Mehabe score: 2 G Factor: 2 Piotski Score: 7 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 2 and Piotski score of 7.
Description
Formerly known as Duroflex Engineering, Veritas (India) Limited (VIL) was established in 1985 and is based in Mumbai. The company is focused on Trading & Distribution of Chemicals, Logistics, Development of Software and Power Generation (Wind Energy). The company has established overseas subsidiaries and offices.Site:512229Main Symbol:VERITAS
Stock trades at 104.0, below its 50dma 129.46 and below its 200dma 112.43. The stock remains bearish on technicals
The 52 week high is at 187.50 and the 52week low is at 36.15
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
– is almost debt free.
-Stock is trading at 0.14 times its book value
Weakness
– The company has delivered a poor sales growth of 5.20% over past five years.
-Tax rate seems low
– has a low return on equity of 5.32% for last 3 years.
-Contingent liabilities of Rs.395.31 Cr.
– has high debtors of 177.77 days.
Competition
– The industry trades at a mean P/E of 30.9x. Adani Enterp. trades at the industry’s max P/E of 167.47x. 512229 trades at a P/E of 2.2x
– Industry’s mean G-Factor is 3.4 while the mean Piotski score is 7.0. 512229 has a G-Factor of 2 and Piotski scoreof 7.
– Average 1 month return for industry is -6.7%. The max 1- month return was given by Adani Enterp.: a return of 14.55 %
Quarterly Results
Sales for period ended Sep 2021 is Rs 827.0 cr compared to Rs 608.0 cr for period ended Sep 2020, a rise of 36.0%
Operating Profits reported at Rs 47.0 cr for period ended Sep 2021 vis-vis 50.0 for period ended Sep 2020 .
Operating Margins contracted -254.0 bps for period ended Sep 2021 vis-vis Sep 2020 .
The EPS for Sep 2021 was Rs 12.79 compared to Rs 12.54 for previous quarter ended Jun 2021 and Rs 13.5 for Sep 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 2007.0 cr for period ended TTM vis-vis sales of Rs 1876.0 cr for the period ended Mar 2021, a growth of 6.5%. The 3 year sales cagr stood at 2.3%.
Net Profit reported at Rs 126.0 cr for period ended TTM vis-vis sales of Rs 109.0 cr for the period ended Mar 2021, rising 13.5%.
Company recorded a healthy Net Profit CAGR of 42.0% 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 company has had stable/constant Return on Equity (RoE) metric. The RoE on Last Year basis was 6.0% compared to 5.0% over the last 3 Years. – The stock has given a return of 176% on a 1 Year basis vis-vis a return of 14% over the last 3 Years. – The compounded sales growth on a TTM bassis is -5% vis-vis a compounded sales growth of 4% over the last 3 Years. – The compounded profit growth on a TTM basis is -11% vis-vis a compounded profit growth of 17% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Sep 2021 fii holding stood at 9.7% vis-vis 9.7% for Jun 2021 – Public shareholding has remained largely constant. The Sep 2021 public holding stood at 25.08% vis-vis 25.08% for Jun 2021
Conclusion
– has reduced debt.
– is almost debt free.
-Stock is trading at 0.14 times its book value – The company has delivered a poor sales growth of 5.20% over past five years.
-Tax rate seems low
– has a low return on equity of 5.32% for last 3 years.
-Contingent liabilities of Rs.395.31 Cr.
– has high debtors of 177.77 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 129.46 and is trading at 104.0. 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
