Mehabe score: 3 G Factor: 4 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 4 and Piotski score of 4.
Description
IFB Industries Limited originally known as Indian Fine Blanks Limited started its operations in India in 1974 in collaboration with Heinrich Schmid AG of Switzerland. # It is engaged in the business of manufacturing diverse parts and accessories for motor vehicles etc. and home appliances products. #
Main Points
Products
Home Appliances Division (82% of revenue) – covers both the domestic appliance and industrial application categories and includes washing machines, domestic and industrial dishwashers, etc.
Engineering Division (17% revenue contribution) includes a product range of fine-blanked components, tools, and related machine tools like straighteners, strip loaders, etc. It mainly caters to the automobile sector (2 wheelers, 4-wheelers, and commercial vehicles).Site:IFBIND
Market Cap:
Rs 4,707 cr
Price:
1162.0
Trading pe:
127.0x
Book-value:
156/share
Div yield:
0.00 %
Earning yield:
1.23%
Face-value:
10.0/share
52week high:
1502.90
52week low:
360.00
Technical Analysis
Stock trades at 1162.0, above its 50dma 1070.68. It also trades above its 200dma 967.71. The stock remains bullish on techicals
The 52 week high is at 1502.90 and the 52week low is at 360.00
Price Chart
P/E Chart
Sales and Margin
Strengths
–
Weakness
– Stock is trading at 7.42 times its book value
-Though the company is reporting repeated profits, it is not paying out dividend
– has low interest coverage ratio.
-Tax rate seems low
– has a low return on equity of 9.44% for last 3 years.
Competition
– The industry trades at a mean P/E of 53.2x. IFB Industries trades at the industry’s max P/E of 126.79x. IFBIND trades at a P/E of 127.0x
– Industry’s mean G-Factor is 4.4 while the mean Piotski score is 9.0. IFBIND has a G-Factor of 4 and Piotski scoreof 4.
– Average 1 month return for industry is 10.2%. The max 1- month return was given by IFB Industries: a return of 27.87 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 799.29 cr compared to Rs 485.66 cr for period ended Mar 2020, a rise of 64.6%
Operating Profits reported at Rs 51.87 cr for period ended Mar 2021 vis-vis 1.58 for period ended Mar 2020 .
Operating Margins expanded 616.4 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 1.56 compared to Rs 16.37 for previous quarter ended Dec 2020 and Rs -4.5 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 2717.0 cr for period ended Mar 2021 vis-vis sales of Rs 2551.0 cr for the period ended Mar 2020, a growth of 6.1%. The 3 year sales cagr stood at 8.1%.
Operating margins expanded to 8.0% for period ended Mar 2021 vis-vis 5.0% for period ended Mar 2020, expansion of 300.0 bps.
Net Profit reported at Rs 62.0 cr for period ended Mar 2021 vis-vis sales of Rs 28.0 cr for the period ended Mar 2020, rising 54.8%.
Company reported a poor Net Profit CAGR of -9.3% over the last 3 years
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 4.0% compared to 9.0% over the last 3 Years. – The stock has given a return of 192% on a 1 Year basis vis-vis a return of -2% over the last 3 Years. – The compounded sales growth on a TTM bassis is -11% vis-vis a compounded sales growth of 14% over the last 3 Years. – The compounded profit growth on a TTM basis is -27% vis-vis a compounded profit growth of -21% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2021 fii holding stood at 8.11% vis-vis 8.42% for Dec 2020 – Public shareholding has remained largely constant. The Mar 2021 public holding stood at 15.42% vis-vis 15.28% for Dec 2020
Conclusion
– – Stock is trading at 7.42 times its book value
-Though the company is reporting repeated profits, it is not paying out dividend
– has low interest coverage ratio.
-Tax rate seems low
– has a low return on equity of 9.44% for 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 1070.68 and is trading at 1162.0 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
