Mehabe score: 4 G Factor: 5 Piotski Score: 6 The stock has a rating 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 6.
Description
Established in 1991, DCM commenced its spinning operations at its manufacturing plant in Hisar. DCM Nouvelle is leading manufacturer & exporter of 100% cotton carded and combed yarns .
Main Points
Well recognised brand
DCM’s brand Primero and Dinero are well recognised in the markets among high end customers due to controlled contaminations and better tensile properties.
During 2020, DCM has launched its latest brand CCY i.e.. Contamination Controlled Yarn which is produced from unit 1.
It has a strong presence in domestic markets and have exported its products to more than 30 countries.Site:DCMNVLMain Symbol:DCMNVL
Stock trades at 141.0, above its 50dma 118.5. It also trades above its 200dma 79.51. The stock remains bullish on techicals
The 52 week high is at 144.15 and the 52week low is at 22.00
Price Chart
P/E Chart
Sales and Margin
Strengths
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Weakness
– Though the company is reporting repeated profits, it is not paying out dividend
– might be capitalizing the interest cost
-Debtor days have increased from 43.97 to 60.36 days.
Competition
– The industry trades at a mean P/E of 13.8x. Arvind Ltd trades at the industry’s max P/E of 988.52x. DCMNVL trades at a P/E of 8.64x
– Industry’s mean G-Factor is 4.6 while the mean Piotski score is 8.0. DCMNVL has a G-Factor of 5 and Piotski scoreof 6.
– Average 1 month return for industry is 7.6%. The max 1- month return was given by Nitin Spinners: a return of 25.95 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 187.0 cr compared to Rs 141.0 cr for period ended Mar 2020, a rise of 32.6%
Operating Profits reported at Rs 37.0 cr for period ended Mar 2021 vis-vis 11.0 for period ended Mar 2020 .
Operating Margins expanded 1198.5 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 13.1 compared to Rs 6.56 for previous quarter ended Dec 2020 and Rs 0.92 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 563.0 cr for period ended Mar 2021 vis-vis sales of Rs 585.0 cr for the period ended Mar 2020, a fall of 3.9%.
Operating margins expanded to 11.0% for period ended Mar 2021 vis-vis 5.0% for period ended Mar 2020, expansion of 600.0 bps.
Net Profit reported at Rs 31.0 cr for period ended Mar 2021 vis-vis sales of Rs 4.0 cr for the period ended Mar 2020, rising 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 had stable/constant Return on Equity (RoE) metric. The RoE on Last Year basis was 18.0% compared to 19.0% over the last 3 Years. – The stock has given a return of 405% on a 1 Year basis vis-vis a return of % over the last 3 Years. – The compounded sales growth on a TTM bassis is -4% vis-vis a compounded sales growth of % over the last 3 Years. – The compounded profit growth on a TTM basis is 606% vis-vis a compounded profit growth of 1351% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Mar 2021 public holding stood at 43.35% vis-vis 43.35% for Dec 2020
Conclusion
– – Though the company is reporting repeated profits, it is not paying out dividend
– might be capitalizing the interest cost
-Debtor days have increased from 43.97 to 60.36 days.
The business fundamentals of the stock remain stable. Stronger near term results will build interest in the stock. We suggest to wait for a upturn in business performance.
Technically, the stock remains above its 50 DMA 118.5 and is trading at 141.0, thus bullish price action wise.
