Mehabe score: 1 G Factor: 1 Piotski Score: 3 The stock has a rating SELL. 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 3.
Description
Birla Tyres Limited was incorporated as a public limited company on 22nd November 2018 #
The company commenced its business on 1st January 2019, as a standalone tyre business company after the demerger of tyre division from Kesoram Industries Limited. #Site:BIRLATYREMain Symbol:BIRLATYRES
Stock trades at 27.0, below its 50dma 28.17. However it is trading above its 200dma 26.27. 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 28.17.
The 52 week high is at 43.15 and the 52week low is at 18.20
Price Chart
P/E Chart
Sales and Margin
Strengths
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Weakness
– has low interest coverage ratio.
-Contingent liabilities of Rs.229.18 Cr.
-Promoters have pledged 37.61% of their holding.
– has high debtors of 282.36 days.
-‘s cost of borrowing seems high
Competition
– The industry trades at a mean P/E of 20.0x. Balkrishna Inds trades at the industry’s max P/E of 34.4x. BIRLATYRE trades at a P/E of x
– Industry’s mean G-Factor is 4.5 while the mean Piotski score is 8.0. BIRLATYRE has a G-Factor of 1 and Piotski scoreof 3.
– Average 1 month return for industry is 1.1%. The max 1- month return was given by JK Tyre & Indust: a return of 12.99 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 3.0 cr compared to Rs 29.0 cr for period ended Jun 2020, a fall of 89.7%
Company reported negative operating profit of Rs -12.0 cr for period ended Jun 2021. For same period last year, operating profit was -38.0
The EPS for Jun 2021 was Rs -4.22 compared to Rs -3.51 for previous quarter ended Mar 2021 and Rs -6.21 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 111.0 cr for period ended TTM vis-vis sales of Rs 137.0 cr for the period ended Mar 2021, a fall of 23.4%.
Operating margins expanded to -73.0% for period ended TTM vis-vis -78.0% for period ended Mar 2021, expansion of 500.0 bps.
Net Profit reported at Rs -259.0 cr for period ended TTM vis-vis sales of Rs -288.0 cr for the period ended Mar 2021, rising 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 stock has given a return of 21% on a 1 Year basis vis-vis a return of % over the last 3 Years. – The compounded sales growth on a TTM bassis is -71% vis-vis a compounded sales growth of % over the last 3 Years. – The compounded profit growth on a TTM basis is -0% 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 0.0% vis-vis 0.0% for Mar 2021 – Public shareholding has remained largely constant. The Jun 2021 public holding stood at 45.78% vis-vis 44.48% for Mar 2021
Conclusion
– – has low interest coverage ratio.
-Contingent liabilities of Rs.229.18 Cr.
-Promoters have pledged 37.61% of their holding.
– has high debtors of 282.36 days.
-‘s cost of borrowing seems high
Fundamentally, the stock remains weak. The business fundamentals are on shaky ground. Weak near term results have dampened and questioned business drivers. We suggest to wait for a upturn in business performance.
Technically, the stock reflects the poor fundamentals. The stock remains below its 50 DMA 28.17 and is trading at 27.0. It has shown near term lack of bullish momentum. We suggest to observe price action. However as investors, who like to avoid timing the markets, we suggest to avoid the stock
