Mehabe score: 6 G Factor: 6 Piotski Score: 7 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 7.
Description
Incorporated in 1982, Nikhil Adhesives is a Mumbai based multi-product company who is into manufacturing, selling and exporting various types of adhesives, emulsions that are used for various applications. It is also trading in Chemicals used in emulsions and adhesive industry. [1]Site:526159Main Symbol:NIKHILAD
Stock trades at 700.0, below its 50dma 747.84. However it is trading above its 200dma 566.22. The stock remains weak in the short term due to near term bearish momentum. However overall bullish structure remains intact. Price action will further build up as it moves above its dma50, currently situated at 747.84.
The 52 week high is at 1003.60 and the 52week low is at 119.35
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
– is expected to give good quarter
– has delivered good profit growth of 57.99% CAGR over last 5 years
Weakness
– Debtor days have increased from 91.09 to 112.38 days.
Competition
– The industry trades at a mean P/E of 27.1x. Pidilite Inds. trades at the industry’s max P/E of 93.44x. 526159 trades at a P/E of 11.4x
– Industry’s mean G-Factor is 3.2 while the mean Piotski score is 8.0. 526159 has a G-Factor of 6 and Piotski scoreof 7.
– Average 1 month return for industry is -7.5%. The max 1- month return was given by Nikhil Adhesives: a return of 2.29 %
Quarterly Results
Sales for period ended Sep 2021 is Rs 198.67 cr compared to Rs 106.41 cr for period ended Sep 2020, a rise of 86.7%
Operating Profits reported at Rs 11.75 cr for period ended Sep 2021 vis-vis 6.48 for period ended Sep 2020 .
Operating Margins contracted -17.5 bps for period ended Sep 2021 vis-vis Sep 2020 .
The EPS for Sep 2021 was Rs 15.45 compared to Rs 13.54 for previous quarter ended Jun 2021 and Rs 6.66 for Sep 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 730.0 cr for period ended TTM vis-vis sales of Rs 491.0 cr for the period ended Mar 2021, a healthy growth of 32.7%. The 3 year sales cagr stood at 17.8%.
Operating margins expanded to 7.0% for period ended TTM vis-vis 6.0% for period ended Mar 2021, expansion of 100.0 bps.
Net Profit reported at Rs 28.0 cr for period ended TTM vis-vis sales of Rs 16.0 cr for the period ended Mar 2021, rising 42.9%.
Company recorded a healthy Net Profit CAGR of 77.6% 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 23.0 cr for period ended Mar 2021 vis-vis Rs 21.0 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 improved its Return on Equity (RoE) metric. The RoE on Last Year basis was 29.0% compared to 21.0% over the last 3 Years. – The stock has given a return of 400% on a 1 Year basis vis-vis a return of 72% over the last 3 Years. – The compounded sales growth on a TTM bassis is 107% vis-vis a compounded sales growth of 14% over the last 3 Years. – The compounded profit growth on a TTM basis is 605% vis-vis a compounded profit growth of 66% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Sep 2021 public holding stood at 45.56% vis-vis 45.56% for Jun 2021
Conclusion
– has reduced debt.
– is expected to give good quarter
– has delivered good profit growth of 57.99% CAGR over last 5 years – Debtor days have increased from 91.09 to 112.38 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 747.84 and is trading at 700.0. Shows a near term lack of buying interest.
