Mehabe score: 6 G Factor: 1 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 1 and Piotski score of 6.
Description
Sacheta Metals is one of the major manufacturers & exporters of Aluminium, Stainless and mild steel Houseware kitchenware Utensils – Casting – Sheet Coils – Circles, Non Stick Cookware – Pressure Cooker, Foil Chaquered sheet, PP Caps / Slug & other Houseware & also Stainless Steel Kitchenware in India. Site:SACHEMT Main Symbol:SACHEMT
Stock trades at 47.6, above its 50dma 24.05. It also trades above its 200dma 19.04. The stock remains bullish on techicals
The 52 week high is at 47.55 and the 52week low is at 14.20
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
– is expected to give good quarter
– has been maintaining a healthy dividend payout of 24.87%
Weakness
– Stock is trading at 2.69 times its book value
-Promoter holding has decreased over last quarter: -1.88%
-The company has delivered a poor sales growth of 10.45% over past five years.
– has a low return on equity of 5.87% for last 3 years.
– might be capitalizing the interest cost
Competition
– The industry trades at a mean P/E of 16.9x. Euro Panel trades at the industry’s max P/E of 91.15x. SACHEMT trades at a P/E of 40.8x
– Industry’s mean G-Factor is 3.0 while the mean Piotski score is 9.0. SACHEMT has a G-Factor of 1 and Piotski scoreof 6.
– Average 1 month return for industry is 39.1%. The max 1- month return was given by Sacheta Metals: a return of 180.53 %
Quarterly Results
Sales for period ended Dec 2021 is Rs 18.48 cr compared to Rs 24.04 cr for period ended Dec 2020, a fall of 23.1%
.
vis-vis 2.03 for period ended Dec 2020 .
Operating Margins expanded 97.1 bps for period ended Dec 2021 vis-vis Dec 2020.
Company reported operating profit of Rs 1.74 cr for period ended Dec 2021 and operating profit margin at 9.4 % for same period.
The EPS for quarter ended Dec 2021 is Rs 0.49 compared to Rs 0.22 for previous quarter ended Sep 2021 and Rs 0.47 for Dec 2020.
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 91.7 cr for period ended TTM vis-vis sales of Rs 82.36 cr for the period ended Mar 2021, a healthy growth of 10.2%. The 3 year sales cagr stood at -1.8%.
Operating margins expanded to 5.19% for period ended TTM vis-vis 4.66% for period ended Mar 2021, expansion of 53.0 bps.
Net Profit reported at Rs 2.28 cr for period ended TTM vis-vis sales of Rs 2.16 cr for the period ended Mar 2021, rising 5.3%.
Company recorded a Net Profit CAGR of 3.3% 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 13.91 cr for period ended Mar 2021 vis-vis Rs 0.6 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 7.0% compared to 6.0% over the last 3 Years. – The stock has given a return of 119% on a 1 Year basis vis-vis a return of 2% over the last 3 Years. – The compounded sales growth on a TTM bassis is 18% vis-vis a compounded sales growth of 6% over the last 3 Years. – The compounded profit growth on a TTM basis is 99% vis-vis a compounded profit growth of 5% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Sep 2021 public holding stood at 35.3% vis-vis 33.42% for Jun 2021
Conclusion
– has reduced debt.
– is expected to give good quarter
– has been maintaining a healthy dividend payout of 24.87% – Stock is trading at 2.69 times its book value
-Promoter holding has decreased over last quarter: -1.88%
-The company has delivered a poor sales growth of 10.45% over past five years.
– has a low return on equity of 5.87% for last 3 years.
– might be capitalizing the interest cost
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 24.05 and is trading at 47.6 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
