Mehabe score: 4 G Factor: 3 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 3 and Piotski score of 6.
Description
Asian Star Company is one of the world’s leading diamantaires primarily engaged in the business of diamond cutting and polishing, jewellery manufacturing and retailing. The Company is also engaged in generation of electricity through wind power in India.Site:531847Main Symbol:ASTAR
Stock trades at 884.0, below its 50dma 893.7. However it is trading above its 200dma 809.14. 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 893.7.
The 52 week high is at 1081.00 and the 52week low is at 586.25
Price Chart
P/E Chart
Sales and Margin
Strengths
– Stock is trading at 1.17 times its book value
Weakness
– The company has delivered a poor sales growth of -5.08% over past five years.
-Tax rate seems low
– has a low return on equity of 7.38% for last 3 years.
– might be capitalizing the interest cost
-Dividend payout has been low at 3.21% of profits over last 3 years
-Debtor days have increased from 90.74 to 115.69 days.
Competition
– The industry trades at a mean P/E of 25.7x. Titan Company trades at the industry’s max P/E of 163.6x. 531847 trades at a P/E of 21.1x
– Industry’s mean G-Factor is 4.3 while the mean Piotski score is 7.0. 531847 has a G-Factor of 3 and Piotski scoreof 6.
– Average 1 month return for industry is 7.0%. The max 1- month return was given by Goldiam Intl.: a return of 30.22 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 859.0 cr compared to Rs 157.0 cr for period ended Jun 2020, a rise of 447.1%
Company reported operating profit of Rs 24.0 cr for period ended Jun 2021, operating profit margin at 2.8 %.
Operating profit was negative for the same period last year thus company has improved its margins this year
The EPS for Jun 2021 was Rs 12.85 compared to Rs 23.88 for previous quarter ended Mar 2021 and Rs 0.17 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 3246.0 cr for period ended TTM vis-vis sales of Rs 2544.0 cr for the period ended Mar 2021, a healthy growth of 21.6%. The 3 year sales cagr stood at -3.8%.
Operating margins expanded to 3.0% for period ended TTM vis-vis 2.0% for period ended Mar 2021, expansion of 100.0 bps.
Net Profit reported at Rs 84.0 cr for period ended TTM vis-vis sales of Rs 64.0 cr for the period ended Mar 2021, rising 23.8%.
Company reported a poor Net Profit CAGR of -9.9% 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 116.0 cr for period ended Mar 2021 vis-vis Rs 105.0 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 6.0% compared to 7.0% over the last 3 Years. – The stock has given a return of 45% on a 1 Year basis vis-vis a return of 0% over the last 3 Years. – The compounded sales growth on a TTM bassis is -17% vis-vis a compounded sales growth of -13% over the last 3 Years. – The compounded profit growth on a TTM basis is 6% vis-vis a compounded profit growth of -16% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Jun 2021 public holding stood at 20.92% vis-vis 20.64% for Mar 2021
Conclusion
– Stock is trading at 1.17 times its book value – The company has delivered a poor sales growth of -5.08% over past five years.
-Tax rate seems low
– has a low return on equity of 7.38% for last 3 years.
– might be capitalizing the interest cost
-Dividend payout has been low at 3.21% of profits over last 3 years
-Debtor days have increased from 90.74 to 115.69 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 893.7 and is trading at 884.0. 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
