Mehabe score: 6 G Factor: 3 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 3 and Piotski score of 5.
Description
Laurel Organics Ltd. is engaged in manufacture of bulk drugs such as Ciprofloxacin and Norfloxacin.Site:530313
Market Cap:
Rs 239 cr
Price:
50.6
Trading pe:
46.9x
Book-value:
2.83/share
Div yield:
0.00 %
Earning yield:
3.40%
Face-value:
1.00/share
52week high:
64.45
52week low:
22.15
Technical Analysis
Stock trades at 50.6, above its 50dma 44.85. It also trades above its 200dma 41.15. The stock remains bullish on techicals
The 52 week high is at 64.45 and the 52week low is at 22.15
Price Chart
P/E Chart
Sales and Margin
Strengths
– has delivered good profit growth of 26.66% CAGR over last 5 years
– has a good return on equity (ROE) track record: 3 Years ROE 42.41%
Weakness
– Stock is trading at 17.91 times its book value
-Though the company is reporting repeated profits, it is not paying out dividend
-Tax rate seems low
Competition
– The industry trades at a mean P/E of 24.3x. Sequent Scien. trades at the industry’s max P/E of 65.33x. 530313 trades at a P/E of 46.9x
– Industry’s mean G-Factor is 4.0 while the mean Piotski score is 7.0. 530313 has a G-Factor of 3 and Piotski scoreof 5.
– Average 1 month return for industry is -0.1%. The max 1- month return was given by Kimia Bioscien.: a return of 17.95 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 36.01 cr compared to Rs 21.25 cr for period ended Mar 2020, a rise of 69.5%
Company reported negative operating profit of Rs -0.08 cr for period ended Mar 2021. For same period last year, operating profit was 0.66
The EPS for Mar 2021 was Rs -0.19 compared to Rs 0.09 for previous quarter ended Dec 2020 and Rs -0.17 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 133.0 cr for period ended Mar 2021 vis-vis sales of Rs 106.0 cr for the period ended Mar 2020, a healthy growth of 20.3%. The 3 year sales cagr stood at 20.5%.
Operating margins expanded to 6.0% for period ended Mar 2021 vis-vis 4.0% for period ended Mar 2020, expansion of 200.0 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 recorded a healthy Net Profit CAGR of 35.7% over the last 3 years
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 38.0% compared to 42.0% over the last 3 Years. – The stock has given a return of 100% on a 1 Year basis vis-vis a return of 8% over the last 3 Years. – The compounded sales growth on a TTM bassis is 25% vis-vis a compounded sales growth of 20% over the last 3 Years. – The compounded profit growth on a TTM basis is 267% vis-vis a compounded profit growth of 45% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Mar 2021 public holding stood at 24.68% vis-vis 24.68% for Dec 2020
Conclusion
– has delivered good profit growth of 26.66% CAGR over last 5 years
– has a good return on equity (ROE) track record: 3 Years ROE 42.41% – Stock is trading at 17.91 times its book value
-Though the company is reporting repeated profits, it is not paying out dividend
-Tax rate seems low
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 44.85 and is trading at 50.6 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
