Mehabe score: 3 G Factor: 3 Piotski Score: 4 The stock has a rating SELL. 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 3 and Piotski score of 4.
Description
Enkei Wheels (India) Limited is India’s leading manufacturer and supplier of aluminium wheels. It is part of the Enkei Group, a globally renowned Japanese multinational conglomerate with more than six decades of experience in manufacturing aluminium wheels. [1]Site:533477Main Symbol:ENKEIWHEL
Stock trades at 353.0, below its 50dma 364.25. However it is trading above its 200dma 330.34. The stock remains weak in the short term due to near term bearish momentum. However overall bullish structure remains intact. Price action will further build up as it moves above its dma50, currently situated at 364.25.
The 52 week high is at 438.95 and the 52week low is at 208.15
Price Chart
P/E Chart
Sales and Margin
Strengths
– is expected to give good quarter
Weakness
– Stock is trading at 3.26 times its book value
-The company has delivered a poor sales growth of -9.34% over past five years.
– has a low return on equity of -12.20% for last 3 years.
– might be capitalizing the interest cost
Competition
– The industry trades at a mean P/E of 22.2x. WABCO India trades at the industry’s max P/E of 94.43x. 533477 trades at a P/E of 58.2x
– Industry’s mean G-Factor is 3.2 while the mean Piotski score is 7.0. 533477 has a G-Factor of 3 and Piotski scoreof 4.
– Average 1 month return for industry is 3.6%. The max 1- month return was given by Bosch: a return of 12.81 %
Quarterly Results
Sales for period ended Sep 2021 is Rs 119.23 cr compared to Rs 75.83 cr for period ended Sep 2020, a rise of 57.2%
Operating Profits reported at Rs 10.16 cr for period ended Sep 2021 vis-vis 3.69 for period ended Sep 2020 .
Operating Margins expanded 365.5 bps for period ended Sep 2021 vis-vis Sep 2020 .
The EPS for Sep 2021 was Rs 2.71 compared to Rs -2.4 for previous quarter ended Jun 2021 and Rs -1.61 for Sep 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 381.0 cr for period ended TTM vis-vis sales of Rs 235.0 cr for the period ended Dec 2020, a healthy growth of 38.3%. The 3 year sales cagr stood at -7.0%.
Net Profit reported at Rs 11.0 cr for period ended TTM vis-vis sales of Rs -31.0 cr for the period ended Dec 2020, rising 381.8%.
Company reported a poor Net Profit CAGR of -5.4% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 10.0 cr for period ended Dec 2020 vis-vis Rs 6.0 cr for period ended Dec 2019
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 -17.0% compared to -12.0% over the last 3 Years. – The stock has given a return of 37% on a 1 Year basis vis-vis a return of 1% over the last 3 Years. – The compounded sales growth on a TTM bassis is 84% vis-vis a compounded sales growth of -17% over the last 3 Years. – The compounded profit growth on a TTM basis is 122% vis-vis a compounded profit growth of % over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Sep 2021 fii holding stood at 0.01% vis-vis 0.01% for Jun 2021 – Public shareholding has remained largely constant. The Sep 2021 public holding stood at 25.03% vis-vis 25.03% for Jun 2021
Conclusion
– is expected to give good quarter – Stock is trading at 3.26 times its book value
-The company has delivered a poor sales growth of -9.34% over past five years.
– has a low return on equity of -12.20% for last 3 years.
– might be capitalizing the interest cost
Fundamentally, the stock remains weak. The business fundamentals are on shaky ground. Weak near term results have dampened and questioned business drivers. We suggest to wait for a upturn in business performance.
Technically, the stock reflects the poor fundamentals. The stock remains below its 50 DMA 364.25 and is trading at 353.0. It has shown near term lack of bullish momentum. We suggest to observe price action. However as investors, who like to avoid timing the markets, we suggest to avoid the stock
