Mehabe score: 2 G Factor: 2 Piotski Score: 4 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 2 and Piotski score of 4.
Description
Winsome Textile Industries is engaged in the manufacturing of Cotton Yarn, Cotton Melange, Cotton Blended Dyed Yarn/Fiber, Yarn made of natural and manmade fiber and other fibers, Knitted Fabric and Power generation in Textile Sector.Site:514470
Market Cap:
Rs 76.1 cr
Price:
38.4
Trading pe:
x
Book-value:
89.6/share
Div yield:
0.00 %
Earning yield:
6.68%
Face-value:
10.0/share
52week high:
41.00
52week low:
11.67
Technical Analysis
Stock trades at 38.4, above its 50dma 33.69. It also trades above its 200dma 26.42. The stock remains bullish on techicals
The 52 week high is at 41.00 and the 52week low is at 11.67
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
-Stock is trading at 0.43 times its book value
Weakness
– has low interest coverage ratio.
-The company has delivered a poor sales growth of 0.39% over past five years.
– has a low return on equity of 2.60% for last 3 years.
-Contingent liabilities of Rs.36.68 Cr.
-‘s cost of borrowing seems high
Competition
– The industry trades at a mean P/E of 12.2x. Sangam India trades at the industry’s max P/E of 88.66x. 514470 trades at a P/E of x
– Industry’s mean G-Factor is 3.4 while the mean Piotski score is 8.0. 514470 has a G-Factor of 2 and Piotski scoreof 4.
– Average 1 month return for industry is 28.9%. The max 1- month return was given by Banswara Syntex: a return of 52.1 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 192.19 cr compared to Rs 154.58 cr for period ended Mar 2020, a rise of 24.3%
Operating Profits reported at Rs 25.22 cr for period ended Mar 2021 vis-vis 9.51 for period ended Mar 2020 .
Operating Margins expanded 697.0 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 3.09 compared to Rs 1.1 for previous quarter ended Dec 2020 and Rs -3.9 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 624.0 cr for period ended Mar 2021 vis-vis sales of Rs 662.0 cr for the period ended Mar 2020, a fall of 6.1%. The 3 year sales cagr stood at -3.7%.
Operating margins shrank to 9.0% for period ended Mar 2021 vis-vis 10.0% for period ended Mar 2020, contraction of 100.0 bps.
Net Profit reported at Rs -1.0 cr for period ended Mar 2021 vis-vis sales of Rs -3.0 cr for the period ended Mar 2020, rising 0%.
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 worsened on its Return on Equity (RoE) metric. The RoE on Last Year basis was -2.0% compared to 3.0% over the last 3 Years. – The stock has given a return of 164% on a 1 Year basis vis-vis a return of 3% over the last 3 Years. – The compounded sales growth on a TTM bassis is -16% vis-vis a compounded sales growth of -2% over the last 3 Years. – The compounded profit growth on a TTM basis is -253% vis-vis a compounded profit growth of % over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2021 fii holding stood at 32.54% vis-vis 32.54% for Dec 2020 – Public shareholding has remained largely constant. The Mar 2021 public holding stood at 11.76% vis-vis 11.76% for Dec 2020
Conclusion
– has reduced debt.
-Stock is trading at 0.43 times its book value – has low interest coverage ratio.
-The company has delivered a poor sales growth of 0.39% over past five years.
– has a low return on equity of 2.60% for last 3 years.
-Contingent liabilities of Rs.36.68 Cr.
-‘s cost of borrowing seems high
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 33.69 and is trading at 38.4 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
