Mehabe score: 3 G Factor: 3 Piotski Score: 3 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 3.
Description
Indian Terrain is in the business of branded apparels in India. ITFL operates within India and offers a variety of ranges from Shirts, Trousers, Shorts, and T-shirts, etc. #
The company started its operations in 2000 with celebrity fashions limited and the company got demerged from Celebrity Fashions Limited into a separate listed entity in April 2010. The company started with 20 Exclusive brand Outlets.
Main Points
A recognized brand in the Men’s Casual Wear
It has established its niche in the Men’s segment with a diverse range of apparel offerings with shirts, shorts, tees, trousers, etc. These are retailed through various channels across India which are Multi-branded Outlets (MBO), Exclusive brand outlets (EBO), Large formats stores (LFO), and E-commerce platforms.
It is positioned as a premium, smart casual brand targeting affluent men in the age group of 25-44 years who are adopting the ready to wear apparels in comparison to ready to stitch
It is also increasing its investments towards building a stronger brand with the adoption of social media marketing, digital marketing, and engagement with the end consumer to enhance and better serve its end users {# https://www.bseindia.com/bseplus/AnnualReport/533329/65206533329.pdf#page=30 #{Site:INDTERRAINMain Symbol:INDTERRAIN
Stock trades at 41.8, above its 50dma 39.94. It also trades above its 200dma 37.24. The stock remains bullish on techicals
The 52 week high is at 52.50 and the 52week low is at 26.55
Price Chart
P/E Chart
Sales and Margin
Strengths
– Stock is trading at 0.87 times its book value
Weakness
– has low interest coverage ratio.
-The company has delivered a poor sales growth of -8.09% over past five years.
-Promoter holding is low: 28.01%
– has a low return on equity of -2.82% for last 3 years.
-Promoters have pledged 66.44% of their holding.
-Earnings include an other income of Rs.10.37 Cr.
– has high debtors of 387.82 days.
-‘s cost of borrowing seems high
Competition
– The industry trades at a mean P/E of 23.7x. Garware Tech. trades at the industry’s max P/E of 39.29x. INDTERRAIN trades at a P/E of x
– Industry’s mean G-Factor is 3.4 while the mean Piotski score is 9.0. INDTERRAIN has a G-Factor of 3 and Piotski scoreof 3.
– Average 1 month return for industry is 2.3%. The max 1- month return was given by PDS Multi.: a return of 36.49 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 28.0 cr compared to Rs 13.0 cr for period ended Jun 2020, a rise of 115.4%
Company reported negative operating profit of Rs -5.0 cr for period ended Jun 2021. For same period last year, operating profit was -24.0
The EPS for Jun 2021 was Rs -2.94 compared to Rs 6.52 for previous quarter ended Mar 2021 and Rs -8.5 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 227.0 cr for period ended TTM vis-vis sales of Rs 213.0 cr for the period ended Mar 2021, a growth of 6.2%. The 3 year sales cagr stood at -18.7%.
Net Profit reported at Rs -11.0 cr for period ended TTM vis-vis sales of Rs -31.0 cr for the period ended Mar 2021, rising 0%.
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
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 -15.0% compared to -3.0% over the last 3 Years. – The stock has given a return of 27% on a 1 Year basis vis-vis a return of -32% over the last 3 Years. – The compounded sales growth on a TTM bassis is -24% vis-vis a compounded sales growth of -19% over the last 3 Years. – The compounded profit growth on a TTM basis is 77% vis-vis a compounded profit growth of % over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Jun 2021 fii holding stood at 7.06% vis-vis 6.45% for Mar 2021 – Public shareholding has risen for the period ended Jun 2021. The Jun 2021 public holding stood at 58.29% vis-vis 55.59% for Mar 2021
Conclusion
– Stock is trading at 0.87 times its book value – has low interest coverage ratio.
-The company has delivered a poor sales growth of -8.09% over past five years.
-Promoter holding is low: 28.01%
– has a low return on equity of -2.82% for last 3 years.
-Promoters have pledged 66.44% of their holding.
-Earnings include an other income of Rs.10.37 Cr.
– has high debtors of 387.82 days.
-‘s cost of borrowing seems high
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 39.94 and is trading at 41.8 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
