Mehabe score: 2 G Factor: 1 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 1 and Piotski score of 5.
Description
Lactose (India) Limited is a pharmaceutical company. The Company is engaged in the business of manufacturing, trading and carrying out job work, and manufacturing of pharmaceutical products.Site:524202
Market Cap:
Rs 36.0 cr
Price:
31.5
Trading pe:
x
Book-value:
28.0/share
Div yield:
0.00 %
Earning yield:
1.92%
Face-value:
10.0/share
52week high:
41.75
52week low:
16.20
Technical Analysis
Stock trades at 31.5, above its 50dma 29.35. It also trades above its 200dma 26.03. The stock remains bullish on techicals
The 52 week high is at 41.75 and the 52week low is at 16.20
Price Chart
P/E Chart
Sales and Margin
Strengths
– Stock is trading at 1.12 times its book value
-Promoter holding has increased by 6.23% over last quarter.
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 11.08% over past five years.
– has a low return on equity of -0.61% for last 3 years.
-Promoters have pledged 47.15% of their holding.
Competition
– The industry trades at a mean P/E of 22.7x. Sequent Scien. trades at the industry’s max P/E of 65.58x. 524202 trades at a P/E of x
– Industry’s mean G-Factor is 3.9 while the mean Piotski score is 7.0. 524202 has a G-Factor of 1 and Piotski scoreof 5.
– Average 1 month return for industry is -2.0%. The max 1- month return was given by Lactose (India): a return of 8.25 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 10.04 cr compared to Rs 9.92 cr for period ended Mar 2020, a rise of 1.2%
Operating Profits reported at Rs 2.76 cr for period ended Mar 2021 vis-vis 1.92 for period ended Mar 2020 .
Operating Margins expanded 813.5 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 0.26 compared to Rs -0.48 for previous quarter ended Dec 2020 and Rs -0.12 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 34.96 cr for period ended Mar 2021 vis-vis sales of Rs 40.05 cr for the period ended Mar 2020, a fall of 14.6%. The 3 year sales cagr stood at 4.0%.
Operating margins shrank to 17.82% for period ended Mar 2021 vis-vis 23.15% for period ended Mar 2020, contraction of 533.0 bps.
Net Profit reported at Rs -2.48 cr for period ended Mar 2021 vis-vis sales of Rs 0.07 cr for the period ended Mar 2020, falling 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 stock has given a return of 71% on a 1 Year basis vis-vis a return of -22% over the last 3 Years. – The compounded sales growth on a TTM bassis is -11% vis-vis a compounded sales growth of 4% over the last 3 Years. – The compounded profit growth on a TTM basis is -748% vis-vis a compounded profit growth of -71% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has fallen for the period ended Mar 2021. The Mar 2021 public holding stood at 50.18% vis-vis 56.33% for Dec 2020
Conclusion
– Stock is trading at 1.12 times its book value
-Promoter holding has increased by 6.23% over last quarter. – 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 11.08% over past five years.
– has a low return on equity of -0.61% for last 3 years.
-Promoters have pledged 47.15% of their holding.
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 29.35 and is trading at 31.5 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
