Mehabe score: 4 G Factor: 1 Piotski Score: 6 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 1 and Piotski score of 6.
Description
BEML is engaged in manufacture of Rail Coaches & Spare Parts and Mining Equipment at its Bangalore Complex.Site:BEML
Market Cap:
Rs 5,517 cr
Price:
1326.0
Trading pe:
57.6x
Book-value:
504/share
Div yield:
0.45 %
Earning yield:
1.53%
Face-value:
10.0/share
52week high:
1544.25
52week low:
553.40
Technical Analysis
Stock trades at 1326.0, above its 50dma 1259.44. It also trades above its 200dma 1029.46. The stock remains bullish on techicals
The 52 week high is at 1544.25 and the 52week low is at 553.40
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
– has been maintaining a healthy dividend payout of 37.10%
Weakness
– Stock is trading at 2.63 times its book value
-The company has delivered a poor sales growth of 1.55% over past five years.
-Tax rate seems low
– has a low return on equity of 3.89% for last 3 years.
-Earnings include an other income of Rs.53.88 Cr.
– has high debtors of 182.22 days.
Competition
– The industry trades at a mean P/E of 24.9x. HLE Glascoat trades at the industry’s max P/E of 110.47x. BEML trades at a P/E of 57.6x
– Industry’s mean G-Factor is 3.3 while the mean Piotski score is 8.0. BEML has a G-Factor of 1 and Piotski scoreof 6.
– Average 1 month return for industry is 9.4%. The max 1- month return was given by HLE Glascoat: a return of 26.59 %
Quarterly Results
Sales for period ended Dec 2020 is Rs 728.0 cr compared to Rs 693.0 cr for period ended Dec 2019, a rise of 5.1%
Operating Profits reported at Rs 43.0 cr for period ended Dec 2020 vis-vis 26.0 for period ended Dec 2019 .
Operating Margins expanded 215.5 bps for period ended Dec 2020 vis-vis Dec 2019 .
The EPS for Dec 2020 was Rs 6.64 compared to Rs 4.13 for previous quarter ended Sep 2020 and Rs 1.02 for Dec 2019
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 3557.0 cr for period ended Mar 2021 vis-vis sales of Rs 3025.0 cr for the period ended Mar 2020, a healthy growth of 15.0%. The 3 year sales cagr stood at 3.2%.
Operating margins expanded to 4.0% for period ended Mar 2021 vis-vis 3.0% for period ended Mar 2020, expansion of 100.0 bps.
Net Profit reported at Rs 69.0 cr for period ended Mar 2021 vis-vis sales of Rs 64.0 cr for the period ended Mar 2020, rising 7.2%.
Company reported a poor Net Profit CAGR of -19.0% 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 3.0% compared to 4.0% over the last 3 Years. – The stock has given a return of 120% on a 1 Year basis vis-vis a return of 14% over the last 3 Years. – The compounded sales growth on a TTM bassis is -14% vis-vis a compounded sales growth of 7% over the last 3 Years. – The compounded profit growth on a TTM basis is 129% vis-vis a compounded profit growth of -9% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2021 fii holding stood at 1.36% vis-vis 1.47% for Dec 2020 – Public shareholding has remained largely constant. The Mar 2021 public holding stood at 23.32% vis-vis 21.67% for Dec 2020
Conclusion
– has reduced debt.
– has been maintaining a healthy dividend payout of 37.10% – Stock is trading at 2.63 times its book value
-The company has delivered a poor sales growth of 1.55% over past five years.
-Tax rate seems low
– has a low return on equity of 3.89% for last 3 years.
-Earnings include an other income of Rs.53.88 Cr.
– has high debtors of 182.22 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 1259.44 and is trading at 1326.0 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
