Mehabe score: 4 G Factor: 6 Piotski Score: 3 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 6 and Piotski score of 3.
Description
Super Spinning Mills is engaged in the manufacture and selling of cotton, cotton yarn and allied products. Site:SUPERSPIN Main Symbol:SUPERSPIN
Stock trades at 17.5, above its 50dma 14.57. It also trades above its 200dma 11.24. The stock remains bullish on techicals
The 52 week high is at 20.20 and the 52week low is at 4.00
Price Chart
P/E Chart
Sales and Margin
Strengths
– Stock is trading at 1.03 times its book value
– is expected to give good quarter
Weakness
– The company has delivered a poor sales growth of -32.48% over past five years.
– has a low return on equity of -15.34% for last 3 years.
-Earnings include an other income of Rs.10.51 Cr.
-‘s cost of borrowing seems high
Competition
– The industry trades at a mean P/E of 10.3x. Arvind Ltd trades at the industry’s max P/E of 17.44x. SUPERSPIN trades at a P/E of x
– Industry’s mean G-Factor is 4.1 while the mean Piotski score is 8.0. SUPERSPIN has a G-Factor of 6 and Piotski scoreof 3.
– Average 1 month return for industry is 11.0%. The max 1- month return was given by Super Spinning: a return of 40.56 %
Quarterly Results
Sales for period ended Dec 2021 is Rs 27.37 cr compared to Rs 15.79 cr for period ended Dec 2020, a rise of 73.3% .
vis-vis 0.15 for period ended Dec 2020 .
Operating Margins expanded 1545.5 bps for period ended Dec 2021 vis-vis Dec 2020.
Company reported operating profit of Rs 4.49 cr for period ended Dec 2021 and operating profit margin at 16.4 % for same period.
The EPS for quarter ended Dec 2021 is Rs 0.2 compared to Rs -0.48 for previous quarter ended Sep 2021 and Rs 0.23 for Dec 2020.
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 85.55 cr for period ended TTM vis-vis sales of Rs 48.88 cr for the period ended Mar 2021, a healthy growth of 42.9%. The 3 year sales cagr stood at -25.6%.
Operating margins expanded to 12.94% for period ended TTM vis-vis -8.08% for period ended Mar 2021, expansion of 2102.0 bps.
Net Profit reported at Rs -0.15 cr for period ended TTM vis-vis sales of Rs -7.89 cr for the period ended Mar 2021, rising 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 stock has given a return of 254% on a 1 Year basis vis-vis a return of 41% over the last 3 Years. – The compounded sales growth on a TTM bassis is -12% vis-vis a compounded sales growth of -43% over the last 3 Years. – The compounded profit growth on a TTM basis is 87% vis-vis a compounded profit growth of 13% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Dec 2021 public holding stood at 57.2% vis-vis 57.2% for Sep 2021
Conclusion
– Stock is trading at 1.03 times its book value
– is expected to give good quarter – The company has delivered a poor sales growth of -32.48% over past five years.
– has a low return on equity of -15.34% for last 3 years.
-Earnings include an other income of Rs.10.51 Cr.
-‘s cost of borrowing seems high
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 14.57 and is trading at 17.5 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
