Mehabe score: 5 G Factor: 4 Piotski Score: 5 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 4 and Piotski score of 5.
Description
Sarthak Industries is engaged in manufacturing of LPG Cylinders.(Source : 201903 Annual Report Page No:51)Site:531930
Market Cap:
Rs 25.6 cr
Price:
36.8
Trading pe:
12.2x
Book-value:
54.0/share
Div yield:
0.00 %
Earning yield:
18.22%
Face-value:
10.0/share
52week high:
36.05
52week low:
7.55
Technical Analysis
Stock trades at 36.8, above its 50dma 23.6. It also trades above its 200dma 17.84. The stock remains bullish on techicals
The 52 week high is at 36.05 and the 52week low is at 7.55
Price Chart
P/E Chart
Sales and Margin
Strengths
– is almost debt free.
-Stock is trading at 0.68 times its book value
– is expected to give good quarter
-Debtor days have improved from 61.25 to 37.61 days.
Weakness
– Though the company is reporting repeated profits, it is not paying out dividend
-The company has delivered a poor sales growth of 6.43% over past five years.
-Promoter holding is low: 36.36%
– has a low return on equity of 2.89% for last 3 years.
-Contingent liabilities of Rs.8.48 Cr.
-Earnings include an other income of Rs.1.77 Cr.
-‘s cost of borrowing seems high
Competition
– The industry trades at a mean P/E of 52.2x. 3M India trades at the industry’s max P/E of 183.67x. 531930 trades at a P/E of 12.2x
– Industry’s mean G-Factor is 4.4 while the mean Piotski score is 7.0. 531930 has a G-Factor of 4 and Piotski scoreof 5.
– Average 1 month return for industry is 10.1%. The max 1- month return was given by Sarthak Industri: a return of 51.8 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 34.51 cr compared to Rs 27.01 cr for period ended Mar 2020, a rise of 27.8%
Operating Profits reported at Rs 0.52 cr for period ended Mar 2021 vis-vis 0.72 for period ended Mar 2020 .
Operating Margins contracted -115.9 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 0.36 compared to Rs 0.82 for previous quarter ended Dec 2020 and Rs 0.1 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 134.0 cr for period ended Mar 2021 vis-vis sales of Rs 96.0 cr for the period ended Mar 2020, a healthy growth of 28.4%. The 3 year sales cagr stood at 3.7%.
Operating margins expanded to 2.0% for period ended Mar 2021 vis-vis -1.0% for period ended Mar 2020, expansion of 300.0 bps.
Net Profit reported at Rs 2.0 cr for period ended Mar 2021 vis-vis sales of Rs 3.0 cr for the period ended Mar 2020, falling 50.0%.
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities: Rs 0.0 cr for period ended Mar 2021 vis-vis Rs -23.0 cr for period ended Mar 2020
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The stock has given a return of 363% on a 1 Year basis vis-vis a return of 78% over the last 3 Years. – The compounded sales growth on a TTM bassis is 40% vis-vis a compounded sales growth of 4% over the last 3 Years. – The compounded profit growth on a TTM basis is 646% vis-vis a compounded profit growth of 6% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Mar 2021 public holding stood at 63.64% vis-vis 63.65% for Dec 2020
Conclusion
– is almost debt free.
-Stock is trading at 0.68 times its book value
– is expected to give good quarter
-Debtor days have improved from 61.25 to 37.61 days. – Though the company is reporting repeated profits, it is not paying out dividend
-The company has delivered a poor sales growth of 6.43% over past five years.
-Promoter holding is low: 36.36%
– has a low return on equity of 2.89% for last 3 years.
-Contingent liabilities of Rs.8.48 Cr.
-Earnings include an other income of Rs.1.77 Cr.
-‘s cost of borrowing seems high
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 above its 50 DMA 23.6 and is trading at 36.8, thus bullish price action wise.
