Mehabe score: 2 G Factor: 4 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 4 and Piotski score of 4.
Description
POCL’s principal activities are converting Lead Scraps of various forms into Lead Metal and Alloys. The company carries out smelting of Lead Battery Scrap to produce secondary lead metal which is further transformed into Pure lead and Specific Lead Alloys. Further company also manufactures Zinc metal and Zinc Oxide.Site:532626
Market Cap:
Rs 168 cr
Price:
289.0
Trading pe:
15.6x
Book-value:
278/share
Div yield:
1.04 %
Earning yield:
7.48%
Face-value:
10.0/share
52week high:
315.00
52week low:
157.15
Technical Analysis
Stock trades at 289.0, above its 50dma 261.96. It also trades above its 200dma 232.98. The stock remains bullish on techicals
The 52 week high is at 315.00 and the 52week low is at 157.15
Price Chart
P/E Chart
Sales and Margin
Strengths
– Stock is trading at 1.04 times its book value
Weakness
– might be capitalizing the interest cost
-Dividend payout has been low at 10.25% of profits over last 3 years
-Debtor days have increased from 29.18 to 39.55 days.
Competition
– The industry trades at a mean P/E of 28.1x. Pidilite Inds. trades at the industry’s max P/E of 95.87x. 532626 trades at a P/E of 15.6x
– Industry’s mean G-Factor is 3.5 while the mean Piotski score is 8.0. 532626 has a G-Factor of 4 and Piotski scoreof 4.
– Average 1 month return for industry is 4.2%. The max 1- month return was given by Pondy Oxides: a return of 17.61 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 298.45 cr compared to Rs 266.46 cr for period ended Mar 2020, a rise of 12.0%
Operating Profits reported at Rs 6.59 cr for period ended Mar 2021 vis-vis 12.21 for period ended Mar 2020 .
Operating Margins contracted -237.4 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 7.69 compared to Rs 5.47 for previous quarter ended Dec 2020 and Rs 7.45 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 1004.0 cr for period ended Mar 2021 vis-vis sales of Rs 1220.0 cr for the period ended Mar 2020, a fall of 21.5%. The 3 year sales cagr stood at 2.2%.
Operating margins shrank to 2.0% for period ended Mar 2021 vis-vis 3.0% for period ended Mar 2020, contraction of 100.0 bps.
Net Profit reported at Rs 11.0 cr for period ended Mar 2021 vis-vis sales of Rs 16.0 cr for the period ended Mar 2020, falling 45.5%.
Company reported a poor Net Profit CAGR of -27.6% 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 worsened on its Return on Equity (RoE) metric. The RoE on Last Year basis was 7.0% compared to 15.0% over the last 3 Years. – The stock has given a return of 70% on a 1 Year basis vis-vis a return of -7% over the last 3 Years. – The compounded sales growth on a TTM bassis is -18% vis-vis a compounded sales growth of 2% over the last 3 Years. – The compounded profit growth on a TTM basis is -35% vis-vis a compounded profit growth of -28% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2021 fii holding stood at 0.0% vis-vis 0.0% for Dec 2020 – Public shareholding has remained largely constant. The Mar 2021 public holding stood at 51.26% vis-vis 51.26% for Dec 2020
Conclusion
– Stock is trading at 1.04 times its book value – might be capitalizing the interest cost
-Dividend payout has been low at 10.25% of profits over last 3 years
-Debtor days have increased from 29.18 to 39.55 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 261.96 and is trading at 289.0 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
