Mehabe score: 6 G Factor: 5 Piotski Score: 4 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 5 and Piotski score of 4.
Description
International Combustion (India) Limited is engaged in the manufacturing and supply of Vibrating Screens and Feeders, Cone Crushers, Bulk Material Handling Equipment, Mining haulages, Raymond Grinding Mills, Air Classifiers and Flash Drying systems and Geared Motors and Gear Boxes.Site:505737Main Symbol:INTLCOMBQ
Stock trades at 269.0, above its 50dma 202.78. It also trades above its 200dma 191.4. The stock remains bullish on techicals
The 52 week high is at 265.00 and the 52week low is at 120.00
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
– is almost debt free.
-Stock is trading at 0.72 times its book value
– is expected to give good quarter
Weakness
– has low interest coverage ratio.
-The company has delivered a poor sales growth of 3.26% over past five years.
– has a low return on equity of -1.16% for last 3 years.
-‘s cost of borrowing seems high
Competition
– The industry trades at a mean P/E of 20.7x. HLE Glascoat trades at the industry’s max P/E of 153.46x. 505737 trades at a P/E of 31.2x
– Industry’s mean G-Factor is 3.5 while the mean Piotski score is 8.0. 505737 has a G-Factor of 5 and Piotski scoreof 4.
– Average 1 month return for industry is 6.7%. The max 1- month return was given by Intl. Combustion: a return of 25.11 %
Quarterly Results
Sales for period ended Sep 2021 is Rs 45.39 cr compared to Rs 28.88 cr for period ended Sep 2020, a rise of 57.2%
Company reported operating profit of Rs 2.63 cr for period ended Sep 2021, operating profit margin at 5.8 %.
Operating profit was negative for the same period last year thus company has improved its margins this year
The EPS for Sep 2021 was Rs 5.06 compared to Rs -3.6 for previous quarter ended Jun 2021 and Rs -5.02 for Sep 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 143.0 cr for period ended TTM vis-vis sales of Rs 110.0 cr for the period ended Mar 2021, a healthy growth of 23.1%. The 3 year sales cagr stood at 2.2%.
Operating margins expanded to 5.0% for period ended TTM vis-vis -1.0% for period ended Mar 2021, expansion of 600.0 bps.
Net Profit reported at Rs 2.0 cr for period ended TTM vis-vis sales of Rs -5.0 cr for the period ended Mar 2021, rising 350.0%.
Company reported a poor Net Profit CAGR of -20.6% 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 11.0 cr for period ended Mar 2021 vis-vis Rs -4.0 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 -6.0% compared to -1.0% over the last 3 Years. – The stock has given a return of 100% on a 1 Year basis vis-vis a return of -3% over the last 3 Years. – The compounded sales growth on a TTM bassis is 46% vis-vis a compounded sales growth of 1% over the last 3 Years. – The compounded profit growth on a TTM basis is 129% vis-vis a compounded profit growth of % over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Sep 2021 public holding stood at 47.2% vis-vis 47.2% for Jun 2021
Conclusion
– has reduced debt.
– is almost debt free.
-Stock is trading at 0.72 times its book value
– is expected to give good quarter – has low interest coverage ratio.
-The company has delivered a poor sales growth of 3.26% over past five years.
– has a low return on equity of -1.16% for last 3 years.
-‘s cost of borrowing seems high
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 202.78 and is trading at 269.0 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
