Mehabe score: 3 G Factor: 6 Piotski Score: 7 The stock has a rating 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 6 and Piotski score of 7.
Description
Associated Alcohols & Breweries Ltd is in business of manufacturing and trading of ENA, Indian Made Indian Liquor (Country Liquor), Indian Made Foreign Liquor and Hand sanitizer.#
Main Points
Revenue Breakup
Company’s operations are divided into 2 main parts :-
Manufacturing Business (35% of revenues)
a. Merchant ENA (21%)
b. Contract Manufacturing (3%)
c. by-products (10%)
a. Indian made India liquor (30%)
b. Indian made Foreign liquor (17%)
c. Licensed brands (19%)Site:ASALCBRMain Symbol:ASALCBR
Stock trades at 450.0, below its 50dma 460.88. However it is trading above its 200dma 394.09. The stock remains weak in the short term due to near term bearish momentum. However overall bullish structure remains intact. Price action will further build up as it moves above its dma50, currently situated at 460.88.
The 52 week high is at 516.00 and the 52week low is at 236.65
Price Chart
P/E Chart
Sales and Margin
Strengths
– is almost debt free.
– has delivered good profit growth of 31.63% CAGR over last 5 years
– has a good return on equity (ROE) track record: 3 Years ROE 26.08%
Weakness
– The company has delivered a poor sales growth of 8.67% over past five years.
Competition
– The industry trades at a mean P/E of 30.5x. United Breweries trades at the industry’s max P/E of 142.07x. ASALCBR trades at a P/E of 14.0x
– Industry’s mean G-Factor is 4.1 while the mean Piotski score is 9.0. ASALCBR has a G-Factor of 6 and Piotski scoreof 7.
– Average 1 month return for industry is 13.1%. The max 1- month return was given by Jubilant Inds.: a return of 55.49 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 80.0 cr compared to Rs 58.0 cr for period ended Jun 2020, a rise of 37.9%
Operating Profits reported at Rs 16.0 cr for period ended Jun 2021 vis-vis 9.0 for period ended Jun 2020 .
Operating Margins expanded 448.3 bps for period ended Jun 2021 vis-vis Jun 2020 .
The EPS for Jun 2021 was Rs 5.61 compared to Rs 8.34 for previous quarter ended Mar 2021 and Rs 2.64 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 458.0 cr for period ended TTM vis-vis sales of Rs 436.0 cr for the period ended Mar 2021, a growth of 4.8%. The 3 year sales cagr stood at 4.7%.
Net Profit reported at Rs 63.0 cr for period ended TTM vis-vis sales of Rs 58.0 cr for the period ended Mar 2021, rising 7.9%.
Company recorded a healthy Net Profit CAGR of 28.1% 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 67.0 cr for period ended Mar 2021 vis-vis Rs 58.0 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 26.0% compared to 26.0% over the last 3 Years. – The stock has given a return of 72% on a 1 Year basis vis-vis a return of 9% over the last 3 Years. – The compounded sales growth on a TTM bassis is -17% vis-vis a compounded sales growth of 10% over the last 3 Years. – The compounded profit growth on a TTM basis is 15% vis-vis a compounded profit growth of 31% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Jun 2021 fii holding stood at 1.63% vis-vis 0.94% for Mar 2021 – Public shareholding has remained largely constant. The Jun 2021 public holding stood at 39.91% vis-vis 40.6% for Mar 2021
Conclusion
– is almost debt free.
– has delivered good profit growth of 31.63% CAGR over last 5 years
– has a good return on equity (ROE) track record: 3 Years ROE 26.08% – The company has delivered a poor sales growth of 8.67% over past five years.
The business fundamentals of the stock remain stable. Stronger near term results will build interest in the stock. We suggest to wait for a upturn in business performance.
Technically, the stock remains below its 50 DMA 460.88 and is trading at 450.0. Shows a near term lack of buying interest.
