Mehabe score: 3 G Factor: 3 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 3 and Piotski score of 4.
Description
The company was originally incorporated in February 1981 as HICS Cements Private Limited (HCPL), the company initially was a manufacturer of cement. In January 2015, some of the existing promoters took over the management and changed the name to Mishtann Foods Limited (MFL) # It is an agro-product company in India involved in manufacturing, processing & trading of rice, wheat, and other food grains with its preliminary focus on branded basmati rice.
Main Points
Products and Exports
The company is in the business of Premium basmati rice.Site:539594Main Symbol:MISHTANN
Stock trades at 5.99, above its 50dma 5.5. However it is trading below its 200dma 6.46. The stock remains weak though short term bullish momentum supports price action. It needs to close above 6.46 for bullish price action to continue
The 52 week high is at 11.09 and the 52week low is at 3.88
Price Chart
P/E Chart
Sales and Margin
Strengths
– has been maintaining a healthy dividend payout of 58.40%
Weakness
– Stock is trading at 4.28 times its book value
– has low interest coverage ratio.
– has a low return on equity of 6.52% for last 3 years.
-Debtor days have increased from 67.45 to 84.21 days.
Competition
– The industry trades at a mean P/E of 51.7x. Mishtann Foods trades at the industry’s max P/E of 410.27x. 539594 trades at a P/E of 410.0x
– Industry’s mean G-Factor is 3.9 while the mean Piotski score is 8.0. 539594 has a G-Factor of 3 and Piotski scoreof 4.
– Average 1 month return for industry is 9.6%. The max 1- month return was given by KRBL: a return of 29.98 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 72.36 cr compared to Rs 26.98 cr for period ended Jun 2020, a rise of 168.2%
Operating Profits reported at Rs 6.09 cr for period ended Jun 2021 vis-vis 0.48 for period ended Jun 2020 .
Operating Margins expanded 663.7 bps for period ended Jun 2021 vis-vis Jun 2020 .
The EPS for Jun 2021 was Rs 0.07 compared to Rs 0.01 for previous quarter ended Mar 2021 and Rs 0.0 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 396.0 cr for period ended TTM vis-vis sales of Rs 351.0 cr for the period ended Mar 2021, a healthy growth of 11.4%. The 3 year sales cagr stood at -6.3%.
Operating margins expanded to 3.0% for period ended TTM vis-vis 2.0% for period ended Mar 2021, expansion of 100.0 bps.
Net Profit reported at Rs 4.0 cr for period ended TTM vis-vis sales of Rs 1.0 cr for the period ended Mar 2021, rising 75.0%.
Company reported a poor Net Profit CAGR of -30.7% 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 1.0% compared to 7.0% over the last 3 Years. – The stock has given a return of -46% on a 1 Year basis vis-vis a return of 32% over the last 3 Years. – The compounded sales growth on a TTM bassis is -27% vis-vis a compounded sales growth of -3% over the last 3 Years. – The compounded profit growth on a TTM basis is 2333% vis-vis a compounded profit growth of -49% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Jun 2021 public holding stood at 50.72% vis-vis 50.72% for Mar 2021
Conclusion
– has been maintaining a healthy dividend payout of 58.40% – Stock is trading at 4.28 times its book value
– has low interest coverage ratio.
– has a low return on equity of 6.52% for last 3 years.
-Debtor days have increased from 67.45 to 84.21 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 5.5 and is trading at 5.99 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
