Mehabe score: 6 G Factor: 6 Piotski Score: 4 The stock has a rating OBSERVE & 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 6 and Piotski score of 4.
Description
Zenotech Laboratories is an India-based pharmaceutical company operating out of Hyderabad, India. The Company is engaged in a business of manufacture and marketing of pharmaceuticals products. The Company is a pharmaceutical specialty generic injectables company engaged in the area of manufacturing Oncology, bio-technology and General Injectables products.Site:532039Main Symbol:ZENOTECH
Stock trades at 52.0, above its 50dma 43.28. It also trades above its 200dma 37.47. The stock remains bullish on techicals
The 52 week high is at 52.90 and the 52week low is at 21.65
Price Chart
P/E Chart
Sales and Margin
Strengths
–
Weakness
– Stock is trading at 6.55 times its book value
– has low interest coverage ratio.
– has a low return on equity of 0.04% for last 3 years.
– might be capitalizing the interest cost
-Debtor days have increased from 51.36 to 61.81 days.
Competition
– The industry trades at a mean P/E of 36.1x. Hester Bios trades at the industry’s max P/E of 56.03x. 532039 trades at a P/E of x
– Industry’s mean G-Factor is 4.2 while the mean Piotski score is 9.0. 532039 has a G-Factor of 6 and Piotski scoreof 4.
– Average 1 month return for industry is 11.1%. The max 1- month return was given by Zenotech Lab.: a return of 34.41 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 9.89 cr compared to Rs 4.98 cr for period ended Jun 2020, a rise of 98.6%
Operating Profits reported at Rs 5.61 cr for period ended Jun 2021 vis-vis 1.02 for period ended Jun 2020 .
Operating Margins expanded 3624.2 bps for period ended Jun 2021 vis-vis Jun 2020 .
The EPS for Jun 2021 was Rs 0.57 compared to Rs 0.19 for previous quarter ended Mar 2021 and Rs -0.06 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 26.3 cr for period ended TTM vis-vis sales of Rs 22.44 cr for the period ended Mar 2021, a healthy growth of 14.7%. The 3 year sales cagr stood at 26.4%.
Operating margins expanded to 37.72% for period ended TTM vis-vis 28.43% for period ended Mar 2021, expansion of 929.0 bps.
Net Profit reported at Rs 2.68 cr for period ended TTM vis-vis sales of Rs -1.22 cr for the period ended Mar 2021, rising 0%.
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The stock has given a return of 120% 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 -13% vis-vis a compounded sales growth of 26% over the last 3 Years. – The compounded profit growth on a TTM basis is -128% vis-vis a compounded profit growth of 24% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Jun 2021 public holding stood at 31.15% vis-vis 31.15% for Mar 2021
Conclusion
– – Stock is trading at 6.55 times its book value
– has low interest coverage ratio.
– has a low return on equity of 0.04% for last 3 years.
– might be capitalizing the interest cost
-Debtor days have increased from 51.36 to 61.81 days.
Fundamentally, the stock remains weak on business fundamentals. Weak near term results have dampened and questioned business drivers. We suggest to wait for a upturn in business performance.
Technically, the stock trades above its 50 DMA 43.28 and is trading at 52.0 It has shown near term bullish momentum contrary to business fundamentals. We suggest to observe price action. However as investors, who like to avoid timing the markets, we suggest to avoid the stock
