Mehabe score: 3 G Factor: 2 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 2 and Piotski score of 5.
Description
Jumbo Bag is engaged in the Business of Flexible Intermediate Bulk Container.Site:516078Main Symbol:JUMBO
Stock trades at 16.5, above its 50dma 13.41. It also trades above its 200dma 10.71. The stock remains bullish on techicals
The 52 week high is at 18.54 and the 52week low is at 6.85
Price Chart
P/E Chart
Sales and Margin
Strengths
– Stock is trading at 0.45 times its book value
Weakness
– Though the company is reporting repeated profits, it is not paying out dividend
– has low interest coverage ratio.
-The company has delivered a poor sales growth of -0.02% over past five years.
– has a low return on equity of 3.79% for last 3 years.
-Contingent liabilities of Rs.15.26 Cr.
– might be capitalizing the interest cost
-Promoters have pledged 40.00% of their holding.
– has high debtors of 155.25 days.
Competition
– The industry trades at a mean P/E of 17.6x. Jumbo Bag trades at the industry’s max P/E of 44.58x. 516078 trades at a P/E of 44.6x
– Industry’s mean G-Factor is 5.0 while the mean Piotski score is 9.0. 516078 has a G-Factor of 2 and Piotski scoreof 5.
– Average 1 month return for industry is 15.2%. The max 1- month return was given by Jumbo Bag: a return of 41.72 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 30.55 cr compared to Rs 16.96 cr for period ended Mar 2020, a rise of 80.1%
Operating Profits reported at Rs 3.82 cr for period ended Mar 2021 vis-vis 0.94 for period ended Mar 2020 .
Operating Margins expanded 696.2 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 2.05 compared to Rs 1.13 for previous quarter ended Dec 2020 and Rs -0.02 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 84.59 cr for period ended Mar 2021 vis-vis sales of Rs 91.84 cr for the period ended Mar 2020, a fall of 8.6%. The 3 year sales cagr stood at -7.2%.
Operating margins shrank to 6.24% for period ended Mar 2021 vis-vis 7.0% for period ended Mar 2020, contraction of 76.0 bps.
Net Profit reported at Rs 0.31 cr for period ended Mar 2021 vis-vis sales of Rs 0.96 cr for the period ended Mar 2020, falling 209.7%.
Company reported a poor Net Profit CAGR of -34.2% 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 stock has given a return of 131% on a 1 Year basis vis-vis a return of 8% over the last 3 Years. – The compounded sales growth on a TTM bassis is -8% vis-vis a compounded sales growth of -7% over the last 3 Years. – The compounded profit growth on a TTM basis is -65% vis-vis a compounded profit growth of -35% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Jun 2021 public holding stood at 56.5% vis-vis 56.5% for Mar 2021
Conclusion
– Stock is trading at 0.45 times its book value – Though the company is reporting repeated profits, it is not paying out dividend
– has low interest coverage ratio.
-The company has delivered a poor sales growth of -0.02% over past five years.
– has a low return on equity of 3.79% for last 3 years.
-Contingent liabilities of Rs.15.26 Cr.
– might be capitalizing the interest cost
-Promoters have pledged 40.00% of their holding.
– has high debtors of 155.25 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 13.41 and is trading at 16.5 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
