Mehabe score: 3 G Factor: 2 Piotski Score: 5 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 2 and Piotski score of 5.
Description
The Indian Hume Pipe Co. Ltd. was incorporated in 1926. The Company is in the business of manufacturing, laying and joining of pipelines. The Company has also been undertaking infrastructure development programmes by way of execution on turnkey basis the combined water supply projects. The company also manufactures and supplies Concrete Railway Sleepers to Indian Railways. The registered office of the Company is in Mumbai.Site:INDIANHUMEMain Symbol:INDIANHUME
Stock trades at 193.0, below its 50dma 207.23 and below its 200dma 201.54. The stock remains bearish on technicals
The 52 week high is at 252.80 and the 52week low is at 153.00
Price Chart
P/E Chart
Sales and Margin
Strengths
– has been maintaining a healthy dividend payout of 18.83%
Weakness
– The company has delivered a poor sales growth of 5.74% over past five years.
– has a low return on equity of 12.39% for last 3 years.
– has high debtors of 162.70 days.
Competition
– The industry trades at a mean P/E of 34.1x. National Standar trades at the industry’s max P/E of 1551.13x. INDIANHUME trades at a P/E of 14.2x
– Industry’s mean G-Factor is 4.4 while the mean Piotski score is 7.0. INDIANHUME has a G-Factor of 2 and Piotski scoreof 5.
– Average 1 month return for industry is 19.9%. The max 1- month return was given by National Standar: a return of 152.68 %
Quarterly Results
Sales for period ended Sep 2021 is Rs 416.0 cr compared to Rs 285.0 cr for period ended Sep 2020, a rise of 46.0%
Operating Profits reported at Rs 42.0 cr for period ended Sep 2021 vis-vis 28.0 for period ended Sep 2020 .
Operating Margins expanded 27.2 bps for period ended Sep 2021 vis-vis Sep 2020 .
The EPS for Sep 2021 was Rs 3.74 compared to Rs 0.96 for previous quarter ended Jun 2021 and Rs 0.96 for Sep 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 1446.0 cr for period ended TTM vis-vis sales of Rs 1241.0 cr for the period ended Mar 2021, a healthy growth of 14.2%. The 3 year sales cagr stood at -4.2%.
Net Profit reported at Rs 66.0 cr for period ended TTM vis-vis sales of Rs 42.0 cr for the period ended Mar 2021, rising 36.4%.
Company reported a poor Net Profit CAGR of -8.4% 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 185.0 cr for period ended Mar 2021 vis-vis Rs -32.0 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 worsened on its Return on Equity (RoE) metric. The RoE on Last Year basis was 7.0% compared to 12.0% over the last 3 Years. – The stock has given a return of 19% on a 1 Year basis vis-vis a return of -13% over the last 3 Years. – The compounded sales growth on a TTM bassis is 12% vis-vis a compounded sales growth of -7% over the last 3 Years. – The compounded profit growth on a TTM basis is 76% vis-vis a compounded profit growth of -15% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Sep 2021 fii holding stood at 0.31% vis-vis 0.32% for Jun 2021 – Public shareholding has remained largely constant. The Sep 2021 public holding stood at 27.72% vis-vis 27.68% for Jun 2021
Conclusion
– has been maintaining a healthy dividend payout of 18.83% – The company has delivered a poor sales growth of 5.74% over past five years.
– has a low return on equity of 12.39% for last 3 years.
– has high debtors of 162.70 days.
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 207.23 and is trading at 193.0. 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
