Mehabe score: 6 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
IFB Agro Industries is engaged in the business of manufacturing alcohol, bottling of branded alcoholic beverages as well as processed marine foods both for domestic and export markets.Site:IFBAGROMain Symbol:IFBAGRO
Stock trades at 614.0, above its 50dma 538.59. It also trades above its 200dma 451.44. The stock remains bullish on techicals
The 52 week high is at 674.10 and the 52week low is at 260.00
Price Chart
P/E Chart
Sales and Margin
Strengths
– is almost debt free.
Weakness
– Though the company is reporting repeated profits, it is not paying out dividend
-The company has delivered a poor sales growth of 2.23% over past five years.
– has a low return on equity of 8.95% for last 3 years.
-Debtor days have increased from 33.44 to 54.57 days.
Competition
– The industry trades at a mean P/E of 36.2x. United Breweries trades at the industry’s max P/E of 319.71x. IFBAGRO trades at a P/E of 12.2x
– Industry’s mean G-Factor is 4.5 while the mean Piotski score is 9.0. IFBAGRO has a G-Factor of 2 and Piotski scoreof 7.
– Average 1 month return for industry is 15.9%. The max 1- month return was given by Globus Spirits: a return of 71.09 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 191.0 cr compared to Rs 195.0 cr for period ended Mar 2020, a fall of 2.1%
Company reported operating profit of Rs 17.0 cr for period ended Mar 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 Mar 2021 was Rs 15.38 compared to Rs 18.24 for previous quarter ended Dec 2020 and Rs -0.59 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 694.0 cr for period ended Mar 2021 vis-vis sales of Rs 963.0 cr for the period ended Mar 2020, a fall of 38.8%. The 3 year sales cagr stood at -7.9%.
Operating margins expanded to 8.0% for period ended Mar 2021 vis-vis 3.0% for period ended Mar 2020, expansion of 500.0 bps.
Net Profit reported at Rs 47.0 cr for period ended Mar 2021 vis-vis sales of Rs 23.0 cr for the period ended Mar 2020, rising 51.1%.
Company recorded a healthy Net Profit CAGR of 13.7% 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 38.0 cr for period ended Mar 2021 vis-vis Rs 1.0 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 11.0% compared to 9.0% over the last 3 Years. – The stock has given a return of 118% on a 1 Year basis vis-vis a return of 4% over the last 3 Years. – The compounded sales growth on a TTM bassis is -28% vis-vis a compounded sales growth of -8% over the last 3 Years. – The compounded profit growth on a TTM basis is 99% vis-vis a compounded profit growth of 14% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2021 fii holding stood at 0.16% vis-vis 0.0% for Dec 2020 – Public shareholding has remained largely constant. The Mar 2021 public holding stood at 33.72% vis-vis 33.72% for Dec 2020
Conclusion
– is almost debt free. – Though the company is reporting repeated profits, it is not paying out dividend
-The company has delivered a poor sales growth of 2.23% over past five years.
– has a low return on equity of 8.95% for last 3 years.
-Debtor days have increased from 33.44 to 54.57 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 538.59 and is trading at 614.0 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
