Mehabe score: 5 G Factor: 3 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 3 and Piotski score of 4.
Description
Sambandam Spinning Mills is engaged in the business of production of cotton yarn.Site:521240
Market Cap:
Rs 69.9 cr
Price:
164.0
Trading pe:
8.66x
Book-value:
237/share
Div yield:
0.00 %
Earning yield:
5.21%
Face-value:
10.0/share
52week high:
171.60
52week low:
45.20
Technical Analysis
Stock trades at 164.0, above its 50dma 126.54. It also trades above its 200dma 91.6. The stock remains bullish on techicals
The 52 week high is at 171.60 and the 52week low is at 45.20
Price Chart
P/E Chart
Sales and Margin
Strengths
– Stock is trading at 0.69 times its book value
– is expected to give good quarter
– has delivered good profit growth of 78.13% CAGR over last 5 years
Weakness
– The company has delivered a poor sales growth of 2.38% over past five years.
– has a low return on equity of 5.23% for last 3 years.
Competition
– The industry trades at a mean P/E of 12.3x. Arvind Ltd trades at the industry’s max P/E of 903.81x. 521240 trades at a P/E of 8.66x
– Industry’s mean G-Factor is 4.9 while the mean Piotski score is 8.0. 521240 has a G-Factor of 3 and Piotski scoreof 4.
– Average 1 month return for industry is 11.0%. The max 1- month return was given by Sambandam Spg.: a return of 29.64 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 80.84 cr compared to Rs 45.12 cr for period ended Mar 2020, a rise of 79.2%
Operating Profits reported at Rs 17.27 cr for period ended Mar 2021 vis-vis 3.37 for period ended Mar 2020 .
Operating Margins expanded 1389.4 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 21.64 compared to Rs 8.47 for previous quarter ended Dec 2020 and Rs -2.98 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 231.0 cr for period ended Mar 2021 vis-vis sales of Rs 191.0 cr for the period ended Mar 2020, a healthy growth of 17.3%. The 3 year sales cagr stood at 6.2%.
Operating margins expanded to 14.0% for period ended Mar 2021 vis-vis 11.0% for period ended Mar 2020, expansion of 300.0 bps.
Net Profit reported at Rs 8.0 cr for period ended Mar 2021 vis-vis sales of Rs 2.0 cr for the period ended Mar 2020, rising 75.0%.
Company recorded a healthy Net Profit CAGR of 38.7% 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 stock has given a return of 178% on a 1 Year basis vis-vis a return of 16% over the last 3 Years. – The compounded sales growth on a TTM bassis is 21% vis-vis a compounded sales growth of 6% over the last 3 Years. – The compounded profit growth on a TTM basis is 249% vis-vis a compounded profit growth of 107% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Mar 2021 public holding stood at 48.19% vis-vis 48.19% for Dec 2020
Conclusion
– Stock is trading at 0.69 times its book value
– is expected to give good quarter
– has delivered good profit growth of 78.13% CAGR over last 5 years – The company has delivered a poor sales growth of 2.38% over past five years.
– has a low return on equity of 5.23% for last 3 years.
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 126.54 and is trading at 164.0 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
