Mehabe score: 2 G Factor: 4 Piotski Score: 7 The stock has a rating 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 7.
Description
Hawa Engineers is in business of Manufacturing of Industrial Valves, etc.Site:539176
Market Cap:
Rs 14.1 cr
Price:
40.0
Trading pe:
23.5x
Book-value:
40.6/share
Div yield:
0.00 %
Earning yield:
11.73%
Face-value:
10.0/share
52week high:
43.85
52week low:
20.00
Technical Analysis
Stock trades at 40.0, above its 50dma 35.62. It also trades above its 200dma 30.6. The stock remains bullish on techicals
The 52 week high is at 43.85 and the 52week low is at 20.00
Price Chart
P/E Chart
Sales and Margin
Strengths
– Stock is trading at 0.99 times its book value
Weakness
– Though the company is reporting repeated profits, it is not paying out dividend
– has low interest coverage ratio.
-The company has delivered a poor sales growth of -0.38% over past five years.
– has a low return on equity of 6.59% for last 3 years.
-Contingent liabilities of Rs.6.92 Cr.
Competition
– The industry trades at a mean P/E of 20.2x. GMM Pfaudler trades at the industry’s max P/E of 92.39x. 539176 trades at a P/E of 23.5x
– Industry’s mean G-Factor is 3.5 while the mean Piotski score is 8.0. 539176 has a G-Factor of 4 and Piotski scoreof 7.
– Average 1 month return for industry is 0.1%. The max 1- month return was given by Hawa Engineers: a return of 17.3 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 15.62 cr compared to Rs 10.11 cr for period ended Mar 2020, a rise of 54.5%
Operating Profits reported at Rs 0.9 cr for period ended Mar 2021 vis-vis 0.62 for period ended Mar 2020 .
Operating Margins contracted -37.1 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 1.42 compared to Rs 0.94 for previous quarter ended Dec 2020 and Rs 0.82 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 48.11 cr for period ended Mar 2021 vis-vis sales of Rs 44.8 cr for the period ended Mar 2020, a growth of 6.9%. The 3 year sales cagr stood at -4.5%.
Operating margins shrank to 5.9% for period ended Mar 2021 vis-vis 6.03% for period ended Mar 2020, contraction of 13.0 bps.
Net Profit reported at Rs 0.8 cr for period ended Mar 2021 vis-vis sales of Rs 0.85 cr for the period ended Mar 2020, falling 6.2%.
Company reported a poor Net Profit CAGR of -6.5% 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 had stable/constant Return on Equity (RoE) metric. The RoE on Last Year basis was 6.0% compared to 7.0% over the last 3 Years. – The stock has given a return of 67% on a 1 Year basis vis-vis a return of -14% over the last 3 Years. – The compounded sales growth on a TTM bassis is -17% vis-vis a compounded sales growth of -3% over the last 3 Years. – The compounded profit growth on a TTM basis is -52% vis-vis a compounded profit growth of 7% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Mar 2021 public holding stood at 44.02% vis-vis 44.29% for Dec 2020
Conclusion
– Stock is trading at 0.99 times its book value – Though the company is reporting repeated profits, it is not paying out dividend
– has low interest coverage ratio.
-The company has delivered a poor sales growth of -0.38% over past five years.
– has a low return on equity of 6.59% for last 3 years.
-Contingent liabilities of Rs.6.92 Cr.
The business fundamentals of the stock remain stable. Stronger near term results will build interest in the stock. We suggest to wait for a upturn in business performance.
Technically, the stock remains above its 50 DMA 35.62 and is trading at 40.0, thus bullish price action wise.
