Mehabe score: 5 G Factor: 5 Piotski Score: 7 The stock has a rating 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 5 and Piotski score of 7.
Description
Suraj is Indias leading Manufacturer of Stainless Steel Seamless Pipes, Tubes and U Tubes, Flanges & Fittings with Electro polishing having a plant at Thol, Mehsana. Our products find application in important industry segments like pharmaceuticals, dyeSite:531638Main Symbol:SURAJLTD
Stock trades at 58.0, below its 50dma 59.37. However it is trading above its 200dma 49.4. 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 59.37.
The 52 week high is at 76.00 and the 52week low is at 15.85
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
– is expected to give good quarter
Weakness
– Though the company is reporting repeated profits, it is not paying out dividend
– has low interest coverage ratio.
-The company has delivered a poor sales growth of 4.30% over past five years.
– has a low return on equity of 1.41% for last 3 years.
-Earnings include an other income of Rs.4.57 Cr.
Competition
– The industry trades at a mean P/E of 13.8x. Suraj trades at the industry’s max P/E of 64.95x. 531638 trades at a P/E of 65.0x
– Industry’s mean G-Factor is 5.1 while the mean Piotski score is 9.0. 531638 has a G-Factor of 5 and Piotski scoreof 7.
– Average 1 month return for industry is 6.3%. The max 1- month return was given by Mah. Seamless: a return of 58.81 %
Quarterly Results
Sales for period ended Sep 2021 is Rs 73.48 cr compared to Rs 52.89 cr for period ended Sep 2020, a rise of 38.9%
Operating Profits reported at Rs 3.46 cr for period ended Sep 2021 vis-vis 3.09 for period ended Sep 2020 .
Operating Margins contracted -113.4 bps for period ended Sep 2021 vis-vis Sep 2020 .
The EPS for Sep 2021 was Rs 0.37 compared to Rs 0.23 for previous quarter ended Jun 2021 and Rs 0.18 for Sep 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 245.0 cr for period ended TTM vis-vis sales of Rs 188.0 cr for the period ended Mar 2021, a healthy growth of 23.3%. The 3 year sales cagr stood at 11.0%.
Operating margins shrank to 5.0% for period ended TTM vis-vis 7.0% for period ended Mar 2021, contraction of 200.0 bps.
Net Profit reported at Rs 2.0 cr for period ended TTM vis-vis sales of Rs 1.0 cr for the period ended Mar 2021, rising 50.0%.
Company recorded a healthy Net Profit CAGR of 26.0% 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 33.0 cr for period ended Mar 2021 vis-vis Rs 30.0 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 1.0% compared to 1.0% over the last 3 Years. – The stock has given a return of 231% on a 1 Year basis vis-vis a return of 15% over the last 3 Years. – The compounded sales growth on a TTM bassis is 44% vis-vis a compounded sales growth of -3% over the last 3 Years. – The compounded profit growth on a TTM basis is 121% vis-vis a compounded profit growth of 50% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Sep 2021 public holding stood at 24.95% vis-vis 24.95% for Jun 2021
Conclusion
– has reduced debt.
– is expected to give good quarter – Though the company is reporting repeated profits, it is not paying out dividend
– has low interest coverage ratio.
-The company has delivered a poor sales growth of 4.30% over past five years.
– has a low return on equity of 1.41% for last 3 years.
-Earnings include an other income of Rs.4.57 Cr.
The business fundamentals of the stock remain stable. Stronger near term results will build interest in the stock. We suggest to wait for a upturn in business performance.
Technically, the stock remains below its 50 DMA 59.37 and is trading at 58.0. Shows a near term lack of buying interest.
