Mehabe score: 7 G Factor: 3 Piotski Score: 6 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 6.
Description
Link Pharma Chem is engaged in the business of manufacturing of organic intermediates which are used in pharmaceuticals , agro and specialty chemical industries.Site:524748Main Symbol:LINKPH
Stock trades at 37.0, above its 50dma 34.66. It also trades above its 200dma 31.05. The stock remains bullish on techicals
The 52 week high is at 47.80 and the 52week low is at 19.00
Price Chart
P/E Chart
Sales and Margin
Strengths
– is expected to give good quarter
Weakness
– Though the company is reporting repeated profits, it is not paying out dividend
– has a low return on equity of 10.55% for last 3 years.
Competition
– The industry trades at a mean P/E of 26.7x. Pidilite Inds. trades at the industry’s max P/E of 91.63x. 524748 trades at a P/E of 13.1x
– Industry’s mean G-Factor is 2.9 while the mean Piotski score is 8.0. 524748 has a G-Factor of 3 and Piotski scoreof 6.
– Average 1 month return for industry is -7.1%. The max 1- month return was given by Gujarat Fluoroch: a return of 3.79 %
Quarterly Results
Sales for period ended Sep 2021 is Rs 14.87 cr compared to Rs 8.56 cr for period ended Sep 2020, a rise of 73.7%
Operating Profits reported at Rs 0.95 cr for period ended Sep 2021 vis-vis 0.7 for period ended Sep 2020 .
Operating Margins contracted -178.9 bps for period ended Sep 2021 vis-vis Sep 2020 .
The EPS for Sep 2021 was Rs 0.95 compared to Rs 1.1 for previous quarter ended Jun 2021 and Rs 0.61 for Sep 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 49.39 cr for period ended TTM vis-vis sales of Rs 34.81 cr for the period ended Mar 2021, a healthy growth of 29.5%. The 3 year sales cagr stood at 26.3%.
Operating margins shrank to 7.01% for period ended TTM vis-vis 9.02% for period ended Mar 2021, contraction of 201.0 bps.
Net Profit reported at Rs 1.41 cr for period ended TTM vis-vis sales of Rs 1.08 cr for the period ended Mar 2021, rising 23.4%.
Company recorded a healthy Net Profit CAGR of 28.8% 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 4.85 cr for period ended Mar 2021 vis-vis Rs 2.95 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 10.0% compared to 11.0% over the last 3 Years. – The stock has given a return of 63% on a 1 Year basis vis-vis a return of 9% over the last 3 Years. – The compounded sales growth on a TTM bassis is 72% vis-vis a compounded sales growth of 14% over the last 3 Years. – The compounded profit growth on a TTM basis is 25% vis-vis a compounded profit growth of 2% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Sep 2021 public holding stood at 48.49% vis-vis 48.49% for Jun 2021
Conclusion
– is expected to give good quarter – Though the company is reporting repeated profits, it is not paying out dividend
– has a low return on equity of 10.55% for last 3 years.
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 34.66 and is trading at 37.0 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
