Mehabe score: 3 G Factor: 5 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 5 and Piotski score of 3.
Description
Chemfab Alkalis is engaged in the Business of Manufacture of Inorganic Chemicals and trading of PVCO Pipes.Site:CHEMFAB
Market Cap:
Rs 207 cr
Price:
147.0
Trading pe:
x
Book-value:
190/share
Div yield:
0.85 %
Earning yield:
1.94%
Face-value:
10.0/share
52week high:
178.00
52week low:
115.00
Technical Analysis
Stock trades at 147.0, above its 50dma 146.98. It also trades above its 200dma 141.57. The stock remains bullish on techicals
The 52 week high is at 178.00 and the 52week low is at 115.00
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
– is almost debt free.
-Stock is trading at 0.77 times its book value
Weakness
– has low interest coverage ratio.
– has a low return on equity of 6.09% for last 3 years.
Competition
– The industry trades at a mean P/E of 29.4x. Pidilite Inds. trades at the industry’s max P/E of 97.44x. CHEMFAB trades at a P/E of x
– Industry’s mean G-Factor is 3.6 while the mean Piotski score is 8.0. CHEMFAB has a G-Factor of 5 and Piotski scoreof 3.
– Average 1 month return for industry is 5.9%. The max 1- month return was given by Navin Fluo.Intl.: a return of 17.2 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 51.0 cr compared to Rs 41.0 cr for period ended Mar 2020, a rise of 24.4%
Operating Profits reported at Rs 3.0 cr for period ended Mar 2021 vis-vis 7.0 for period ended Mar 2020 .
Operating Margins contracted -1119.1 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs -8.29 compared to Rs 0.93 for previous quarter ended Dec 2020 and Rs 1.37 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 181.0 cr for period ended Mar 2021 vis-vis sales of Rs 205.0 cr for the period ended Mar 2020, a fall of 13.3%. The 3 year sales cagr stood at 0.2%.
Operating margins shrank to 13.0% for period ended Mar 2021 vis-vis 27.0% for period ended Mar 2020, contraction of 1400.0 bps.
Net Profit reported at Rs -8.0 cr for period ended Mar 2021 vis-vis sales of Rs 26.0 cr for the period ended Mar 2020, falling 0%.
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
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 -3.0% compared to 6.0% over the last 3 Years. – The stock has given a return of 14% on a 1 Year basis vis-vis a return of -6% over the last 3 Years. – The compounded sales growth on a TTM bassis is -12% vis-vis a compounded sales growth of 0% over the last 3 Years. – The compounded profit growth on a TTM basis is -129% vis-vis a compounded profit growth of % over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2021 fii holding stood at 0.0% vis-vis 0.0% for Dec 2020 – Public shareholding has remained largely constant. The Mar 2021 public holding stood at 26.17% vis-vis 26.08% for Dec 2020
Conclusion
– has reduced debt.
– is almost debt free.
-Stock is trading at 0.77 times its book value – has low interest coverage ratio.
– has a low return on equity of 6.09% 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 146.98 and is trading at 147.0 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
