Mehabe score: 3 G Factor: 4 Piotski Score: 2 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 2.
Description
Gokak Textiles is engaged in the business of textile, manufacturing cotton yarn, blended yarn, industrial fabrics, terry towels, t-shirts, polos, undergarments and sweaters, among others. It is also engaged in generation, transmission, distribution, trading of hydro-power and other renewal and non-renewal sources of energy.Site:532957
Market Cap:
Rs 17.6 cr
Price:
27.0
Trading pe:
x
Book-value:
-171/share
Div yield:
0.00 %
Earning yield:
-8.61%
Face-value:
10.0/share
52week high:
28.00
52week low:
9.03
Technical Analysis
Stock trades at 27.0, above its 50dma 20.91. It also trades above its 200dma 18.91. The stock remains bullish on techicals
The 52 week high is at 28.00 and the 52week low is at 9.03
Price Chart
P/E Chart
Sales and Margin
Strengths
–
Weakness
– has low interest coverage ratio.
-The company has delivered a poor sales growth of -21.62% over past five years.
-Contingent liabilities of Rs.102.18 Cr.
-Debtor days have increased from 28.64 to 35.47 days.
Competition
– The industry trades at a mean P/E of 12.5x. Arvind Ltd trades at the industry’s max P/E of 911.25x. 532957 trades at a P/E of x
– Industry’s mean G-Factor is 4.6 while the mean Piotski score is 8.0. 532957 has a G-Factor of 4 and Piotski scoreof 2.
– Average 1 month return for industry is 14.2%. The max 1- month return was given by Gokak Textiles: a return of 44.0 %
Quarterly Results
Sales for period ended Dec 2020 is Rs 30.02 cr compared to Rs 21.28 cr for period ended Dec 2019, a rise of 41.1%
Company reported negative operating profit of Rs -4.03 cr for period ended Dec 2020. For same period last year, operating profit was -7.6
The EPS for Dec 2020 was Rs -14.45 compared to Rs -7.43 for previous quarter ended Sep 2020 and Rs -19.96 for Dec 2019
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 98.0 cr for period ended TTM vis-vis sales of Rs 103.0 cr for the period ended Mar 2020, a fall of 5.1%. The 3 year sales cagr stood at -17.9%.
Operating margins expanded to -16.0% for period ended TTM vis-vis -24.0% for period ended Mar 2020, expansion of 800.0 bps.
Net Profit reported at Rs -36.0 cr for period ended TTM vis-vis sales of Rs -45.0 cr for the period ended Mar 2020, rising 0%.
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 stock has given a return of 36% on a 1 Year basis vis-vis a return of -8% over the last 3 Years. – The compounded sales growth on a TTM bassis is -18% vis-vis a compounded sales growth of 7% over the last 3 Years. – The compounded profit growth on a TTM basis is 18% vis-vis a compounded profit growth of -17% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2021 fii holding stood at 3.09% vis-vis 3.09% for Dec 2020 – Public shareholding has remained largely constant. The Mar 2021 public holding stood at 17.8% vis-vis 17.8% for Dec 2020
Conclusion
– – has low interest coverage ratio.
-The company has delivered a poor sales growth of -21.62% over past five years.
-Contingent liabilities of Rs.102.18 Cr.
-Debtor days have increased from 28.64 to 35.47 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 20.91 and is trading at 27.0 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
