Mehabe score: 3 G Factor: 5 Piotski Score: 7 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 5 and Piotski score of 7.
Description
GEE is engaged in the business of manufacturing of Welding Electrodes, Copper Coated Wires, Flux Cored Wires and Welding Fluxes.Site:504028Main Symbol:GEE
Stock trades at 72.6, below its 50dma 78.75. However it is trading above its 200dma 58.96. The stock remains weak in the short term due to near term bearish momentum. However overall bullish structure remains intact. Price action will further build up as it moves above its dma50, currently situated at 78.75.
The 52 week high is at 104.82 and the 52week low is at 22.05
Price Chart
P/E Chart
Sales and Margin
Strengths
– Stock is trading at 1.10 times its book value
– has delivered good profit growth of 22.54% CAGR over last 5 years
Weakness
– Though the company is reporting repeated profits, it is not paying out dividend
-The company has delivered a poor sales growth of 5.91% over past five years.
– has a low return on equity of 5.45% for last 3 years.
Competition
– The industry trades at a mean P/E of 28.9x. Ador Welding trades at the industry’s max P/E of 53.2x. 504028 trades at a P/E of 14.9x
– Industry’s mean G-Factor is 3.1 while the mean Piotski score is 8.0. 504028 has a G-Factor of 5 and Piotski scoreof 7.
– Average 1 month return for industry is 3.7%. The max 1- month return was given by Rasi Electrodes: a return of 9.86 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 55.89 cr compared to Rs 21.74 cr for period ended Jun 2020, a rise of 157.1%
Operating Profits reported at Rs 5.66 cr for period ended Jun 2021 vis-vis 2.58 for period ended Jun 2020 .
Operating Margins contracted -174.0 bps for period ended Jun 2021 vis-vis Jun 2020 .
The EPS for Jun 2021 was Rs 1.05 compared to Rs 1.83 for previous quarter ended Mar 2021 and Rs 0.08 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 287.0 cr for period ended TTM vis-vis sales of Rs 253.0 cr for the period ended Mar 2021, a healthy growth of 11.8%. The 3 year sales cagr stood at 1.6%.
Net Profit reported at Rs 15.0 cr for period ended TTM vis-vis sales of Rs 13.0 cr for the period ended Mar 2021, rising 13.3%.
Company recorded a healthy Net Profit CAGR of 71.0% 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 stock has given a return of 185% on a 1 Year basis vis-vis a return of 37% over the last 3 Years. – The compounded sales growth on a TTM bassis is -7% vis-vis a compounded sales growth of 5% over the last 3 Years. – The compounded profit growth on a TTM basis is 29% vis-vis a compounded profit growth of 55% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Jun 2021 public holding stood at 26.34% vis-vis 25.45% for Mar 2021
Conclusion
– Stock is trading at 1.10 times its book value
– has delivered good profit growth of 22.54% CAGR over last 5 years – Though the company is reporting repeated profits, it is not paying out dividend
-The company has delivered a poor sales growth of 5.91% over past five years.
– has a low return on equity of 5.45% for last 3 years.
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 below its 50 DMA 78.75 and is trading at 72.6. Shows a near term lack of buying interest.
