Mehabe score: 5 G Factor: 6 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 6 and Piotski score of 4.
Description
Reliance Chemotex Industries is primarily engaged in the manufacturing and sale of Synthetic & blended Yarn.Site:503162Main Symbol:RELCHEMQ
Stock trades at 151.0, above its 50dma 119.12. It also trades above its 200dma 90.69. The stock remains bullish on techicals
The 52 week high is at 151.00 and the 52week low is at 47.95
Price Chart
P/E Chart
Sales and Margin
Strengths
– Stock is trading at 1.09 times its book value
– has delivered good profit growth of 22.52% CAGR over last 5 years
Weakness
– The company has delivered a poor sales growth of -0.12% over past five years.
– has a low return on equity of 7.08% for last 3 years.
Competition
– The industry trades at a mean P/E of 12.9x. Banswara Syntex trades at the industry’s max P/E of 29.1x. 503162 trades at a P/E of 16.4x
– Industry’s mean G-Factor is 5.1 while the mean Piotski score is 8.0. 503162 has a G-Factor of 6 and Piotski scoreof 4.
– Average 1 month return for industry is 40.0%. The max 1- month return was given by Deepak Spinners: a return of 93.25 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 81.32 cr compared to Rs 69.28 cr for period ended Mar 2020, a rise of 17.4%
Operating Profits reported at Rs 11.31 cr for period ended Mar 2021 vis-vis 6.99 for period ended Mar 2020 .
Operating Margins expanded 381.9 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 7.66 compared to Rs 3.35 for previous quarter ended Dec 2020 and Rs 2.05 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 256.0 cr for period ended Mar 2021 vis-vis sales of Rs 300.0 cr for the period ended Mar 2020, a fall of 17.2%. The 3 year sales cagr stood at -3.5%.
Net Profit reported at Rs 7.0 cr for period ended Mar 2021 vis-vis sales of Rs 9.0 cr for the period ended Mar 2020, falling 28.6%.
Company recorded a healthy Net Profit CAGR of 32.6% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 27.0 cr for period ended Mar 2021 vis-vis Rs 22.0 cr for period ended Mar 2020
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 7.0% compared to 7.0% over the last 3 Years. – The stock has given a return of 115% on a 1 Year basis vis-vis a return of 35% over the last 3 Years. – The compounded sales growth on a TTM bassis is -15% vis-vis a compounded sales growth of -4% over the last 3 Years. – The compounded profit growth on a TTM basis is -25% vis-vis a compounded profit growth of 39% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Jun 2021 public holding stood at 27.35% vis-vis 27.34% for Mar 2021
Conclusion
– Stock is trading at 1.09 times its book value
– has delivered good profit growth of 22.52% CAGR over last 5 years – The company has delivered a poor sales growth of -0.12% over past five years.
– has a low return on equity of 7.08% for last 3 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 119.12 and is trading at 151.0 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
