Mehabe score: 7 G Factor: 3 Piotski Score: 6 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 3 and Piotski score of 6.
Description
Aarnav Fashions manufactures fabrics for shirts, dresses, garments for ladies & kids and fabrics for home furnishing. The company is located in the industrial zone of Ahmedabad, Gujarat [1].Site:539562Main Symbol:AARNAV
Stock trades at 92.9, above its 50dma 64.77. It also trades above its 200dma 66.34. The stock remains bullish on techicals
The 52 week high is at 96.25 and the 52week low is at 41.00
Price Chart
P/E Chart
Sales and Margin
Strengths
– is almost debt free.
– has been maintaining a healthy dividend payout of 18.88%
Weakness
– Promoter holding is low: 27.21%
– has high debtors of 314.51 days.
-Promoter holding has decreased over last 3 years: -28.79%
Competition
– The industry trades at a mean P/E of 46.4x. Adani Enterp. trades at the industry’s max P/E of 139.0x. 539562 trades at a P/E of 43.3x
– Industry’s mean G-Factor is 3.5 while the mean Piotski score is 7.0. 539562 has a G-Factor of 3 and Piotski scoreof 6.
– Average 1 month return for industry is 11.1%. The max 1- month return was given by Aarnav Fashions: a return of 51.43 %
Quarterly Results
Sales for period ended Sep 2021 is Rs 10.5 cr compared to Rs 6.27 cr for period ended Sep 2020, a rise of 67.5%
Operating Profits reported at Rs 1.01 cr for period ended Sep 2021 vis-vis 0.96 for period ended Sep 2020 .
Operating Margins contracted -569.2 bps for period ended Sep 2021 vis-vis Sep 2020 .
The EPS for Sep 2021 was Rs 0.51 compared to Rs 0.41 for previous quarter ended Jun 2021 and Rs 0.48 for Sep 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 39.17 cr for period ended TTM vis-vis sales of Rs 32.1 cr for the period ended Mar 2021, a healthy growth of 18.0%. The 3 year sales cagr stood at 191.6%.
Operating margins shrank to 10.54% for period ended TTM vis-vis 12.24% for period ended Mar 2021, contraction of 170.0 bps.
Net Profit reported at Rs 3.26 cr for period ended TTM vis-vis sales of Rs 3.09 cr for the period ended Mar 2021, rising 5.2%.
Company recorded a healthy Net Profit CAGR of 162.6% 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 0.11 cr for period ended Mar 2021 vis-vis Rs -14.85 cr for period ended Mar 2020
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 14.0% compared to 15.0% over the last 3 Years. – The stock has given a return of 90% on a 1 Year basis vis-vis a return of 95% over the last 3 Years. – The compounded sales growth on a TTM bassis is -3% vis-vis a compounded sales growth of 267% over the last 3 Years. – The compounded profit growth on a TTM basis is 22% vis-vis a compounded profit growth of 195% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Jun 2021 public holding stood at 72.79% vis-vis 72.79% for Mar 2021
Conclusion
– is almost debt free.
– has been maintaining a healthy dividend payout of 18.88% – Promoter holding is low: 27.21%
– has high debtors of 314.51 days.
-Promoter holding has decreased over last 3 years: -28.79%
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 64.77 and is trading at 92.9 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
