Mehabe score: 5 G Factor: 4 Piotski Score: 5 The stock has a rating 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 4 and Piotski score of 5.
Description
Incorporated in 1968, Alkali Metals Limited manufactures variety of products ranging from sodium derivatives, pyridine derivatives, fine chemicals and pharmaceutical APIs, etc. Site:ALKALI Main Symbol:ALKALI
Stock trades at 114.0, above its 50dma 105.28. It also trades above its 200dma 84.72. The stock remains bullish on techicals
The 52 week high is at 150.35 and the 52week low is at 45.75
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 28.81%
Weakness
– The company has delivered a poor sales growth of -5.45% over past five years.
– has a low return on equity of 0.72% for last 3 years.
-Promoters have pledged 30.04% of their holding.
-Debtor days have increased from 55.54 to 79.02 days.
Competition
– The industry trades at a mean P/E of 30.8x. Alkali Metals trades at the industry’s max P/E of 156.62x. ALKALI trades at a P/E of 157.0x
– Industry’s mean G-Factor is 3.0 while the mean Piotski score is 8.0. ALKALI has a G-Factor of 4 and Piotski scoreof 5.
– Average 1 month return for industry is 1.1%. The max 1- month return was given by Alkali Metals: a return of 26.44 %
Quarterly Results
Sales for period ended Dec 2021 is Rs 22.4 cr compared to Rs 14.4 cr for period ended Dec 2020, a rise of 55.6% .
vis-vis 2.31 for period ended Dec 2020 .
Operating Margins contracted -537.2 bps for period ended Dec 2021 vis-vis Dec 2020.
Company reported operating profit of Rs 2.39 cr for period ended Dec 2021 and operating profit margin at 10.7 % for same period.
The EPS for quarter ended Dec 2021 is Rs 0.69 compared to Rs 3.13 for previous quarter ended Sep 2021 and Rs 1.06 for Dec 2020.
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 77.77 cr for period ended TTM vis-vis sales of Rs 55.38 cr for the period ended Mar 2021, a healthy growth of 28.8%. The 3 year sales cagr stood at 2.8%.
Operating margins expanded to 11.75% for period ended TTM vis-vis 10.94% for period ended Mar 2021, expansion of 81.0 bps.
Net Profit reported at Rs 1.64 cr for period ended TTM vis-vis sales of Rs -1.21 cr for the period ended Mar 2021, rising 173.8%.
Company reported a poor Net Profit CAGR of -1.0% 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 worsened on its Return on Equity (RoE) metric. The RoE on Last Year basis was -4.0% compared to 1.0% over the last 3 Years. – The stock has given a return of 114% on a 1 Year basis vis-vis a return of 40% over the last 3 Years. – The compounded sales growth on a TTM bassis is 23% vis-vis a compounded sales growth of -5% over the last 3 Years. – The compounded profit growth on a TTM basis is 156% vis-vis a compounded profit growth of % over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Dec 2021 fii holding stood at 0.08% vis-vis 0.0% for Sep 2021 – Public shareholding has remained largely constant. The Dec 2021 public holding stood at 30.28% vis-vis 30.36% for Sep 2021
Conclusion
– has reduced debt.
– is expected to give good quarter
– has been maintaining a healthy dividend payout of 28.81% – The company has delivered a poor sales growth of -5.45% over past five years.
– has a low return on equity of 0.72% for last 3 years.
-Promoters have pledged 30.04% of their holding.
-Debtor days have increased from 55.54 to 79.02 days.
The business fundamentals of the stock remain stable. Stronger near term results will build interest in the stock. We suggest to wait for a upturn in business performance.
Technically, the stock remains above its 50 DMA 105.28 and is trading at 114.0, thus bullish price action wise.
