Mehabe score: 5 G Factor: 2 Piotski Score: 7 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 7.
Description
Emami Paper Mills Ltd is Indias one of the largest producer of Newsprint, Writing & Printing Paper and Multilayer Coated High-end Packaging Boards.Site:EMAMIPAPMain Symbol:EMAMIPAP
Stock trades at 196.0, above its 50dma 162.1. It also trades above its 200dma 125.4. The stock remains bullish on techicals
The 52 week high is at 214.90 and the 52week low is at 60.60
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
Weakness
– has low interest coverage ratio.
– has a low return on equity of 4.29% for last 3 years.
-Earnings include an other income of Rs.76.66 Cr.
-Dividend payout has been low at 5.50% of profits over last 3 years
Competition
– The industry trades at a mean P/E of 23.8x. Century Textiles trades at the industry’s max P/E of 273.7x. EMAMIPAP trades at a P/E of 78.9x
– Industry’s mean G-Factor is 3.9 while the mean Piotski score is 7.0. EMAMIPAP has a G-Factor of 2 and Piotski scoreof 7.
– Average 1 month return for industry is 8.1%. The max 1- month return was given by Emami Paper: a return of 24.04 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 411.0 cr compared to Rs 375.0 cr for period ended Mar 2020, a rise of 9.6%
Operating Profits reported at Rs 68.0 cr for period ended Mar 2021 vis-vis 42.0 for period ended Mar 2020 .
Operating Margins expanded 534.5 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 7.81 compared to Rs 0.48 for previous quarter ended Dec 2020 and Rs -5.13 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 1216.0 cr for period ended Mar 2021 vis-vis sales of Rs 1515.0 cr for the period ended Mar 2020, a fall of 24.6%. The 3 year sales cagr stood at -3.6%.
Operating margins expanded to 16.0% for period ended Mar 2021 vis-vis 14.0% for period ended Mar 2020, expansion of 200.0 bps.
Net Profit reported at Rs 51.0 cr for period ended Mar 2021 vis-vis sales of Rs -10.0 cr for the period ended Mar 2020, rising 119.6%.
Company recorded a healthy Net Profit CAGR of 47.2% over the last 3 years
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 3.0% compared to 4.0% over the last 3 Years. – The stock has given a return of 176% on a 1 Year basis vis-vis a return of -9% over the last 3 Years. – The compounded sales growth on a TTM bassis is -20% vis-vis a compounded sales growth of -4% over the last 3 Years. – The compounded profit growth on a TTM basis is 41% vis-vis a compounded profit growth of -1% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Jun 2021 fii holding stood at 0.5% vis-vis 0.5% for Mar 2021 – Public shareholding has remained largely constant. The Jun 2021 public holding stood at 17.89% vis-vis 17.84% for Mar 2021
Conclusion
– has reduced debt. – has low interest coverage ratio.
– has a low return on equity of 4.29% for last 3 years.
-Earnings include an other income of Rs.76.66 Cr.
-Dividend payout has been low at 5.50% of profits over 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 162.1 and is trading at 196.0 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
