Mehabe score: 8 G Factor: 5 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 5 and Piotski score of 4.
Description
Alok Industries is a textile company with a presence in the cotton and polyester segments. The Company is engaged in manufacturing of textile, including mending and packing activities; leather and other apparel products.Site:ALOKINDSMain Symbol:ALOKTEXT
Stock trades at 27.4, above its 50dma 25.17. It also trades above its 200dma 22.66. The stock remains bullish on techicals
The 52 week high is at 44.60 and the 52week low is at 18.25
Price Chart
P/E Chart
Sales and Margin
Strengths
– is expected to give good quarter
Weakness
– has low interest coverage ratio.
-The company has delivered a poor sales growth of -21.52% over past five years.
Competition
– The industry trades at a mean P/E of 18.0x. Alok Industries trades at the industry’s max P/E of 498.04x. ALOKINDS trades at a P/E of x
– Industry’s mean G-Factor is 3.3 while the mean Piotski score is 6.0. ALOKINDS has a G-Factor of 5 and Piotski scoreof 4.
– Average 1 month return for industry is 23.3%. The max 1- month return was given by Vishal Fabrics: a return of 69.87 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 1264.0 cr compared to Rs 369.0 cr for period ended Jun 2020, a rise of 242.5%
Company reported operating profit of Rs 99.0 cr for period ended Jun 2021, operating profit margin at 7.8 %.
Operating profit was negative for the same period last year thus company has improved its margins this year
The EPS for Jun 2021 was Rs -0.2 compared to Rs -1.01 for previous quarter ended Mar 2021 and Rs -44.95 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 4753.0 cr for period ended TTM vis-vis sales of Rs 3848.0 cr for the period ended Mar 2021, a healthy growth of 19.0%. The 3 year sales cagr stood at 12.3%.
Operating margins expanded to 8.0% for period ended TTM vis-vis 5.0% for period ended Mar 2021, expansion of 300.0 bps.
Net Profit reported at Rs 4166.0 cr for period ended TTM vis-vis sales of Rs -5673.0 cr for the period ended Mar 2021, rising 236.2%.
Company recorded a healthy Net Profit CAGR of 26.1% 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 345.0 cr for period ended Mar 2021 vis-vis Rs -261.0 cr for period ended Mar 2020
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The stock has given a return of -14% on a 1 Year basis vis-vis a return of 104% over the last 3 Years. – The compounded sales growth on a TTM bassis is 16% vis-vis a compounded sales growth of -11% over the last 3 Years. – The compounded profit growth on a TTM basis is -288% vis-vis a compounded profit growth of 23% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Jun 2021 fii holding stood at 1.3% vis-vis 0.9% for Mar 2021 – Public shareholding has remained largely constant. The Jun 2021 public holding stood at 22.96% vis-vis 23.38% for Mar 2021
Conclusion
– is expected to give good quarter – has low interest coverage ratio.
-The company has delivered a poor sales growth of -21.52% over past five years.
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 25.17 and is trading at 27.4 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
