Mehabe score: 6 G Factor: 3 Piotski Score: 6 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 6.
Description
Godavari Drugs is engaged in the Business of manufacture of Active Pharmaceutical Ingredients.Site:530317
Market Cap:
Rs 48.1 cr
Price:
63.9
Trading pe:
13.4x
Book-value:
29.4/share
Div yield:
0.00 %
Earning yield:
10.60%
Face-value:
10.0/share
52week high:
69.00
52week low:
17.50
Technical Analysis
Stock trades at 63.9, above its 50dma 57.83. It also trades above its 200dma 45.32. The stock remains bullish on techicals
The 52 week high is at 69.00 and the 52week low is at 17.50
Price Chart
P/E Chart
Sales and Margin
Strengths
– ‘s median sales growth is 19.95% of last 10 years
Weakness
– Though the company is reporting repeated profits, it is not paying out dividend
-The company has delivered a poor sales growth of 11.78% over past five years.
– has a low return on equity of 7.54% for last 3 years.
Competition
– The industry trades at a mean P/E of 23.1x. Sequent Scien. trades at the industry’s max P/E of 66.93x. 530317 trades at a P/E of 13.4x
– Industry’s mean G-Factor is 4.1 while the mean Piotski score is 7.0. 530317 has a G-Factor of 3 and Piotski scoreof 6.
– Average 1 month return for industry is 2.5%. The max 1- month return was given by Gland Pharma: a return of 12.65 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 32.96 cr compared to Rs 24.44 cr for period ended Mar 2020, a rise of 34.9%
Operating Profits reported at Rs 2.57 cr for period ended Mar 2021 vis-vis 1.32 for period ended Mar 2020 .
Operating Margins expanded 239.6 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 1.71 compared to Rs 1.33 for previous quarter ended Dec 2020 and Rs 1.01 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 123.0 cr for period ended Mar 2021 vis-vis sales of Rs 96.0 cr for the period ended Mar 2020, a healthy growth of 22.0%. The 3 year sales cagr stood at 24.3%.
Operating margins expanded to 8.0% for period ended Mar 2021 vis-vis 6.0% for period ended Mar 2020, expansion of 200.0 bps.
Net Profit reported at Rs 4.0 cr for period ended Mar 2021 vis-vis sales of Rs 2.0 cr for the period ended Mar 2020, rising 50.0%.
Company recorded a healthy Net Profit CAGR of 58.7% 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 had stable/constant Return on Equity (RoE) metric. The RoE on Last Year basis was 10.0% compared to 8.0% over the last 3 Years. – The stock has given a return of 245% on a 1 Year basis vis-vis a return of 33% over the last 3 Years. – The compounded sales growth on a TTM bassis is 19% vis-vis a compounded sales growth of 8% over the last 3 Years. – The compounded profit growth on a TTM basis is 125% vis-vis a compounded profit growth of 3% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Mar 2021 public holding stood at 43.65% vis-vis 43.65% for Dec 2020
Conclusion
– ‘s median sales growth is 19.95% of last 10 years – Though the company is reporting repeated profits, it is not paying out dividend
-The company has delivered a poor sales growth of 11.78% over past five years.
– has a low return on equity of 7.54% 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 57.83 and is trading at 63.9 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
