Mehabe score: 5 G Factor: 3 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 3 and Piotski score of 5.
Description
Jindal Cotex is engaged in the business of Textiles.Site:JINDCOTMain Symbol:JINDCOT
Stock trades at 3.3, above its 50dma 2.09. It also trades above its 200dma 2.35. The stock remains bullish on techicals
The 52 week high is at 3.68 and the 52week low is at 1.40
Price Chart
P/E Chart
Sales and Margin
Strengths
– Stock is trading at 0.20 times its book value
– is expected to give good quarter
Weakness
– has low interest coverage ratio.
-The company has delivered a poor sales growth of -22.32% over past five years.
-Promoter holding is low: 21.05%
– has a low return on equity of -7.72% for last 3 years.
-Contingent liabilities of Rs.327.61 Cr.
– might be capitalizing the interest cost
-Promoters have pledged 93.91% of their holding.
-Earnings include an other income of Rs.1.51 Cr.
– has high debtors of 2152.87 days.
Competition
– The industry trades at a mean P/E of 9.5x. Sangam India trades at the industry’s max P/E of 12.33x. JINDCOT trades at a P/E of x
– Industry’s mean G-Factor is 4.8 while the mean Piotski score is 8.0. JINDCOT has a G-Factor of 3 and Piotski scoreof 5.
– Average 1 month return for industry is 8.8%. The max 1- month return was given by Sportking India: a return of 71.15 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 6.82 cr compared to Rs 1.73 cr for period ended Jun 2020, a rise of 294.2%
Company reported operating profit of Rs 0.16 cr for period ended Jun 2021, operating profit margin at 2.3 %.
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 -0.25 compared to Rs -0.3 for previous quarter ended Mar 2021 and Rs -0.38 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 33.6 cr for period ended TTM vis-vis sales of Rs 28.51 cr for the period ended Mar 2021, a healthy growth of 15.1%. The 3 year sales cagr stood at -26.3%.
Operating margins expanded to 2.71% for period ended TTM vis-vis 1.16% for period ended Mar 2021, expansion of 155.0 bps.
Net Profit reported at Rs -4.44 cr for period ended TTM vis-vis sales of Rs -5.02 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 stock has given a return of 128% on a 1 Year basis vis-vis a return of -21% over the last 3 Years. – The compounded sales growth on a TTM bassis is -13% vis-vis a compounded sales growth of -50% over the last 3 Years. – The compounded profit growth on a TTM basis is 19% vis-vis a compounded profit growth of 21% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Jun 2021 fii holding stood at 0.59% vis-vis 0.59% for Mar 2021 – Public shareholding has remained largely constant. The Jun 2021 public holding stood at 63.42% vis-vis 63.42% for Mar 2021
Conclusion
– Stock is trading at 0.20 times its book value
– is expected to give good quarter – has low interest coverage ratio.
-The company has delivered a poor sales growth of -22.32% over past five years.
-Promoter holding is low: 21.05%
– has a low return on equity of -7.72% for last 3 years.
-Contingent liabilities of Rs.327.61 Cr.
– might be capitalizing the interest cost
-Promoters have pledged 93.91% of their holding.
-Earnings include an other income of Rs.1.51 Cr.
– has high debtors of 2152.87 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 2.09 and is trading at 3.3 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
