Mehabe score: 2 G Factor: 6 Piotski Score: 4 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 6 and Piotski score of 4.
Description
Gulf Oil Lubricants Ltd is engaged in the business of manufacturing, marketing and trading of automotive and non-automotive lubricants.[1] It is among the top three lubricant companies in India among private players.[2]Site:GULFOILLUBMain Symbol:GULFOILLUB
Stock trades at 595.0, below its 50dma 614.97 and below its 200dma 665.39. The stock remains bearish on technicals
The 52 week high is at 846.15 and the 52week low is at 548.40
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
– is expected to give good quarter
– has a good return on equity (ROE) track record: 3 Years ROE 28.75%
– has been maintaining a healthy dividend payout of 35.69%
Weakness
– The company has delivered a poor sales growth of 10.31% over past five years.
– might be capitalizing the interest cost
Competition
– The industry trades at a mean P/E of 28.1x. Clean Science trades at the industry’s max P/E of 110.29x. GULFOILLUB trades at a P/E of 14.1x
– Industry’s mean G-Factor is 3.5 while the mean Piotski score is 8.0. GULFOILLUB has a G-Factor of 6 and Piotski scoreof 4.
– Average 1 month return for industry is -4.5%. The max 1- month return was given by Gulf Oil Lubric.: a return of 1.27 %
Quarterly Results
Sales for period ended Sep 2021 is Rs 534.0 cr compared to Rs 412.0 cr for period ended Sep 2020, a rise of 29.6%
Operating Profits reported at Rs 77.0 cr for period ended Sep 2021 vis-vis 78.0 for period ended Sep 2020 .
Operating Margins contracted -451.3 bps for period ended Sep 2021 vis-vis Sep 2020 .
The EPS for Sep 2021 was Rs 11.64 compared to Rs 6.03 for previous quarter ended Jun 2021 and Rs 11.78 for Sep 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 1950.0 cr for period ended TTM vis-vis sales of Rs 1652.0 cr for the period ended Mar 2021, a healthy growth of 15.3%. The 3 year sales cagr stood at 4.6%.
Operating margins shrank to 14.0% for period ended TTM vis-vis 16.0% for period ended Mar 2021, contraction of 200.0 bps.
Net Profit reported at Rs 213.0 cr for period ended TTM vis-vis sales of Rs 200.0 cr for the period ended Mar 2021, rising 6.1%.
Company recorded a Net Profit CAGR of 6.2% 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 worsened on its Return on Equity (RoE) metric. The RoE on Last Year basis was 24.0% compared to 29.0% over the last 3 Years. – The stock has given a return of -10% on a 1 Year basis vis-vis a return of -6% over the last 3 Years. – The compounded sales growth on a TTM bassis is 36% vis-vis a compounded sales growth of 7% over the last 3 Years. – The compounded profit growth on a TTM basis is 27% vis-vis a compounded profit growth of 8% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Sep 2021 fii holding stood at 9.17% vis-vis 10.1% for Jun 2021 – Public shareholding has remained largely constant. The Sep 2021 public holding stood at 13.53% vis-vis 12.13% for Jun 2021
Conclusion
– has reduced debt.
– is expected to give good quarter
– has a good return on equity (ROE) track record: 3 Years ROE 28.75%
– has been maintaining a healthy dividend payout of 35.69% – The company has delivered a poor sales growth of 10.31% over past five years.
– might be capitalizing the interest cost
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 614.97 and is trading at 595.0. 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
