Mehabe score: 2 G Factor: 3 Piotski Score: 4 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 3 and Piotski score of 4.
Description
Globe Textiles (India) is primarily involved in trading and manufacturing of textile products.(Source : 201903 Annual Report Page No: 58)Site:GLOBE
Market Cap:
Rs 133 cr
Price:
132.0
Trading pe:
532.0x
Book-value:
42.4/share
Div yield:
0.00 %
Earning yield:
6.65%
Face-value:
10.0/share
52week high:
125.75
52week low:
33.85
Technical Analysis
Stock trades at 132.0, above its 50dma 71.18. It also trades above its 200dma 57.88. The stock remains bullish on techicals
The 52 week high is at 125.75 and the 52week low is at 33.85
Price Chart
P/E Chart
Sales and Margin
Strengths
–
Weakness
– Stock is trading at 3.11 times its book value
-Though the company is reporting repeated profits, it is not paying out dividend
– has low interest coverage ratio.
-The company has delivered a poor sales growth of 7.26% over past five years.
– has a low return on equity of 7.01% for last 3 years.
-Earnings include an other income of Rs.4.50 Cr.
– has high debtors of 157.26 days.
Competition
– The industry trades at a mean P/E of 23.4x. Globe Textiles trades at the industry’s max P/E of 532.0x. GLOBE trades at a P/E of 532.0x
– Industry’s mean G-Factor is 3.1 while the mean Piotski score is 8.0. GLOBE has a G-Factor of 3 and Piotski scoreof 4.
– Average 1 month return for industry is 28.0%. The max 1- month return was given by Globe Textiles: a return of 169.39 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 78.74 cr compared to Rs 96.94 cr for period ended Mar 2020, a fall of 18.8%
Operating Profits reported at Rs 2.18 cr for period ended Mar 2021 vis-vis 4.18 for period ended Mar 2020 .
Operating Margins contracted -154.3 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 0.77 compared to Rs 1.75 for previous quarter ended Dec 2020 and Rs 2.22 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 259.0 cr for period ended Mar 2021 vis-vis sales of Rs 265.0 cr for the period ended Mar 2020, a fall of 2.3%. The 3 year sales cagr stood at 2.1%.
Operating margins shrank to 2.0% for period ended Mar 2021 vis-vis 4.0% for period ended Mar 2020, contraction of 200.0 bps.
Net Profit reported at Rs 0.0 cr for period ended Mar 2021 vis-vis sales of Rs 4.0 cr for the period ended Mar 2020, 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 company has worsened on its Return on Equity (RoE) metric. The RoE on Last Year basis was 1.0% compared to 7.0% over the last 3 Years. – The stock has given a return of 290% on a 1 Year basis vis-vis a return of 45% over the last 3 Years. – The compounded sales growth on a TTM bassis is -2% vis-vis a compounded sales growth of 2% over the last 3 Years. – The compounded profit growth on a TTM basis is -94% vis-vis a compounded profit growth of -58% over the last 3 Years.
Ratios
Conclusion
– – Stock is trading at 3.11 times its book value
-Though the company is reporting repeated profits, it is not paying out dividend
– has low interest coverage ratio.
-The company has delivered a poor sales growth of 7.26% over past five years.
– has a low return on equity of 7.01% for last 3 years.
-Earnings include an other income of Rs.4.50 Cr.
– has high debtors of 157.26 days.
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 71.18 and is trading at 132.0 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
