Mehabe score: 7 G Factor: 2 Piotski Score: 7 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 7.
Description
Laxmi Organic Industries Limited was established in 1989 and is in the business of specialty chemicals. The Company primarily manufactures Ethyl Acetate, Acetic Acid and Diketene Derivative Products (DDP). DDP is a specialty chemical group, the technology and business of which has been acquired by the company from Clariant Chemicals India Limited.
The company’s business operations are carried in over 30 countries including 11 offices located in India Site:LXCHEM Main Symbol:LXCHEM
Stock trades at 454.0, above its 50dma 436.65. It also trades above its 200dma 375.03. The stock remains bullish on techicals
The 52 week high is at 628.05 and the 52week low is at 143.00
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
– is almost debt free.
– has delivered good profit growth of 36.77% CAGR over last 5 years
Weakness
– Stock is trading at 10.42 times its book value
-The company has delivered a poor sales growth of 11.06% over past five years.
Competition
– The industry trades at a mean P/E of 28.2x. Clean Science trades at the industry’s max P/E of 120.31x. LXCHEM trades at a P/E of 60.3x
– Industry’s mean G-Factor is 2.6 while the mean Piotski score is 8.0. LXCHEM has a G-Factor of 2 and Piotski scoreof 7.
– Average 1 month return for industry is 2.2%. The max 1- month return was given by Gujarat Fluoroch: a return of 22.83 %
Quarterly Results
Sales for period ended Dec 2021 is Rs 860.0 cr compared to Rs 436.0 cr for period ended Dec 2020, a rise of 97.2% .
vis-vis 68.0 for period ended Dec 2020 .
Operating Margins contracted -175.9 bps for period ended Dec 2021 vis-vis Dec 2020.
Company reported operating profit of Rs 119.0 cr for period ended Dec 2021 and operating profit margin at 13.8 % for same period.
The EPS for quarter ended Dec 2021 is Rs 3.11 compared to Rs 0.55 for previous quarter ended Sep 2021 and Rs 2.01 for Dec 2020.
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 2724.0 cr for period ended TTM vis-vis sales of Rs 1768.0 cr for the period ended Mar 2021, a healthy growth of 35.1%. The 3 year sales cagr stood at 20.2%.
Operating margins expanded to 13.0% for period ended TTM vis-vis 12.0% for period ended Mar 2021, expansion of 100.0 bps.
Net Profit reported at Rs 235.0 cr for period ended TTM vis-vis sales of Rs 127.0 cr for the period ended Mar 2021, rising 46.0%.
Company recorded a healthy Net Profit CAGR of 48.3% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
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 17.0% compared to 16.0% over the last 3 Years. – The stock has given a return of % on a 1 Year basis vis-vis a return of % over the last 3 Years. – The compounded sales growth on a TTM bassis is 15% vis-vis a compounded sales growth of 9% over the last 3 Years. – The compounded profit growth on a TTM basis is 157% vis-vis a compounded profit growth of 19% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Dec 2021 fii holding stood at 0.33% vis-vis 0.87% for Sep 2021 – Public shareholding has remained largely constant. The Dec 2021 public holding stood at 23.47% vis-vis 22.91% for Sep 2021
Conclusion
– has reduced debt.
– is almost debt free.
– has delivered good profit growth of 36.77% CAGR over last 5 years – Stock is trading at 10.42 times its book value
-The company has delivered a poor sales growth of 11.06% over past five 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 436.65 and is trading at 454.0 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
