Mehabe score: 2 G Factor: 4 Piotski Score: 3 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 4 and Piotski score of 3.
Description
Arvind Fashions is engaged in the business of (industrial activity code-wise): Wholesale of textiles, clothing and footwear.Site:ARVINDFASNMain Symbol:ARVINDFASN
Stock trades at 210.0, above its 50dma 162.13. It also trades above its 200dma 155.9. The stock remains bullish on techicals
The 52 week high is at 224.90 and the 52week low is at 117.17
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
Weakness
– Stock is trading at 4.56 times its book value
– has low interest coverage ratio.
– has a low return on equity of -36.70% for last 3 years.
-Earnings include an other income of Rs.83.12 Cr.
-Debtor days have increased from 82.19 to 103.74 days.
Competition
– The industry trades at a mean P/E of 125.4x. Avenue Super. trades at the industry’s max P/E of 196.38x. ARVINDFASN trades at a P/E of x
– Industry’s mean G-Factor is 4.1 while the mean Piotski score is 6.0. ARVINDFASN has a G-Factor of 4 and Piotski scoreof 3.
– Average 1 month return for industry is 20.7%. The max 1- month return was given by Arvind Fashions.: a return of 53.1 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 769.0 cr compared to Rs 673.0 cr for period ended Mar 2020, a rise of 14.3%
Company reported operating profit of Rs 38.0 cr for period ended Mar 2021, operating profit margin at 4.9 %.
Operating profit was negative for the same period last year thus company has improved its margins this year
The EPS for Mar 2021 was Rs -9.1 compared to Rs -5.99 for previous quarter ended Dec 2020 and Rs -18.0 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 2201.0 cr for period ended Mar 2021 vis-vis sales of Rs 3866.0 cr for the period ended Mar 2020, a fall of 75.6%. The 3 year sales cagr stood at -19.5%.
Operating margins shrank to -5.0% for period ended Mar 2021 vis-vis 5.0% for period ended Mar 2020, contraction of 1000.0 bps.
Net Profit reported at Rs -580.0 cr for period ended Mar 2021 vis-vis sales of Rs -401.0 cr for the period ended Mar 2020, falling 0%.
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 -96.0% compared to -37.0% over the last 3 Years. – The stock has given a return of 69% on a 1 Year basis vis-vis a return of % over the last 3 Years. – The compounded sales growth on a TTM bassis is -43% vis-vis a compounded sales growth of -20% over the last 3 Years. – The compounded profit growth on a TTM basis is -35% vis-vis a compounded profit growth of % over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Jun 2021 fii holding stood at 7.95% vis-vis 8.02% for Mar 2021 – Public shareholding has risen for the period ended Jun 2021. The Jun 2021 public holding stood at 42.96% vis-vis 40.01% for Mar 2021
Conclusion
– has reduced debt. – Stock is trading at 4.56 times its book value
– has low interest coverage ratio.
– has a low return on equity of -36.70% for last 3 years.
-Earnings include an other income of Rs.83.12 Cr.
-Debtor days have increased from 82.19 to 103.74 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 162.13 and is trading at 210.0 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
