounded profit growth of 29% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Sep 2021 fii holding stood at 0.09% vis-vis 0.21% for Jun 2021 – Public shareholding has remained largely constant. The Sep 2021 public holding stood at 24.41% vis-vis 24.06% for Jun 2021
Conclusion
– has reduced debt.
– is almost debt free.
– has delivered good profit growth of 76.77% CAGR over last 5 years
– has a good return on equity (ROE) track record: 3 Years ROE 33.20% – Though the company is reporting repeated profits, it is not paying out dividend
-Debtor days have increased from 114.37 to 142.06 days.
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 below its 50 DMA 457.04 and is trading at 411.0. Shows a near term lack of buying interest.
