Mehabe score: 5 G Factor: 4 Piotski Score: 7 The stock has a rating 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 4 and Piotski score of 7.
Description
Incorporated in 1986, Bharat Seats Limited (BSL) is a joint-venture (JV) between the Indian promoters Relan Group (25.9%), Maruti Suzuki India Limited (14.81%) and Suzuki Motors Corporation (14.81%) involved in manufacturing of cars seats floor carpets for MSIL and two-wheeler seats for Suzuki Motorcycle India Private Limited (SMIPL). BSL is promoted by Mr. Rohit Relan and his family. BSL is the sole supplier for seat sets for several key models of MSIL.
Main Points
Products
Car Seats Assemblies (82% in FY20 vs 89% in FY18)
Carpet Sets for Automobiles (2% in FY20 vs 2% in FY18)
Motorcycle seats (7% in FY20 vs 3% in FY18)
Other sales & traded goods (9% in FY20 vs 6% in FY18)###Site:523229Main Symbol:BHARATSE
Stock trades at 91.4, above its 50dma 81.85. It also trades above its 200dma 74.0. The stock remains bullish on techicals
The 52 week high is at 94.40 and the 52week low is at 44.15
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
– is expected to give good quarter
– has been maintaining a healthy dividend payout of 19.95%
Weakness
– The company has delivered a poor sales growth of -4.79% over past five years.
– has a low return on equity of 12.29% for last 3 years.
-Debtor days have increased from 36.29 to 55.05 days.
Competition
– The industry trades at a mean P/E of 32.3x. WABCO India trades at the industry’s max P/E of 129.15x. 523229 trades at a P/E of 18.2x
– Industry’s mean G-Factor is 3.9 while the mean Piotski score is 7.0. 523229 has a G-Factor of 4 and Piotski scoreof 7.
– Average 1 month return for industry is 3.6%. The max 1- month return was given by Bharat Seats: a return of 15.32 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 168.24 cr compared to Rs 21.57 cr for period ended Jun 2020, a rise of 680.0%
Company reported operating profit of Rs 4.18 cr for period ended Jun 2021, operating profit margin at 2.5 %.
Operating profit was negative for the same period last year thus company has improved its margins this year
The EPS for Jun 2021 was Rs 0.14 compared to Rs 1.72 for previous quarter ended Mar 2021 and Rs -3.35 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 694.0 cr for period ended TTM vis-vis sales of Rs 548.0 cr for the period ended Mar 2021, a healthy growth of 21.0%. The 3 year sales cagr stood at -8.4%.
Operating margins expanded to 6.0% for period ended TTM vis-vis 5.0% for period ended Mar 2021, expansion of 100.0 bps.
Net Profit reported at Rs 16.0 cr for period ended TTM vis-vis sales of Rs 5.0 cr for the period ended Mar 2021, rising 68.8%.
Company reported a poor Net Profit CAGR of -8.7% 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 company has worsened on its Return on Equity (RoE) metric. The RoE on Last Year basis was 4.0% compared to 12.0% over the last 3 Years. – The stock has given a return of 102% on a 1 Year basis vis-vis a return of -18% over the last 3 Years. – The compounded sales growth on a TTM bassis is 58% vis-vis a compounded sales growth of -17% over the last 3 Years. – The compounded profit growth on a TTM basis is 975% vis-vis a compounded profit growth of -45% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Jun 2021 fii holding stood at 0.0% vis-vis 0.0% for Mar 2021 – Public shareholding has remained largely constant. The Jun 2021 public holding stood at 25.3% vis-vis 25.3% for Mar 2021
Conclusion
– has reduced debt.
– is expected to give good quarter
– has been maintaining a healthy dividend payout of 19.95% – The company has delivered a poor sales growth of -4.79% over past five years.
– has a low return on equity of 12.29% for last 3 years.
-Debtor days have increased from 36.29 to 55.05 days.
The business fundamentals of the stock remain stable. Stronger near term results will build interest in the stock. We suggest to wait for a upturn in business performance.
Technically, the stock remains above its 50 DMA 81.85 and is trading at 91.4, thus bullish price action wise.
