Mehabe score: 4 G Factor: 3 Piotski Score: 5 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 5.
Description
Premier Synthetics is engaged in the business of manufacturing of Cotton Yarn.Site:509835Main Symbol:PREMSYN
Stock trades at 30.6, above its 50dma 24.31. It also trades above its 200dma 16.29. The stock remains bullish on techicals
The 52 week high is at 41.40 and the 52week low is at 5.50
Price Chart
P/E Chart
Sales and Margin
Strengths
– Stock is trading at 0.43 times its book value
Weakness
– Though the company is reporting repeated profits, it is not paying out dividend
-The company has delivered a poor sales growth of 11.76% over past five years.
– has a low return on equity of 3.22% for last 3 years.
– might be capitalizing the interest cost
-Promoter holding has decreased over last 3 years: -3.06%
Competition
– The industry trades at a mean P/E of 15.7x. Alok Industries trades at the industry’s max P/E of 20.45x. 509835 trades at a P/E of 8.86x
– Industry’s mean G-Factor is 3.5 while the mean Piotski score is 6.0. 509835 has a G-Factor of 3 and Piotski scoreof 5.
– Average 1 month return for industry is 4.3%. The max 1- month return was given by Prem. Synthetic: a return of 33.55 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 12.86 cr compared to Rs 0.37 cr for period ended Jun 2020, a rise of 3375.7%
Company reported operating profit of Rs 0.76 cr for period ended Jun 2021, operating profit margin at 5.9 %.
Operating profit was negative for the same period last year thus company has improved its margins this year
The EPS for Jun 2021 was Rs 1.28 compared to Rs 3.24 for previous quarter ended Mar 2021 and Rs -0.5 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 36.85 cr for period ended TTM vis-vis sales of Rs 24.36 cr for the period ended Mar 2021, a healthy growth of 33.9%. The 3 year sales cagr stood at -7.4%.
Operating margins shrank to 7.9% for period ended TTM vis-vis 8.58% for period ended Mar 2021, contraction of 68.0 bps.
Net Profit reported at Rs 2.41 cr for period ended TTM vis-vis sales of Rs 1.59 cr for the period ended Mar 2021, rising 34.0%.
Company recorded a Net Profit CAGR of 5.2% 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 company has had stable/constant Return on Equity (RoE) metric. The RoE on Last Year basis was 5.0% compared to 3.0% over the last 3 Years. – The stock has given a return of 404% on a 1 Year basis vis-vis a return of -52% over the last 3 Years. – The compounded sales growth on a TTM bassis is -43% vis-vis a compounded sales growth of -19% over the last 3 Years. – The compounded profit growth on a TTM basis is 8050% vis-vis a compounded profit growth of 11% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Jun 2021 public holding stood at 48.52% vis-vis 47.92% for Mar 2021
Conclusion
– Stock is trading at 0.43 times its book value – Though the company is reporting repeated profits, it is not paying out dividend
-The company has delivered a poor sales growth of 11.76% over past five years.
– has a low return on equity of 3.22% for last 3 years.
– might be capitalizing the interest cost
-Promoter holding has decreased over last 3 years: -3.06%
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 24.31 and is trading at 30.6 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
