Mehabe score: 4 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
Aro Granite Industries is engaged in the Business of Granite Tiles & Slabs.Site:AROGRANITE
Market Cap:
Rs 83.4 cr
Price:
54.5
Trading pe:
22.2x
Book-value:
120/share
Div yield:
0.00 %
Earning yield:
4.55%
Face-value:
10.0/share
52week high:
65.50
52week low:
21.50
Technical Analysis
Stock trades at 54.5, above its 50dma 50.81. It also trades above its 200dma 43.01. The stock remains bullish on techicals
The 52 week high is at 65.50 and the 52week low is at 21.50
Price Chart
P/E Chart
Sales and Margin
Strengths
– Stock is trading at 0.45 times its book value
Weakness
– has low interest coverage ratio.
-The company has delivered a poor sales growth of -6.84% over past five years.
– has a low return on equity of 2.75% for last 3 years.
– might be capitalizing the interest cost
Competition
– The industry trades at a mean P/E of 26.5x. Jubilant Ingrevia trades at the industry’s max P/E of 135.48x. AROGRANITE trades at a P/E of 22.2x
– Industry’s mean G-Factor is 4.1 while the mean Piotski score is 9.0. AROGRANITE has a G-Factor of 3 and Piotski scoreof 4.
– Average 1 month return for industry is 7.2%. The max 1- month return was given by Gujarat Gas: a return of 27.45 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 56.02 cr compared to Rs 43.6 cr for period ended Mar 2020, a rise of 28.5%
Operating Profits reported at Rs 8.25 cr for period ended Mar 2021 vis-vis 3.44 for period ended Mar 2020 .
Operating Margins expanded 683.7 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 1.81 compared to Rs 0.69 for previous quarter ended Dec 2020 and Rs 0.31 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 179.0 cr for period ended Mar 2021 vis-vis sales of Rs 177.0 cr for the period ended Mar 2020, a growth of 1.1%. The 3 year sales cagr stood at -3.5%.
Operating margins expanded to 13.0% for period ended Mar 2021 vis-vis 10.0% for period ended Mar 2020, expansion of 300.0 bps.
Net Profit reported at Rs 6.0 cr for period ended Mar 2021 vis-vis sales of Rs 4.0 cr for the period ended Mar 2020, rising 33.3%.
Company recorded a healthy Net Profit CAGR of 81.7% 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 had stable/constant Return on Equity (RoE) metric. The RoE on Last Year basis was 2.0% compared to 3.0% over the last 3 Years. – The stock has given a return of 103% on a 1 Year basis vis-vis a return of -3% over the last 3 Years. – The compounded sales growth on a TTM bassis is -8% vis-vis a compounded sales growth of -9% over the last 3 Years. – The compounded profit growth on a TTM basis is -43% vis-vis a compounded profit growth of -34% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2021 fii holding stood at 0.0% vis-vis 0.0% for Dec 2020 – Public shareholding has remained largely constant. The Mar 2021 public holding stood at 58.01% vis-vis 58.03% for Dec 2020
Conclusion
– Stock is trading at 0.45 times its book value – has low interest coverage ratio.
-The company has delivered a poor sales growth of -6.84% over past five years.
– has a low return on equity of 2.75% for last 3 years.
– might be capitalizing the interest cost
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 50.81 and is trading at 54.5 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
