Mehabe score: 1 G Factor: 3 Piotski Score: 6 The stock has a rating SELL. 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 3 and Piotski score of 6.
Description
Fine Organic Industries is carries on business in India and abroad, as manufacturers, processors, suppliers, distributors, dealers, importers, exporters of wide range of oleochemical-based additives used in foods, plastics, cosmetics, coatings and other specialty application in various industries.
Main Points
Largest in India and among top 6 global players #
Fine Organic is the largest manufacturer of oleochemical-based niche additives in India. It is among the six largest global players in polymer additives and among leading global players in specialty food emulsifiers.Site:FINEORGMain Symbol:FINEORG
Stock trades at 2930.0, below its 50dma 2946.68. However it is trading above its 200dma 2678.12. The stock remains weak in the short term due to near term bearish momentum. However overall bullish structure remains intact. Price action will further build up as it moves above its dma50, currently situated at 2946.68.
The 52 week high is at 3568.80 and the 52week low is at 2016.00
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
– is almost debt free.
– has a good return on equity (ROE) track record: 3 Years ROE 25.03%
– has been maintaining a healthy dividend payout of 18.94%
Weakness
– Stock is trading at 12.28 times its book value
Competition
– The industry trades at a mean P/E of 30.4x. Pidilite Inds. trades at the industry’s max P/E of 103.19x. FINEORG trades at a P/E of 74.7x
– Industry’s mean G-Factor is 3.8 while the mean Piotski score is 8.0. FINEORG has a G-Factor of 3 and Piotski scoreof 6.
– Average 1 month return for industry is 14.5%. The max 1- month return was given by Gujarat Fluoroch: a return of 67.55 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 323.0 cr compared to Rs 247.0 cr for period ended Mar 2020, a rise of 30.8%
Operating Profits reported at Rs 48.0 cr for period ended Mar 2021 vis-vis 57.0 for period ended Mar 2020 .
Operating Margins contracted -821.6 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 10.37 compared to Rs 9.36 for previous quarter ended Dec 2020 and Rs 11.21 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 1133.0 cr for period ended Mar 2021 vis-vis sales of Rs 1038.0 cr for the period ended Mar 2020, a growth of 8.4%. The 3 year sales cagr stood at 9.8%.
Operating margins shrank to 17.0% for period ended Mar 2021 vis-vis 23.0% for period ended Mar 2020, contraction of 600.0 bps.
Net Profit reported at Rs 120.0 cr for period ended Mar 2021 vis-vis sales of Rs 165.0 cr for the period ended Mar 2020, falling 37.5%.
Company recorded a Net Profit CAGR of 8.1% 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 worsened on its Return on Equity (RoE) metric. The RoE on Last Year basis was 18.0% compared to 25.0% over the last 3 Years. – The stock has given a return of 41% on a 1 Year basis vis-vis a return of 53% over the last 3 Years. – The compounded sales growth on a TTM bassis is 9% vis-vis a compounded sales growth of 10% over the last 3 Years. – The compounded profit growth on a TTM basis is -27% vis-vis a compounded profit growth of 8% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Jun 2021 fii holding stood at 6.8% vis-vis 5.93% for Mar 2021 – Public shareholding has remained largely constant. The Jun 2021 public holding stood at 6.79% vis-vis 4.88% for Mar 2021
Conclusion
– has reduced debt.
– is almost debt free.
– has a good return on equity (ROE) track record: 3 Years ROE 25.03%
– has been maintaining a healthy dividend payout of 18.94% – Stock is trading at 12.28 times its book value
Fundamentally, the stock remains weak. The business fundamentals are on shaky ground. Weak near term results have dampened and questioned business drivers. We suggest to wait for a upturn in business performance.
Technically, the stock reflects the poor fundamentals. The stock remains below its 50 DMA 2946.68 and is trading at 2930.0. It has shown near term lack of bullish momentum. We suggest to observe price action. However as investors, who like to avoid timing the markets, we suggest to avoid the stock
