Mehabe score: 6 G Factor: 5 Piotski Score: 4 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 4.
Description
Confidence Petroleum India Limited is an India-based manufacturer of liquefied petroleum gas (LPG) cylinders for domestic, as well as commercial use.Site:CONFIPETMain Symbol:CONFIPET
Stock trades at 61.6, above its 50dma 59.9. It also trades above its 200dma 47.15. The stock remains bullish on techicals
The 52 week high is at 68.45 and the 52week low is at 17.10
Price Chart
P/E Chart
Sales and Margin
Strengths
– is expected to give good quarter
– has delivered good profit growth of 114.92% CAGR over last 5 years
Weakness
– has a low return on equity of 13.66% for last 3 years.
Competition
– The industry trades at a mean P/E of 28.2x. Jubilant Ingrevia trades at the industry’s max P/E of 155.35x. CONFIPET trades at a P/E of 23.6x
– Industry’s mean G-Factor is 4.2 while the mean Piotski score is 9.0. CONFIPET has a G-Factor of 5 and Piotski scoreof 4.
– Average 1 month return for industry is 10.9%. The max 1- month return was given by C D S L: a return of 36.51 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 222.0 cr compared to Rs 93.0 cr for period ended Jun 2020, a rise of 138.7%
Operating Profits reported at Rs 38.0 cr for period ended Jun 2021 vis-vis 4.0 for period ended Jun 2020 .
Operating Margins expanded 1281.6 bps for period ended Jun 2021 vis-vis Jun 2020 .
The EPS for Jun 2021 was Rs 0.63 compared to Rs 0.92 for previous quarter ended Mar 2021 and Rs -0.26 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 992.0 cr for period ended TTM vis-vis sales of Rs 863.0 cr for the period ended Mar 2021, a healthy growth of 13.0%. The 3 year sales cagr stood at -0.4%.
Operating margins expanded to 16.0% for period ended TTM vis-vis 14.0% for period ended Mar 2021, expansion of 200.0 bps.
Net Profit reported at Rs 74.0 cr for period ended TTM vis-vis sales of Rs 49.0 cr for the period ended Mar 2021, rising 33.8%.
Company recorded a Net Profit CAGR of 3.4% 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 98.0 cr for period ended Mar 2021 vis-vis Rs 66.0 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 worsened on its Return on Equity (RoE) metric. The RoE on Last Year basis was 10.0% compared to 14.0% over the last 3 Years. – The stock has given a return of 232% 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 12% over the last 3 Years. – The compounded profit growth on a TTM basis is 146% vis-vis a compounded profit growth of 22% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Jun 2021 fii holding stood at 6.41% vis-vis 6.32% for Mar 2021 – Public shareholding has remained largely constant. The Jun 2021 public holding stood at 36.19% vis-vis 36.27% for Mar 2021
Conclusion
– is expected to give good quarter
– has delivered good profit growth of 114.92% CAGR over last 5 years – has a low return on equity of 13.66% 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 59.9 and is trading at 61.6 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
