Mehabe score: 6 G Factor: 4 Piotski Score: 7 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 7.
Description
Elecon Engineering Company is engaged in the business of design and manufacturing Material handling Equipment and Industrial Gears and also involved in providing erection and commissioning solutions for its products.Site:ELECONMain Symbol:ELECON
Stock trades at 130.0, above its 50dma 117.88. It also trades above its 200dma 76.05. The stock remains bullish on techicals
The 52 week high is at 145.25 and the 52week low is at 21.45
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
Weakness
– The company has delivered a poor sales growth of -3.99% over past five years.
– has a low return on equity of 7.69% for last 3 years.
-Contingent liabilities of Rs.554.43 Cr.
– has high debtors of 177.39 days.
-‘s cost of borrowing seems high
Competition
– The industry trades at a mean P/E of 26.3x. GMM Pfaudler trades at the industry’s max P/E of 93.78x. ELECON trades at a P/E of 25.3x
– Industry’s mean G-Factor is 3.5 while the mean Piotski score is 8.0. ELECON has a G-Factor of 4 and Piotski scoreof 7.
– Average 1 month return for industry is 4.9%. The max 1- month return was given by ISGEC Heavy: a return of 30.16 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 350.0 cr compared to Rs 268.0 cr for period ended Mar 2020, a rise of 30.6%
Operating Profits reported at Rs 74.0 cr for period ended Mar 2021 vis-vis 28.0 for period ended Mar 2020 .
Operating Margins expanded 1069.5 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 2.82 compared to Rs 2.2 for previous quarter ended Dec 2020 and Rs 6.26 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 1045.0 cr for period ended Mar 2021 vis-vis sales of Rs 1088.0 cr for the period ended Mar 2020, a fall of 4.1%. The 3 year sales cagr stood at -4.0%.
Operating margins expanded to 18.0% for period ended Mar 2021 vis-vis 13.0% for period ended Mar 2020, expansion of 500.0 bps.
Net Profit reported at Rs 58.0 cr for period ended Mar 2021 vis-vis sales of Rs 90.0 cr for the period ended Mar 2020, falling 55.2%.
Company recorded a healthy Net Profit CAGR of 102.4% 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 248.0 cr for period ended Mar 2021 vis-vis Rs 222.0 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 had stable/constant Return on Equity (RoE) metric. The RoE on Last Year basis was 7.0% compared to 8.0% over the last 3 Years. – The stock has given a return of 404% on a 1 Year basis vis-vis a return of 31% over the last 3 Years. – The compounded sales growth on a TTM bassis is -4% vis-vis a compounded sales growth of -4% over the last 3 Years. – The compounded profit growth on a TTM basis is -36% vis-vis a compounded profit growth of 96% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2021 fii holding stood at 0.31% vis-vis 0.31% for Dec 2020 – Public shareholding has remained largely constant. The Mar 2021 public holding stood at 37.97% vis-vis 37.97% for Dec 2020
Conclusion
– has reduced debt. – The company has delivered a poor sales growth of -3.99% over past five years.
– has a low return on equity of 7.69% for last 3 years.
-Contingent liabilities of Rs.554.43 Cr.
– has high debtors of 177.39 days.
-‘s cost of borrowing seems high
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 117.88 and is trading at 130.0, thus bullish price action wise.
