Mehabe score: 4 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
Syschem (India) is engaged in production of Active Pharmaceuticals Ingredients (APIs) and bulk drugs.Site:531173Main Symbol:SYSCHEM
Stock trades at 11.4, above its 50dma 8.5. It also trades above its 200dma 7.67. The stock remains bullish on techicals
The 52 week high is at 13.00 and the 52week low is at 5.44
Price Chart
P/E Chart
Sales and Margin
Strengths
–
Weakness
– Stock is trading at 3.46 times its book value
– has low interest coverage ratio.
-Promoter holding is low: 9.54%
– has a low return on equity of -22.02% for last 3 years.
– might be capitalizing the interest cost
-Promoter holding has decreased over last 3 years: -14.47%
Competition
– The industry trades at a mean P/E of 31.9x. Sun Pharma.Inds. trades at the industry’s max P/E of 56.86x. 531173 trades at a P/E of x
– Industry’s mean G-Factor is 2.1 while the mean Piotski score is 9.0. 531173 has a G-Factor of 2 and Piotski scoreof 4.
– Average 1 month return for industry is 2.8%. The max 1- month return was given by Syschem (India): a return of 43.0 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 17.41 cr compared to Rs 10.7 cr for period ended Jun 2020, a rise of 62.7%
Company reported negative operating profit of Rs -0.86 cr for period ended Jun 2021. For same period last year, operating profit was 0.1
The EPS for Jun 2021 was Rs -0.69 compared to Rs -1.22 for previous quarter ended Mar 2021 and Rs -0.2 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 75.2 cr for period ended TTM vis-vis sales of Rs 68.49 cr for the period ended Mar 2021, a growth of 8.9%. The 3 year sales cagr stood at -6.9%.
Operating margins shrank to -8.16% for period ended TTM vis-vis -7.53% for period ended Mar 2021, contraction of 63.0 bps.
Net Profit reported at Rs -6.67 cr for period ended TTM vis-vis sales of Rs -5.57 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 3.72 cr for period ended Mar 2021 vis-vis Rs 3.46 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 -66.0% compared to -22.0% over the last 3 Years. – The stock has given a return of 95% on a 1 Year basis vis-vis a return of 5% over the last 3 Years. – The compounded sales growth on a TTM bassis is -11% vis-vis a compounded sales growth of 1% over the last 3 Years. – The compounded profit growth on a TTM basis is -206% vis-vis a compounded profit growth of % over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Jun 2021 public holding stood at 90.46% vis-vis 90.46% for Mar 2021
Conclusion
– – Stock is trading at 3.46 times its book value
– has low interest coverage ratio.
-Promoter holding is low: 9.54%
– has a low return on equity of -22.02% for last 3 years.
– might be capitalizing the interest cost
-Promoter holding has decreased over last 3 years: -14.47%
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 8.5 and is trading at 11.4 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
