Mehabe score: 3 G Factor: 4 Piotski Score: 5 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 4 and Piotski score of 5.
Description
DFM Foods Ltd. is in the business of manufacturing, selling, and marketing packaged snack foods and has been a leader in the space for over 25 years. It offers a complete range of products consisting of 18 distinct product variants (12 in namkeen segment and 6 in the snacks segment) that include bhujiya, daal, mixtures, and nut-mixes. #
The company sells its products under the brand name “CRAX”, “CURLS” “NATKHAT” & “FRITTS”. Crax was one of the earliest readymade snacks that were launched in India in 1984.
The CRAX Namkeen range offers Aloo Bhujia, Navratan, Moong Dal, Matar Heeng Zeera, Khatta Meetha, Lacha Mixture, Corn Flakes, Mast Moongphali, and salted peanuts which are sold in several pack sizes.
Main Points
Revenue
DFM revenue is concentrated in North India (primarily in Tier-I & Tier-II cities) from where it derives around 75%-80% of its revenue.#Site:DFMFOODS
Market Cap:
Rs 2,205 cr
Price:
439.0
Trading pe:
83.0x
Book-value:
33.0/share
Div yield:
0.00 %
Earning yield:
2.35%
Face-value:
2.00/share
52week high:
444.00
52week low:
170.00
Technical Analysis
Stock trades at 439.0, above its 50dma 364.63. It also trades above its 200dma 348.18. The stock remains bullish on techicals
The 52 week high is at 444.00 and the 52week low is at 170.00
Price Chart
P/E Chart
Sales and Margin
Strengths
– has a good return on equity (ROE) track record: 3 Years ROE 23.53%
-‘s median sales growth is 16.88% of last 10 years
Weakness
– Stock is trading at 13.30 times its book value
-The company has delivered a poor sales growth of 11.92% over past five years.
Competition
– The industry trades at a mean P/E of 39.3x. Hindustan Foods trades at the industry’s max P/E of 116.69x. DFMFOODS trades at a P/E of 83.0x
– Industry’s mean G-Factor is 4.2 while the mean Piotski score is 8.0. DFMFOODS has a G-Factor of 4 and Piotski scoreof 5.
– Average 1 month return for industry is 5.8%. The max 1- month return was given by DFM Foods: a return of 30.25 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 132.48 cr compared to Rs 109.76 cr for period ended Mar 2020, a rise of 20.7%
Operating Profits reported at Rs 6.49 cr for period ended Mar 2021 vis-vis 2.1 for period ended Mar 2020 .
Operating Margins expanded 298.6 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 0.18 compared to Rs 1.89 for previous quarter ended Dec 2020 and Rs -0.25 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 524.0 cr for period ended Mar 2021 vis-vis sales of Rs 508.0 cr for the period ended Mar 2020, a growth of 3.1%. The 3 year sales cagr stood at 7.2%.
Operating margins expanded to 11.0% for period ended Mar 2021 vis-vis 8.0% for period ended Mar 2020, expansion of 300.0 bps.
Net Profit reported at Rs 29.0 cr for period ended Mar 2021 vis-vis sales of Rs 24.0 cr for the period ended Mar 2020, rising 17.2%.
Company recorded a Net Profit CAGR of 8.0% over the last 3 years
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 company has worsened on its Return on Equity (RoE) metric. The RoE on Last Year basis was 18.0% compared to 24.0% over the last 3 Years. – The stock has given a return of 117% on a 1 Year basis vis-vis a return of 19% over the last 3 Years. – The compounded sales growth on a TTM bassis is -5% vis-vis a compounded sales growth of 14% over the last 3 Years. – The compounded profit growth on a TTM basis is -25% vis-vis a compounded profit growth of 10% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2021 fii holding stood at 0.04% vis-vis 0.0% for Dec 2020 – Public shareholding has remained largely constant. The Mar 2021 public holding stood at 25.25% vis-vis 25.29% for Dec 2020
Conclusion
– has a good return on equity (ROE) track record: 3 Years ROE 23.53%
-‘s median sales growth is 16.88% of last 10 years – Stock is trading at 13.30 times its book value
-The company has delivered a poor sales growth of 11.92% over past five years.
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 364.63 and is trading at 439.0, thus bullish price action wise.
