Mehabe score: 6 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
Bal Pharma is engaged in the business of manufacturing and selling of pharmaceutical products. The company caters to both domestic and international markets.Site:BALPHARMAMain Symbol:BALPHARMA
Stock trades at 97.1, above its 50dma 95.07. It also trades above its 200dma 73.2. The stock remains bullish on techicals
The 52 week high is at 137.95 and the 52week low is at 39.00
Price Chart
P/E Chart
Sales and Margin
Strengths
– Promoter holding has increased by 2.53% over last quarter.
Weakness
– Stock is trading at 2.70 times its book value
– has low interest coverage ratio.
-The company has delivered a poor sales growth of -1.78% over past five years.
– has a low return on equity of -3.01% for last 3 years.
Competition
– The industry trades at a mean P/E of 31.8x. Sun Pharma.Inds. trades at the industry’s max P/E of 55.09x. BALPHARMA trades at a P/E of x
– Industry’s mean G-Factor is 2.2 while the mean Piotski score is 9.0. BALPHARMA has a G-Factor of 4 and Piotski scoreof 3.
– Average 1 month return for industry is 1.0%. The max 1- month return was given by Piramal Enterp.: a return of 7.03 %
Quarterly Results
Sales for period ended Dec 2020 is Rs 63.03 cr compared to Rs 43.17 cr for period ended Dec 2019, a rise of 46.0%
Operating Profits reported at Rs 5.93 cr for period ended Dec 2020 vis-vis 0.71 for period ended Dec 2019 .
Operating Margins expanded 776.4 bps for period ended Dec 2020 vis-vis Dec 2019 .
The EPS for Dec 2020 was Rs 0.23 compared to Rs 0.3 for previous quarter ended Sep 2020 and Rs -2.52 for Dec 2019
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 213.0 cr for period ended TTM vis-vis sales of Rs 171.0 cr for the period ended Mar 2020, a healthy growth of 19.7%. The 3 year sales cagr stood at 0.3%.
Operating margins expanded to 9.0% for period ended TTM vis-vis 3.0% for period ended Mar 2020, expansion of 600.0 bps.
Net Profit reported at Rs -4.0 cr for period ended TTM vis-vis sales of Rs -12.0 cr for the period ended Mar 2020, rising 0%.
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 23.0 cr for period ended Mar 2020 vis-vis Rs 8.0 cr for period ended Mar 2019
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 -21.0% compared to -3.0% over the last 3 Years. – The stock has given a return of 131% on a 1 Year basis vis-vis a return of 8% over the last 3 Years. – The compounded sales growth on a TTM bassis is 11% vis-vis a compounded sales growth of -9% over the last 3 Years. – The compounded profit growth on a TTM basis is 46% vis-vis a compounded profit growth of % over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has fallen for the period ended Mar 2021. The Mar 2021 public holding stood at 55.02% vis-vis 57.55% for Dec 2020
Conclusion
– Promoter holding has increased by 2.53% over last quarter. – Stock is trading at 2.70 times its book value
– has low interest coverage ratio.
-The company has delivered a poor sales growth of -1.78% over past five years.
– has a low return on equity of -3.01% for last 3 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 95.07 and is trading at 97.1 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
