Mehabe score: 6 G Factor: 2 Piotski Score: 5 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 5.
Description
Hercules Hoists is engaged in the business of Lifting and Handling Equipments.Site:HERCULESMain Symbol:HERCULES
Stock trades at 163.0, above its 50dma 152.72. It also trades above its 200dma 127.7. The stock remains bullish on techicals
The 52 week high is at 179.65 and the 52week low is at 80.90
Price Chart
P/E Chart
Sales and Margin
Strengths
– is almost debt free.
-Stock is trading at 1.06 times its book value
– has been maintaining a healthy dividend payout of 47.91%
Weakness
– The company has delivered a poor sales growth of -2.97% over past five years.
– has a low return on equity of 2.59% for last 3 years.
-Earnings include an other income of Rs.8.30 Cr.
Competition
– The industry trades at a mean P/E of 27.8x. GMM Pfaudler trades at the industry’s max P/E of 93.57x. HERCULES trades at a P/E of 65.9x
– Industry’s mean G-Factor is 3.1 while the mean Piotski score is 8.0. HERCULES has a G-Factor of 2 and Piotski scoreof 5.
– Average 1 month return for industry is -0.8%. The max 1- month return was given by Bharat Dynamics: a return of 2.61 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 21.98 cr compared to Rs 7.35 cr for period ended Jun 2020, a rise of 199.0%
Company reported operating profit of Rs 1.96 cr for period ended Jun 2021, operating profit margin at 8.9 %.
Operating profit was negative for the same period last year thus company has improved its margins this year
The EPS for Jun 2021 was Rs 0.43 compared to Rs 0.81 for previous quarter ended Mar 2021 and Rs 0.08 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 93.0 cr for period ended TTM vis-vis sales of Rs 78.37 cr for the period ended Mar 2021, a healthy growth of 15.7%. The 3 year sales cagr stood at -3.1%.
Operating margins expanded to 8.45% for period ended TTM vis-vis 5.3% for period ended Mar 2021, expansion of 315.0 bps.
Net Profit reported at Rs 8.9 cr for period ended TTM vis-vis sales of Rs 7.76 cr for the period ended Mar 2021, rising 12.8%.
Company reported a poor Net Profit CAGR of -11.4% 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 15.54 cr for period ended Mar 2021 vis-vis Rs 10.22 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 2.0% compared to 3.0% over the last 3 Years. – The stock has given a return of 94% on a 1 Year basis vis-vis a return of 11% over the last 3 Years. – The compounded sales growth on a TTM bassis is -6% vis-vis a compounded sales growth of 1% over the last 3 Years. – The compounded profit growth on a TTM basis is -39% vis-vis a compounded profit growth of 1% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Jun 2021 public holding stood at 30.39% vis-vis 30.39% for Mar 2021
Conclusion
– is almost debt free.
-Stock is trading at 1.06 times its book value
– has been maintaining a healthy dividend payout of 47.91% – The company has delivered a poor sales growth of -2.97% over past five years.
– has a low return on equity of 2.59% for last 3 years.
-Earnings include an other income of Rs.8.30 Cr.
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 152.72 and is trading at 163.0 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
