Mehabe score: 4 G Factor: 2 Piotski Score: 4 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 2 and Piotski score of 4.
Description
Incorporated in 2010, Bhakti Gems & Gems Jewellery Ltd. is a manufacturer and wholesaler of branded Jewellery & Ornaments. [1] Site:BGJL Main Symbol:BGJL
Stock trades at 31.0, above its 50dma 19.66. It also trades above its 200dma 23.1. The stock remains bullish on techicals
The 52 week high is at 91.95 and the 52week low is at 10.60
Price Chart
P/E Chart
Sales and Margin
Strengths
– is almost debt free.
– is expected to give good quarter
-Debtor days have improved from 34.29 to 23.60 days.
Weakness
– Though the company is reporting repeated profits, it is not paying out dividend
– has a low return on equity of 1.33% for last 3 years.
-Promoter holding has decreased over last 3 years: -15.24%
Competition
– The industry trades at a mean P/E of 34.3x. Titan Company trades at the industry’s max P/E of 130.2x. BGJL trades at a P/E of 58.6x
– Industry’s mean G-Factor is 3.1 while the mean Piotski score is 7.0. BGJL has a G-Factor of 2 and Piotski scoreof 4.
– Average 1 month return for industry is 23.5%. The max 1- month return was given by Bhakti Gems: a return of 118.42 %
Quarterly Results
Sales for period ended Dec 2021 is Rs 27.35 cr compared to Rs 20.61 cr for period ended Dec 2020, a rise of 32.7% .
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Company reported negative operating profit of Rs -0.09 cr for period ended Dec 2021. For same period last year, operating profit was 2.64.
The EPS for quarter ended Dec 2021 is Rs 0.14 compared to Rs 0.15 for previous quarter ended Sep 2021 and Rs 2.07 for Dec 2020.
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 105.0 cr for period ended TTM vis-vis sales of Rs 68.0 cr for the period ended Mar 2021, a healthy growth of 35.2%. The 3 year sales cagr stood at 19.2%.
Operating margins shrank to -2.0% for period ended TTM vis-vis 1.0% for period ended Mar 2021, contraction of 300.0 bps.
Net Profit reported at Rs -1.0 cr for period ended TTM vis-vis sales of Rs 0.0 cr for the period ended Mar 2021, falling 0%.
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
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 2.0% compared to 1.0% over the last 3 Years. – The stock has given a return of -49% on a 1 Year basis vis-vis a return of 26% over the last 3 Years. – The compounded sales growth on a TTM bassis is 138% vis-vis a compounded sales growth of 20% over the last 3 Years. – The compounded profit growth on a TTM basis is 0% vis-vis a compounded profit growth of 11% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Dec 2021 public holding stood at 46.97% vis-vis 46.97% for Sep 2021
Conclusion
– is almost debt free.
– is expected to give good quarter
-Debtor days have improved from 34.29 to 23.60 days. – Though the company is reporting repeated profits, it is not paying out dividend
– has a low return on equity of 1.33% for last 3 years.
-Promoter holding has decreased over last 3 years: -15.24%
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 19.66 and is trading at 31.0 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
