Mehabe score: 4 G Factor: 2 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 2 and Piotski score of 3.
Description
Dharani Sugars & Chemicals is engaged in the business of manufacturing white sugar, generation of electricity and production of industrial alcohol.Site:DHARSUGARMain Symbol:DHARSUGAR
Stock trades at 20.0, above its 50dma 19.06. It also trades above its 200dma 13.34. The stock remains bullish on techicals
The 52 week high is at 36.50 and the 52week low is at 3.97
Price Chart
P/E Chart
Sales and Margin
Strengths
–
Weakness
– has low interest coverage ratio.
-The company has delivered a poor sales growth of -38.86% over past five years.
-Promoters have pledged 53.98% of their holding.
Competition
– The industry trades at a mean P/E of 12.9x. Bannari Amm.Sug. trades at the industry’s max P/E of 26.61x. DHARSUGAR trades at a P/E of x
– Industry’s mean G-Factor is 3.5 while the mean Piotski score is 8.0. DHARSUGAR has a G-Factor of 2 and Piotski scoreof 3.
– Average 1 month return for industry is -9.6%. The max 1- month return was given by Bannari Amm.Sug.: a return of -0.6 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 29.45 cr compared to Rs 24.1 cr for period ended Jun 2020, a rise of 22.2%
Company reported negative operating profit of Rs -1.32 cr for period ended Jun 2021. For same period last year, operating profit was -1.84
The EPS for Jun 2021 was Rs -2.43 compared to Rs -4.14 for previous quarter ended Mar 2021 and Rs -2.2 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 36.0 cr for period ended TTM vis-vis sales of Rs 31.0 cr for the period ended Mar 2021, a healthy growth of 13.9%. The 3 year sales cagr stood at -51.5%.
Operating margins expanded to -49.0% for period ended TTM vis-vis -59.0% for period ended Mar 2021, expansion of 1000.0 bps.
Net Profit reported at Rs -39.0 cr for period ended TTM vis-vis sales of Rs -38.0 cr for the period ended Mar 2021, falling 0%.
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 stock has given a return of 309% on a 1 Year basis vis-vis a return of 14% over the last 3 Years. – The compounded sales growth on a TTM bassis is -72% vis-vis a compounded sales growth of -60% over the last 3 Years. – The compounded profit growth on a TTM basis is 41% vis-vis a compounded profit growth of 16% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Jun 2021 public holding stood at 38.44% vis-vis 38.44% for Mar 2021
Conclusion
– – has low interest coverage ratio.
-The company has delivered a poor sales growth of -38.86% over past five years.
-Promoters have pledged 53.98% of their holding.
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 19.06 and is trading at 20.0 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
