Mehabe score: 5 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
Rajkumar Forge is engaged in the business of manufacturing and selling open die forgings in both domestic and international markets.Site:513369
Market Cap:
Rs 67.9 cr
Price:
62.1
Trading pe:
19.0x
Book-value:
24.4/share
Div yield:
0.00 %
Earning yield:
8.11%
Face-value:
10.0/share
52week high:
68.90
52week low:
21.25
Technical Analysis
Stock trades at 62.1, above its 50dma 52.24. It also trades above its 200dma 39.89. The stock remains bullish on techicals
The 52 week high is at 68.90 and the 52week low is at 21.25
Price Chart
P/E Chart
Sales and Margin
Strengths
–
Weakness
– Though the company is reporting repeated profits, it is not paying out dividend
-Debtor days have increased from 109.12 to 134.34 days.
Competition
– The industry trades at a mean P/E of 43.1x. Bharat Forge trades at the industry’s max P/E of 446.04x. 513369 trades at a P/E of 19.0x
– Industry’s mean G-Factor is 2.8 while the mean Piotski score is 8.0. 513369 has a G-Factor of 3 and Piotski scoreof 7.
– Average 1 month return for industry is 11.0%. The max 1- month return was given by M M Forgings: a return of 42.62 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 9.7 cr compared to Rs 12.45 cr for period ended Mar 2020, a fall of 22.1%
Operating Profits reported at Rs 1.28 cr for period ended Mar 2021 vis-vis 1.79 for period ended Mar 2020 .
Operating Margins contracted -118.2 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 0.63 compared to Rs 0.73 for previous quarter ended Dec 2020 and Rs 0.37 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 40.62 cr for period ended Mar 2021 vis-vis sales of Rs 50.88 cr for the period ended Mar 2020, a fall of 25.3%. The 3 year sales cagr stood at 11.7%.
Operating margins expanded to 16.17% for period ended Mar 2021 vis-vis 14.62% for period ended Mar 2020, expansion of 155.0 bps.
Net Profit reported at Rs 3.58 cr for period ended Mar 2021 vis-vis sales of Rs 4.57 cr for the period ended Mar 2020, falling 27.7%.
Company recorded a healthy Net Profit CAGR of 102.7% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
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 13.0% compared to 15.0% over the last 3 Years. – The stock has given a return of 170% on a 1 Year basis vis-vis a return of 20% over the last 3 Years. – The compounded sales growth on a TTM bassis is -20% vis-vis a compounded sales growth of 12% over the last 3 Years. – The compounded profit growth on a TTM basis is -22% vis-vis a compounded profit growth of 103% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Mar 2021 public holding stood at 27.55% vis-vis 27.55% for Dec 2020
Conclusion
– – Though the company is reporting repeated profits, it is not paying out dividend
-Debtor days have increased from 109.12 to 134.34 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 52.24 and is trading at 62.1 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
