Mehabe score: 3 G Factor: 1 Piotski Score: 3 The stock has a rating SELL. 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 1 and Piotski score of 3.
Description
Parnax Lab Limited is an India-based holding company. The Company is principally engaged in the business activities of manufacturing and export of pharmaceutical formulations.Site:506128
Market Cap:
Rs 21.9 cr
Price:
25.8
Trading pe:
129.0x
Book-value:
38.3/share
Div yield:
0.00 %
Earning yield:
8.91%
Face-value:
10.0/share
52week high:
39.05
52week low:
14.70
Technical Analysis
Stock trades at 25.8, below its 50dma 26.49. However it is trading above its 200dma 24.76. 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 26.49.
The 52 week high is at 39.05 and the 52week low is at 14.70
Price Chart
P/E Chart
Sales and Margin
Strengths
– Stock is trading at 0.67 times its book value
Weakness
– has low interest coverage ratio.
-The company has delivered a poor sales growth of -1.49% over past five years.
– has a low return on equity of 1.52% for last 3 years.
-Debtor days have increased from 72.43 to 88.39 days.
Competition
– The industry trades at a mean P/E of 30.8x. Parnax Lab trades at the industry’s max P/E of 128.76x. 506128 trades at a P/E of 129.0x
– Industry’s mean G-Factor is 2.0 while the mean Piotski score is 8.0. 506128 has a G-Factor of 1 and Piotski scoreof 3.
– Average 1 month return for industry is 4.9%. The max 1- month return was given by Piramal Enterp.: a return of 33.5 %
Quarterly Results
Sales for period ended Dec 2020 is Rs 24.83 cr compared to Rs 25.46 cr for period ended Dec 2019, a fall of 2.5%
Operating Profits reported at Rs 2.65 cr for period ended Dec 2020 vis-vis 1.22 for period ended Dec 2019 .
Operating Margins expanded 588.1 bps for period ended Dec 2020 vis-vis Dec 2019 .
The EPS for Dec 2020 was Rs 0.14 compared to Rs 2.81 for previous quarter ended Sep 2020 and Rs -0.96 for Dec 2019
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 92.53 cr for period ended TTM vis-vis sales of Rs 95.31 cr for the period ended Mar 2020, a fall of 3.0%. The 3 year sales cagr stood at -4.3%.
Operating margins expanded to 11.55% for period ended TTM vis-vis 6.75% for period ended Mar 2020, expansion of 480.0 bps.
Net Profit reported at Rs 0.17 cr for period ended TTM vis-vis sales of Rs -2.91 cr for the period ended Mar 2020, rising 1811.8%.
Company reported a poor Net Profit CAGR of -45.5% 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 8.75 cr for period ended Mar 2020 vis-vis Rs 8.72 cr for period ended Mar 2019
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 -8.0% compared to 2.0% over the last 3 Years. – The stock has given a return of 43% on a 1 Year basis vis-vis a return of -18% over the last 3 Years. – The compounded sales growth on a TTM bassis is 1% vis-vis a compounded sales growth of 0% over the last 3 Years. – The compounded profit growth on a TTM basis is 116% vis-vis a compounded profit growth of % over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Mar 2021 public holding stood at 37.41% vis-vis 37.41% for Dec 2020
Conclusion
– Stock is trading at 0.67 times its book value – has low interest coverage ratio.
-The company has delivered a poor sales growth of -1.49% over past five years.
– has a low return on equity of 1.52% for last 3 years.
-Debtor days have increased from 72.43 to 88.39 days.
Fundamentally, the stock remains weak. The business fundamentals are on shaky ground. Weak near term results have dampened and questioned business drivers. We suggest to wait for a upturn in business performance.
Technically, the stock reflects the poor fundamentals. The stock remains below its 50 DMA 26.49 and is trading at 25.8. It has shown near term lack of bullish momentum. We suggest to observe price action. However as investors, who like to avoid timing the markets, we suggest to avoid the stock
