Mehabe score: 4 G Factor: 2 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 2 and Piotski score of 4.
Description
Shalimar Wires Industriesis engaged in business of Synthec Forming Fabric, Metal Fourdrinier Wire Cloth, EDM Wire.Site:532455Main Symbol:SHALIWIR
Stock trades at 7.3, above its 50dma 6.78. It also trades above its 200dma 6.27. The stock remains bullish on techicals
The 52 week high is at 10.12 and the 52week low is at 3.16
Price Chart
P/E Chart
Sales and Margin
Strengths
– Stock is trading at 1.19 times its book value
Weakness
– has low interest coverage ratio.
-The company has delivered a poor sales growth of -1.63% over past five years.
– has a low return on equity of -19.31% for last 3 years.
-Promoters have pledged 54.24% of their holding.
-Debtor days have increased from 106.51 to 129.36 days.
-‘s cost of borrowing seems high
Competition
– The industry trades at a mean P/E of 11.8x. Hindustan Copper trades at the industry’s max P/E of 66.61x. 532455 trades at a P/E of x
– Industry’s mean G-Factor is 3.6 while the mean Piotski score is 8.0. 532455 has a G-Factor of 2 and Piotski scoreof 4.
– Average 1 month return for industry is 2.4%. The max 1- month return was given by Prec. Wires (I): a return of 22.58 %
Quarterly Results
Sales for period ended Sep 2021 is Rs 24.17 cr compared to Rs 22.79 cr for period ended Sep 2020, a rise of 6.1%
Operating Profits reported at Rs 1.68 cr for period ended Sep 2021 vis-vis 1.86 for period ended Sep 2020 .
Operating Margins contracted -121.1 bps for period ended Sep 2021 vis-vis Sep 2020 .
The EPS for Sep 2021 was Rs -0.95 compared to Rs -0.97 for previous quarter ended Jun 2021 and Rs -0.82 for Sep 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 99.0 cr for period ended TTM vis-vis sales of Rs 88.0 cr for the period ended Mar 2021, a healthy growth of 11.1%. The 3 year sales cagr stood at -4.9%.
Operating margins shrank to 6.0% for period ended TTM vis-vis 7.0% for period ended Mar 2021, contraction of 100.0 bps.
Net Profit reported at Rs -17.0 cr for period ended TTM vis-vis sales of Rs -17.0 cr for the period ended Mar 2021,
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 company has worsened on its Return on Equity (RoE) metric. The RoE on Last Year basis was -48.0% compared to -19.0% over the last 3 Years. – The stock has given a return of 95% on a 1 Year basis vis-vis a return of -28% over the last 3 Years. – The compounded sales growth on a TTM bassis is 3% vis-vis a compounded sales growth of -6% over the last 3 Years. – The compounded profit growth on a TTM basis is -118% vis-vis a compounded profit growth of -21% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Sep 2021 public holding stood at 32.71% vis-vis 32.7% for Jun 2021
Conclusion
– Stock is trading at 1.19 times its book value – has low interest coverage ratio.
-The company has delivered a poor sales growth of -1.63% over past five years.
– has a low return on equity of -19.31% for last 3 years.
-Promoters have pledged 54.24% of their holding.
-Debtor days have increased from 106.51 to 129.36 days.
-‘s cost of borrowing seems high
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 6.78 and is trading at 7.3 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
