Mehabe score: 2 G Factor: 4 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 4 and Piotski score of 4.
Description
JCT is engaged in the Business of manufacturer of cloth and nylon filament yarn, with its manufacturing facilities at Phagwara and Hoshiarpur in Punjab.Site:500223
Market Cap:
Rs 188 cr
Price:
2.17
Trading pe:
68.0x
Book-value:
3.63/share
Div yield:
0.00 %
Earning yield:
12.22%
Face-value:
2.50/share
52week high:
2.07
52week low:
0.73
Technical Analysis
Stock trades at 2.17, above its 50dma 1.33. It also trades above its 200dma 1.08. The stock remains bullish on techicals
The 52 week high is at 2.07 and the 52week low is at 0.73
Price Chart
P/E Chart
Sales and Margin
Strengths
– Stock is trading at 0.60 times its book value
Weakness
– has low interest coverage ratio.
-Promoter holding has decreased over last quarter: -0.97%
-The company has delivered a poor sales growth of -6.32% over past five years.
-Promoter holding is low: 27.25%
– has a low return on equity of -19.85% for last 3 years.
-Contingent liabilities of Rs.107.83 Cr.
-Promoters have pledged 99.85% of their holding.
-‘s cost of borrowing seems high
Competition
– The industry trades at a mean P/E of 35.5x. JCT trades at the industry’s max P/E of 68.02x. 500223 trades at a P/E of 68.0x
– Industry’s mean G-Factor is 3.9 while the mean Piotski score is 8.0. 500223 has a G-Factor of 4 and Piotski scoreof 4.
– Average 1 month return for industry is 31.0%. The max 1- month return was given by Lux Industries: a return of 73.46 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 206.15 cr compared to Rs 151.99 cr for period ended Mar 2020, a rise of 35.6%
Operating Profits reported at Rs 24.05 cr for period ended Mar 2021 vis-vis 4.54 for period ended Mar 2020 .
Operating Margins expanded 867.9 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 0.07 compared to Rs 0.13 for previous quarter ended Dec 2020 and Rs -0.07 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 657.0 cr for period ended Mar 2021 vis-vis sales of Rs 693.0 cr for the period ended Mar 2020, a fall of 5.5%. The 3 year sales cagr stood at -4.7%.
Net Profit reported at Rs 15.0 cr for period ended Mar 2021 vis-vis sales of Rs -45.0 cr for the period ended Mar 2020, 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 30% on a 1 Year basis vis-vis a return of -1% over the last 3 Years. – The compounded sales growth on a TTM bassis is -21% vis-vis a compounded sales growth of -5% over the last 3 Years. – The compounded profit growth on a TTM basis is 107% vis-vis a compounded profit growth of % over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2021 fii holding stood at 6.47% vis-vis 6.47% for Dec 2020 – Public shareholding has risen for the period ended Mar 2021. The Mar 2021 public holding stood at 36.62% vis-vis 29.04% for Dec 2020
Conclusion
– Stock is trading at 0.60 times its book value – has low interest coverage ratio.
-Promoter holding has decreased over last quarter: -0.97%
-The company has delivered a poor sales growth of -6.32% over past five years.
-Promoter holding is low: 27.25%
– has a low return on equity of -19.85% for last 3 years.
-Contingent liabilities of Rs.107.83 Cr.
-Promoters have pledged 99.85% of their holding.
-‘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 1.33 and is trading at 2.17 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
