Mehabe score: 6 G Factor: 3 Piotski Score: 8 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 3 and Piotski score of 8.
Description
Cenlub Industries Ltd was incorporated in 1992 by the Mittal family and took over the business of proprietorship firm Cenlub Engineers. It manufactures and supplies centralized lubrication systems for various machines, plants, equipment and vehicles. The company is being managed by Mr. V K Mittal and family. Registered office of the company is in Haryana.Site:522251Main Symbol:CENLUB
Stock trades at 106.0, above its 50dma 79.86. It also trades above its 200dma 69.05. The stock remains bullish on techicals
The 52 week high is at 113.90 and the 52week low is at 28.00
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
– is expected to give good quarter
Weakness
– Though the company is reporting repeated profits, it is not paying out dividend
-The company has delivered a poor sales growth of 5.50% over past five years.
– has a low return on equity of 12.26% for last 3 years.
– has high debtors of 152.74 days.
Competition
– The industry trades at a mean P/E of 20.9x. HLE Glascoat trades at the industry’s max P/E of 144.91x. 522251 trades at a P/E of 12.2x
– Industry’s mean G-Factor is 3.4 while the mean Piotski score is 8.0. 522251 has a G-Factor of 3 and Piotski scoreof 8.
– Average 1 month return for industry is 5.4%. The max 1- month return was given by Cenlub Industrie: a return of 29.87 %
Quarterly Results
Sales for period ended Sep 2021 is Rs 16.4 cr compared to Rs 8.89 cr for period ended Sep 2020, a rise of 84.5%
Operating Profits reported at Rs 3.68 cr for period ended Sep 2021 vis-vis 0.89 for period ended Sep 2020 .
Operating Margins expanded 1242.8 bps for period ended Sep 2021 vis-vis Sep 2020 .
The EPS for Sep 2021 was Rs 5.68 compared to Rs 0.51 for previous quarter ended Jun 2021 and Rs 1.22 for Sep 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 51.0 cr for period ended TTM vis-vis sales of Rs 40.96 cr for the period ended Mar 2021, a healthy growth of 19.7%. The 3 year sales cagr stood at 2.0%.
Operating margins expanded to 17.8% for period ended TTM vis-vis 15.67% for period ended Mar 2021, expansion of 213.0 bps.
Net Profit reported at Rs 6.13 cr for period ended TTM vis-vis sales of Rs 4.01 cr for the period ended Mar 2021, rising 34.6%.
Company recorded a Net Profit CAGR of 7.5% 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 5.9 cr for period ended Mar 2021 vis-vis Rs 0.62 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 13.0% compared to 12.0% over the last 3 Years. – The stock has given a return of 193% on a 1 Year basis vis-vis a return of 17% over the last 3 Years. – The compounded sales growth on a TTM bassis is 31% vis-vis a compounded sales growth of 3% over the last 3 Years. – The compounded profit growth on a TTM basis is 221% vis-vis a compounded profit growth of 8% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Sep 2021 public holding stood at 48.36% vis-vis 48.36% for Jun 2021
Conclusion
– has reduced debt.
– is expected to give good quarter – Though the company is reporting repeated profits, it is not paying out dividend
-The company has delivered a poor sales growth of 5.50% over past five years.
– has a low return on equity of 12.26% for last 3 years.
– has high debtors of 152.74 days.
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 79.86 and is trading at 106.0 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
