Mehabe score: 6 G Factor: 3 Piotski Score: 7 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 3 and Piotski score of 7.
Description
Kirloskar Pneumatic Company is engaged in the business of Compression & Transmission segments, primarily serving sectors of oil & gas, engineering, steel, cement, food & beverage by offering engineered products and solutions. The Compression segment is engaged in design, manufacture, supply, and erection / commissioning of wide range of air, gas and refrigeration compressors, packages & systems. The Transmission segment is engaged in design, manufacture and supply of railway traction gears and customized gearboxes for windmill, industrial and marine applications. The Company has also started RoadRailer operations providing logistic services using rail network of Indian Railways with first and last mile operations carried on road.
Main Points
60 % Market Share in Railway Gears & Pinion
65 % Market Share in CNG system for City Gas Distribution
65 % Market Share in OIL & Gas RefrigerationSite:505283
Market Cap:
Rs 2,536 cr
Price:
394.0
Trading pe:
39.7x
Book-value:
91.5/share
Div yield:
0.89 %
Earning yield:
3.42%
Face-value:
2.00/share
52week high:
425.00
52week low:
98.20
Technical Analysis
Stock trades at 394.0, above its 50dma 353.19. It also trades above its 200dma 248.1. The stock remains bullish on techicals
The 52 week high is at 425.00 and the 52week low is at 98.20
Price Chart
P/E Chart
Sales and Margin
Strengths
– is almost debt free.
– has been maintaining a healthy dividend payout of 32.23%
Weakness
– The company has delivered a poor sales growth of 10.10% over past five years.
– has a low return on equity of 11.40% for last 3 years.
-Debtor days have increased from 104.99 to 136.60 days.
Competition
– The industry trades at a mean P/E of 41.4x. Elgi Equipments trades at the industry’s max P/E of 65.09x. 505283 trades at a P/E of 39.7x
– Industry’s mean G-Factor is 3.2 while the mean Piotski score is 7.0. 505283 has a G-Factor of 3 and Piotski scoreof 7.
– Average 1 month return for industry is 8.3%. The max 1- month return was given by Revathi Equipmnt: a return of 21.44 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 415.0 cr compared to Rs 227.0 cr for period ended Mar 2020, a rise of 82.8%
Operating Profits reported at Rs 72.0 cr for period ended Mar 2021 vis-vis 39.0 for period ended Mar 2020 .
Operating Margins expanded 16.9 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 7.83 compared to Rs 2.07 for previous quarter ended Dec 2020 and Rs 3.74 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 823.0 cr for period ended Mar 2021 vis-vis sales of Rs 821.0 cr for the period ended Mar 2020, a growth of 0.2%. The 3 year sales cagr stood at 11.1%.
Operating margins expanded to 14.0% for period ended Mar 2021 vis-vis 11.0% for period ended Mar 2020, expansion of 300.0 bps.
Net Profit reported at Rs 64.0 cr for period ended Mar 2021 vis-vis sales of Rs 53.0 cr for the period ended Mar 2020, rising 17.2%.
Company recorded a Net Profit CAGR of 8.6% 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 57.0 cr for period ended Mar 2021 vis-vis Rs 9.0 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 12.0% compared to 11.0% over the last 3 Years. – The stock has given a return of 268% on a 1 Year basis vis-vis a return of 32% over the last 3 Years. – The compounded sales growth on a TTM bassis is 0% vis-vis a compounded sales growth of 11% over the last 3 Years. – The compounded profit growth on a TTM basis is 19% vis-vis a compounded profit growth of 9% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2021 fii holding stood at 0.0% vis-vis 1.42% for Dec 2020 – Public shareholding has remained largely constant. The Mar 2021 public holding stood at 25.08% vis-vis 23.24% for Dec 2020
Conclusion
– is almost debt free.
– has been maintaining a healthy dividend payout of 32.23% – The company has delivered a poor sales growth of 10.10% over past five years.
– has a low return on equity of 11.40% for last 3 years.
-Debtor days have increased from 104.99 to 136.60 days.
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 353.19 and is trading at 394.0 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
