Mehabe score: 3 G Factor: 4 Piotski Score: 4 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 4 and Piotski score of 4.
Description
Metal Coatings (India) is engaged in the manufacture and sale of Cold Rolled Steel Strips, H. R. Pickled & Oiled coils/strips.Site:531810Main Symbol:METALCO
Stock trades at 35.9, below its 50dma 37.03. However it is trading above its 200dma 33.87. 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 37.03.
The 52 week high is at 49.35 and the 52week low is at 23.05
Price Chart
P/E Chart
Sales and Margin
Strengths
– Stock is trading at 0.84 times its book value
– is expected to give good quarter
Weakness
– Though the company is reporting repeated profits, it is not paying out dividend
-The company has delivered a poor sales growth of 0.55% over past five years.
– has a low return on equity of 10.13% for last 3 years.
– might be capitalizing the interest cost
-Debtor days have increased from 78.87 to 98.34 days.
Competition
– The industry trades at a mean P/E of 13.0x. Ratnamani Metals trades at the industry’s max P/E of 34.7x. 531810 trades at a P/E of 6.96x
– Industry’s mean G-Factor is 5.2 while the mean Piotski score is 9.0. 531810 has a G-Factor of 4 and Piotski scoreof 4.
– Average 1 month return for industry is 0.9%. The max 1- month return was given by Mah. Seamless: a return of 16.44 %
Quarterly Results
Sales for period ended Sep 2021 is Rs 32.6 cr compared to Rs 23.01 cr for period ended Sep 2020, a rise of 41.7%
Operating Profits reported at Rs 0.84 cr for period ended Sep 2021 vis-vis 0.81 for period ended Sep 2020 .
Operating Margins contracted -94.4 bps for period ended Sep 2021 vis-vis Sep 2020 .
The EPS for Sep 2021 was Rs 0.81 compared to Rs 1.23 for previous quarter ended Jun 2021 and Rs 1.04 for Sep 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 126.0 cr for period ended TTM vis-vis sales of Rs 94.0 cr for the period ended Mar 2021, a healthy growth of 25.4%. The 3 year sales cagr stood at -6.5%.
Operating margins expanded to 4.0% for period ended TTM vis-vis 3.0% for period ended Mar 2021, expansion of 100.0 bps.
Net Profit reported at Rs 4.0 cr for period ended TTM vis-vis sales of Rs 3.0 cr for the period ended Mar 2021, rising 25.0%.
Company recorded a healthy Net Profit CAGR of 10.1% 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 9.0% compared to 10.0% over the last 3 Years. – The stock has given a return of 42% on a 1 Year basis vis-vis a return of 3% over the last 3 Years. – The compounded sales growth on a TTM bassis is 54% vis-vis a compounded sales growth of -5% over the last 3 Years. – The compounded profit growth on a TTM basis is 110% vis-vis a compounded profit growth of 9% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Sep 2021 public holding stood at 34.81% vis-vis 34.81% for Jun 2021
Conclusion
– Stock is trading at 0.84 times its book value
– is expected to give good quarter – Though the company is reporting repeated profits, it is not paying out dividend
-The company has delivered a poor sales growth of 0.55% over past five years.
– has a low return on equity of 10.13% for last 3 years.
– might be capitalizing the interest cost
-Debtor days have increased from 78.87 to 98.34 days.
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 37.03 and is trading at 35.9. 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
