Mehabe score: 4 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
IP Rings is a front line automotive components manufacturer, specializing in the production of piston rings in high carbon high alloy steels and nodular iron with a variety of surface coatings that find application in present day high performance low emission engines. It also produces a series of transmission parts and other components for automotive and related industries employing a unique Precision Forging technology. The company, established in 1991, is located in Chennai.
Main Points
Products
Piston Rings, Turbocharger Rings, Piston Pins
Orbital Cold Formed Components:
Differential Gear & Pinion
Synchrocone
Pole Wheel
Rotor Shaft
Diffcase
Other Transmission Components
These products are used in compressors and industrial enginesSite:523638Main Symbol:IPRINGLTD
Stock trades at 156.0, above its 50dma 105.08. It also trades above its 200dma 81.75. The stock remains bullish on techicals
The 52 week high is at 150.80 and the 52week low is at 37.00
Price Chart
P/E Chart
Sales and Margin
Strengths
– is expected to give good quarter
Weakness
– has low interest coverage ratio.
-The company has delivered a poor sales growth of 10.93% over past five years.
– has a low return on equity of 4.65% for last 3 years.
-Debtor days have increased from 86.38 to 103.91 days.
Competition
– The industry trades at a mean P/E of 32.5x. WABCO India trades at the industry’s max P/E of 129.35x. 523638 trades at a P/E of 39.8x
– Industry’s mean G-Factor is 4.0 while the mean Piotski score is 7.0. 523638 has a G-Factor of 4 and Piotski scoreof 7.
– Average 1 month return for industry is 8.7%. The max 1- month return was given by IP Rings: a return of 65.83 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 76.0 cr compared to Rs 45.12 cr for period ended Mar 2020, a rise of 68.4%
Operating Profits reported at Rs 10.37 cr for period ended Mar 2021 vis-vis 5.24 for period ended Mar 2020 .
Operating Margins expanded 203.1 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 3.23 compared to Rs 3.29 for previous quarter ended Dec 2020 and Rs -0.86 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 198.0 cr for period ended Mar 2021 vis-vis sales of Rs 198.0 cr for the period ended Mar 2020, The 3 year sales cagr stood at -0.8%.
Operating margins expanded to 12.0% for period ended Mar 2021 vis-vis 11.0% for period ended Mar 2020, expansion of 100.0 bps.
Net Profit reported at Rs 5.0 cr for period ended Mar 2021 vis-vis sales of Rs 1.0 cr for the period ended Mar 2020, rising 80.0%.
Company reported a poor Net Profit CAGR of -10.6% 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 had stable/constant Return on Equity (RoE) metric. The RoE on Last Year basis was 5.0% compared to 5.0% over the last 3 Years. – The stock has given a return of 228% 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 0% vis-vis a compounded sales growth of -1% over the last 3 Years. – The compounded profit growth on a TTM basis is 340% vis-vis a compounded profit growth of -12% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Mar 2021 public holding stood at 43.42% vis-vis 43.42% for Dec 2020
Conclusion
– is expected to give good quarter – has low interest coverage ratio.
-The company has delivered a poor sales growth of 10.93% over past five years.
– has a low return on equity of 4.65% for last 3 years.
-Debtor days have increased from 86.38 to 103.91 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 105.08 and is trading at 156.0, thus bullish price action wise.
