Mehabe score: 5 G Factor: 3 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 3 and Piotski score of 6.
Description
Carborundum Universal manufactures and sells Abrasives, Ceramics (Industrial Ceramics, Refractories) and Electrominerals.(Source : 202003 Annual Report Page No: 161)Site:CARBORUNIVMain Symbol:CARBORUNIV
Stock trades at 637.0, above its 50dma 588.17. It also trades above its 200dma 475.26. The stock remains bullish on techicals
The 52 week high is at 676.95 and the 52week low is at 231.60
Price Chart
P/E Chart
Sales and Margin
Strengths
– is almost debt free.
– has been maintaining a healthy dividend payout of 20.04%
Weakness
– The company has delivered a poor sales growth of 6.25% over past five years.
Competition
– The industry trades at a mean P/E of 52.9x. Wendt India trades at the industry’s max P/E of 74.98x. CARBORUNIV trades at a P/E of 41.0x
– Industry’s mean G-Factor is 3.4 while the mean Piotski score is 8.0. CARBORUNIV has a G-Factor of 3 and Piotski scoreof 6.
– Average 1 month return for industry is 15.3%. The max 1- month return was given by Orient Abrasives: a return of 23.79 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 757.0 cr compared to Rs 594.0 cr for period ended Mar 2020, a rise of 27.4%
Operating Profits reported at Rs 158.0 cr for period ended Mar 2021 vis-vis 102.0 for period ended Mar 2020 .
Operating Margins expanded 370.0 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 4.78 compared to Rs 4.63 for previous quarter ended Dec 2020 and Rs 4.87 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 2632.0 cr for period ended Mar 2021 vis-vis sales of Rs 2599.0 cr for the period ended Mar 2020, a growth of 1.3%. The 3 year sales cagr stood at 3.5%.
Operating margins expanded to 18.0% for period ended Mar 2021 vis-vis 15.0% for period ended Mar 2020, expansion of 300.0 bps.
Net Profit reported at Rs 284.0 cr for period ended Mar 2021 vis-vis sales of Rs 272.0 cr for the period ended Mar 2020, rising 4.2%.
Company recorded a Net Profit CAGR of 9.6% 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 451.0 cr for period ended Mar 2021 vis-vis Rs 407.0 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 15.0% compared to 15.0% over the last 3 Years. – The stock has given a return of 148% on a 1 Year basis vis-vis a return of 24% over the last 3 Years. – The compounded sales growth on a TTM bassis is 1% vis-vis a compounded sales growth of 3% over the last 3 Years. – The compounded profit growth on a TTM basis is 9% vis-vis a compounded profit growth of 11% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2021 fii holding stood at 7.37% vis-vis 6.52% for Dec 2020 – Public shareholding has remained largely constant. The Mar 2021 public holding stood at 22.54% vis-vis 22.73% for Dec 2020
Conclusion
– is almost debt free.
– has been maintaining a healthy dividend payout of 20.04% – The company has delivered a poor sales growth of 6.25% over past five 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 588.17 and is trading at 637.0 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
