Mehabe score: 3 G Factor: 3 Piotski Score: 3 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 3.
Description
Rishi Laser is engaged in manufacturing of Fabrication of sheet Metal components and machines.Site:526861
Market Cap:
Rs 14.4 cr
Price:
15.7
Trading pe:
x
Book-value:
32.6/share
Div yield:
0.00 %
Earning yield:
-17.23%
Face-value:
10.0/share
52week high:
16.50
52week low:
5.70
Technical Analysis
Stock trades at 15.7, above its 50dma 14.17. It also trades above its 200dma 11.59. The stock remains bullish on techicals
The 52 week high is at 16.50 and the 52week low is at 5.70
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
-Stock is trading at 0.48 times its book value
Weakness
– has low interest coverage ratio.
-The company has delivered a poor sales growth of -1.82% over past five years.
-Promoter holding is low: 15.84%
– has a low return on equity of 0.97% for last 3 years.
-Promoters have pledged 37.70% of their holding.
-‘s cost of borrowing seems high
Competition
– The industry trades at a mean P/E of 20.6x. GMM Pfaudler trades at the industry’s max P/E of 93.18x. 526861 trades at a P/E of x
– Industry’s mean G-Factor is 3.4 while the mean Piotski score is 8.0. 526861 has a G-Factor of 3 and Piotski scoreof 3.
– Average 1 month return for industry is -0.7%. The max 1- month return was given by BEML Ltd: a return of 2.19 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 28.27 cr compared to Rs 21.15 cr for period ended Mar 2020, a rise of 33.7%
Company reported operating profit of Rs 2.25 cr for period ended Mar 2021, operating profit margin at 8.0 %.
Operating profit was negative for the same period last year thus company has improved its margins this year
The EPS for Mar 2021 was Rs 2.43 compared to Rs -0.75 for previous quarter ended Dec 2020 and Rs -3.33 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 74.58 cr for period ended Mar 2021 vis-vis sales of Rs 91.97 cr for the period ended Mar 2020, a fall of 23.3%. The 3 year sales cagr stood at -14.8%.
Operating margins expanded to 2.27% for period ended Mar 2021 vis-vis -2.81% for period ended Mar 2020, expansion of 508.0 bps.
Net Profit reported at Rs -2.21 cr for period ended Mar 2021 vis-vis sales of Rs -2.33 cr for the period ended Mar 2020, rising 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 company has worsened on its Return on Equity (RoE) metric. The RoE on Last Year basis was -7.0% compared to 1.0% over the last 3 Years. – The stock has given a return of 151% on a 1 Year basis vis-vis a return of -11% over the last 3 Years. – The compounded sales growth on a TTM bassis is -37% vis-vis a compounded sales growth of -1% over the last 3 Years. – The compounded profit growth on a TTM basis is -575% vis-vis a compounded profit growth of % over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Mar 2021 public holding stood at 84.16% vis-vis 84.16% for Dec 2020
Conclusion
– has reduced debt.
-Stock is trading at 0.48 times its book value – has low interest coverage ratio.
-The company has delivered a poor sales growth of -1.82% over past five years.
-Promoter holding is low: 15.84%
– has a low return on equity of 0.97% for last 3 years.
-Promoters have pledged 37.70% of their holding.
-‘s cost of borrowing seems high
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 14.17 and is trading at 15.7 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
