Mehabe score: 3 G Factor: 1 Piotski Score: 6 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 1 and Piotski score of 6.
Description
Zenith Fibres is engaged in manufacturing of Manmade Fibres.Site:514266
Market Cap:
Rs 24.9 cr
Price:
63.2
Trading pe:
36.1x
Book-value:
123/share
Div yield:
0.00 %
Earning yield:
13.46%
Face-value:
10.0/share
52week high:
64.30
52week low:
28.00
Technical Analysis
Stock trades at 63.2, above its 50dma 46.0. It also trades above its 200dma 41.02. The stock remains bullish on techicals
The 52 week high is at 64.30 and the 52week low is at 28.00
Price Chart
P/E Chart
Sales and Margin
Strengths
– is almost debt free.
-Stock is trading at 0.51 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 -17.82% over past five years.
– has a low return on equity of 2.69% for last 3 years.
-Earnings include an other income of Rs.2.06 Cr.
-Debtor days have increased from 29.18 to 42.25 days.
-Promoter holding has decreased over last 3 years: -4.06%
Competition
– The industry trades at a mean P/E of 17.1x. Zenith Fibres trades at the industry’s max P/E of 36.13x. 514266 trades at a P/E of 36.1x
– Industry’s mean G-Factor is 5.1 while the mean Piotski score is 7.0. 514266 has a G-Factor of 1 and Piotski scoreof 6.
– Average 1 month return for industry is 19.1%. The max 1- month return was given by Zenith Fibres: a return of 47.15 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 10.84 cr compared to Rs 6.58 cr for period ended Mar 2020, a rise of 64.7%
Operating Profits reported at Rs 0.18 cr for period ended Mar 2021 vis-vis 0.69 for period ended Mar 2020 .
Operating Margins contracted -882.6 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 1.01 compared to Rs 0.71 for previous quarter ended Dec 2020 and Rs 0.76 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 23.93 cr for period ended Mar 2021 vis-vis sales of Rs 28.37 cr for the period ended Mar 2020, a fall of 18.6%. The 3 year sales cagr stood at -12.9%.
Operating margins shrank to -0.21% for period ended Mar 2021 vis-vis 6.06% for period ended Mar 2020, contraction of 627.0 bps.
Net Profit reported at Rs 0.69 cr for period ended Mar 2021 vis-vis sales of Rs 1.98 cr for the period ended Mar 2020, falling 187.0%.
Company reported a poor Net Profit CAGR of -40.0% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities: Rs 0.0 cr for period ended Mar 2021 vis-vis Rs -1.34 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 1.0% compared to 3.0% over the last 3 Years. – The stock has given a return of 94% on a 1 Year basis vis-vis a return of -4% over the last 3 Years. – The compounded sales growth on a TTM bassis is -16% vis-vis a compounded sales growth of -13% over the last 3 Years. – The compounded profit growth on a TTM basis is -62% vis-vis a compounded profit growth of -40% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Mar 2021 public holding stood at 53.68% vis-vis 53.67% for Dec 2020
Conclusion
– is almost debt free.
-Stock is trading at 0.51 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 -17.82% over past five years.
– has a low return on equity of 2.69% for last 3 years.
-Earnings include an other income of Rs.2.06 Cr.
-Debtor days have increased from 29.18 to 42.25 days.
-Promoter holding has decreased over last 3 years: -4.06%
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 46.0 and is trading at 63.2 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
