Mehabe score: 3 G Factor: 1 Piotski Score: 6 The stock has a rating SELL. 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 1 and Piotski score of 6.
Description
RRIL has continued to trade in textile products Business.Site:531307Main Symbol:RRIL
Stock trades at 12.5, below its 50dma 13.09. However it is trading above its 200dma 10.19. The stock remains weak in the short term due to near term bearish momentum. However overall bullish structure remains intact. Price action will further build up as it moves above its dma50, currently situated at 13.09.
The 52 week high is at 16.50 and the 52week low is at 1.46
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
– is almost debt free.
Weakness
– Though the company is reporting repeated profits, it is not paying out dividend
-The company has delivered a poor sales growth of -1.36% over past five years.
– has a low return on equity of 1.21% for last 3 years.
-Earnings include an other income of Rs.2.39 Cr.
Competition
– The industry trades at a mean P/E of 63.3x. Chandni Textiles trades at the industry’s max P/E of 958.33x. 531307 trades at a P/E of 112.0x
– Industry’s mean G-Factor is 3.1 while the mean Piotski score is 8.0. 531307 has a G-Factor of 1 and Piotski scoreof 6.
– Average 1 month return for industry is 5.5%. The max 1- month return was given by Integra Engg.: a return of 27.01 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 5.72 cr compared to Rs 12.37 cr for period ended Mar 2020, a fall of 53.8%
Company reported operating profit of Rs 1.11 cr for period ended Mar 2021, operating profit margin at 19.4 %.
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 0.12 compared to Rs -0.05 for previous quarter ended Dec 2020 and Rs 0.21 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 8.2 cr for period ended Mar 2021 vis-vis sales of Rs 99.78 cr for the period ended Mar 2020, a fall of 1116.8%. The 3 year sales cagr stood at -53.6%.
Operating margins expanded to 7.32% for period ended Mar 2021 vis-vis 0.12% for period ended Mar 2020, expansion of 720.0 bps.
Net Profit reported at Rs 0.88 cr for period ended Mar 2021 vis-vis sales of Rs 1.02 cr for the period ended Mar 2020, falling 15.9%.
Company reported a poor Net Profit CAGR of -3.5% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 13.35 cr for period ended Mar 2021 vis-vis Rs -0.36 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 had stable/constant Return on Equity (RoE) metric. The RoE on Last Year basis was 2.0% compared to 1.0% over the last 3 Years. – The stock has given a return of 683% on a 1 Year basis vis-vis a return of 111% over the last 3 Years. – The compounded sales growth on a TTM bassis is -92% vis-vis a compounded sales growth of -54% over the last 3 Years. – The compounded profit growth on a TTM basis is -14% vis-vis a compounded profit growth of -4% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2021 fii holding stood at 0.0% vis-vis 0.0% for Dec 2020 – Public shareholding has remained largely constant. The Mar 2021 public holding stood at 48.58% vis-vis 48.71% for Dec 2020
Conclusion
– has reduced debt.
– is almost debt free. – Though the company is reporting repeated profits, it is not paying out dividend
-The company has delivered a poor sales growth of -1.36% over past five years.
– has a low return on equity of 1.21% for last 3 years.
-Earnings include an other income of Rs.2.39 Cr.
Fundamentally, the stock remains weak. The business fundamentals are on shaky ground. Weak near term results have dampened and questioned business drivers. We suggest to wait for a upturn in business performance.
Technically, the stock reflects the poor fundamentals. The stock remains below its 50 DMA 13.09 and is trading at 12.5. It has shown near term lack of bullish momentum. We suggest to observe price action. However as investors, who like to avoid timing the markets, we suggest to avoid the stock
