Mehabe score: 4 G Factor: 3 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 3 and Piotski score of 5.
Description
Libas Designs is engaged mainly in the process of fabrication of fabric into garments and other products through customisation.Site:LIBASMain Symbol:www.nseindia.com
Stock trades at 50.1, below its 50dma 52.05. However it is trading above its 200dma 44.04. The stock remains weak in the short term due to near term bearish momentum. However overall bullish structure remains intact. Price action will further build up as it moves above its dma50, currently situated at 52.05.
The 52 week high is at 63.67 and the 52week low is at 18.91
Price Chart
P/E Chart
Sales and Margin
Strengths
– is expected to give good quarter
Weakness
– Stock is trading at 2.93 times its book value
-Promoter holding has decreased over last quarter: -4.69%
-The company has delivered a poor sales growth of 10.28% over past five years.
– has a low return on equity of 7.76% for last 3 years.
– has high debtors of 206.07 days.
Competition
– The industry trades at a mean P/E of 27.6x. Garware Tech. trades at the industry’s max P/E of 45.89x. LIBAS trades at a P/E of 24.6x
– Industry’s mean G-Factor is 3.0 while the mean Piotski score is 9.0. LIBAS has a G-Factor of 3 and Piotski scoreof 5.
– Average 1 month return for industry is 11.0%. The max 1- month return was given by Trident: a return of 56.3 %
Quarterly Results
Sales for period ended Sep 2021 is Rs 10.64 cr compared to Rs 9.45 cr for period ended Sep 2020, a rise of 12.6%
Operating Profits reported at Rs 2.0 cr for period ended Sep 2021 vis-vis 2.16 for period ended Sep 2020 .
Operating Margins contracted -406.0 bps for period ended Sep 2021 vis-vis Sep 2020 .
The EPS for Sep 2021 was Rs 0.51 compared to Rs 0.45 for previous quarter ended Jun 2021 and Rs 0.78 for Sep 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 40.48 cr for period ended TTM vis-vis sales of Rs 35.0 cr for the period ended Mar 2021, a healthy growth of 13.5%. The 3 year sales cagr stood at -7.9%.
Operating margins expanded to 18.6% for period ended TTM vis-vis 16.8% for period ended Mar 2021, expansion of 180.0 bps.
Net Profit reported at Rs 3.6 cr for period ended TTM vis-vis sales of Rs -1.63 cr for the period ended Mar 2021, rising 145.3%.
Company recorded a Net Profit CAGR of 0.6% 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 2.61 cr for period ended Mar 2021 vis-vis Rs -0.53 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 9.0% compared to 8.0% over the last 3 Years. – The stock has given a return of 128% 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 71% vis-vis a compounded sales growth of -7% over the last 3 Years. – The compounded profit growth on a TTM basis is 2869% vis-vis a compounded profit growth of -3% over the last 3 Years.
Ratios
Conclusion
– is expected to give good quarter – Stock is trading at 2.93 times its book value
-Promoter holding has decreased over last quarter: -4.69%
-The company has delivered a poor sales growth of 10.28% over past five years.
– has a low return on equity of 7.76% for last 3 years.
– has high debtors of 206.07 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 52.05 and is trading at 50.1. 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
