Mehabe score: 5 G Factor: 2 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 2 and Piotski score of 4.
Description
Choksi Laboratories to provides contract testing and analytical services. The Company analyzes, for its clients, or as a regulatory requirement pharmaceuticals, food and agricultural products, construction materials, chemicals, Calibration and environment Monitoring services.Site:526546Main Symbol:CHOKSILA
Stock trades at 20.6, above its 50dma 17.42. It also trades above its 200dma 13.69. The stock remains bullish on techicals
The 52 week high is at 21.25 and the 52week low is at 7.00
Price Chart
P/E Chart
Sales and Margin
Strengths
– Stock is trading at 0.91 times its book value
Weakness
– has low interest coverage ratio.
-The company has delivered a poor sales growth of 0.47% over past five years.
-Promoter holding is low: 31.48%
– has a low return on equity of -2.75% for last 3 years.
Competition
– The industry trades at a mean P/E of 27.2x. PB Fintech. trades at the industry’s max P/E of 89.42x. 526546 trades at a P/E of x
– Industry’s mean G-Factor is 3.6 while the mean Piotski score is 9.0. 526546 has a G-Factor of 2 and Piotski scoreof 4.
– Average 1 month return for industry is 3.2%. The max 1- month return was given by Century Plyboard: a return of 20.28 %
Quarterly Results
Sales for period ended Sep 2021 is Rs 7.21 cr compared to Rs 7.37 cr for period ended Sep 2020, a fall of 2.2%
Operating Profits reported at Rs 1.75 cr for period ended Sep 2021 vis-vis 1.14 for period ended Sep 2020 .
Operating Margins expanded 880.4 bps for period ended Sep 2021 vis-vis Sep 2020 .
The EPS for Sep 2021 was Rs -0.76 compared to Rs -2.21 for previous quarter ended Jun 2021 and Rs -0.55 for Sep 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 26.29 cr for period ended TTM vis-vis sales of Rs 25.69 cr for the period ended Mar 2021, a growth of 2.3%. The 3 year sales cagr stood at -8.0%.
Operating margins expanded to 17.27% for period ended TTM vis-vis 16.04% for period ended Mar 2021, expansion of 123.0 bps.
Net Profit reported at Rs -3.54 cr for period ended TTM vis-vis sales of Rs -2.61 cr for the period ended Mar 2021, falling 0%.
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 5.93 cr for period ended Mar 2021 vis-vis Rs 2.87 cr for period ended Mar 2020
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 -14.0% compared to -3.0% over the last 3 Years. – The stock has given a return of 100% 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 6% vis-vis a compounded sales growth of -5% over the last 3 Years. – The compounded profit growth on a TTM basis is -39% vis-vis a compounded profit growth of % over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Sep 2021 public holding stood at 68.52% vis-vis 68.52% for Jun 2021
Conclusion
– Stock is trading at 0.91 times its book value – has low interest coverage ratio.
-The company has delivered a poor sales growth of 0.47% over past five years.
-Promoter holding is low: 31.48%
– has a low return on equity of -2.75% 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 17.42 and is trading at 20.6 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
