Mehabe score: 4 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
Lokesh Machines is engaged in the business of manufacture of Special Purpose Machines (SPM), General Purpose Machines/CNC Lathes (GPM), Connecting Rods and machining of Cylinder Blocks and Heads.(Source : 201903 Annual Report Page No:79)Site:LOKESHMACH
Market Cap:
Rs 95.0 cr
Price:
53.1
Trading pe:
x
Book-value:
77.7/share
Div yield:
0.00 %
Earning yield:
2.77%
Face-value:
10.0/share
52week high:
54.05
52week low:
17.95
Technical Analysis
Stock trades at 53.1, above its 50dma 44.59. It also trades above its 200dma 36.29. The stock remains bullish on techicals
The 52 week high is at 54.05 and the 52week low is at 17.95
Price Chart
P/E Chart
Sales and Margin
Strengths
– Stock is trading at 0.68 times its book value
Weakness
– has low interest coverage ratio.
-The company has delivered a poor sales growth of 1.22% over past five years.
– has a low return on equity of 1.59% for last 3 years.
-Promoters have pledged 48.11% of their holding.
-Debtor days have increased from 69.74 to 83.78 days.
Competition
– The industry trades at a mean P/E of 21.3x. HLE Glascoat trades at the industry’s max P/E of 94.25x. LOKESHMACH trades at a P/E of x
– Industry’s mean G-Factor is 3.5 while the mean Piotski score is 8.0. LOKESHMACH has a G-Factor of 4 and Piotski scoreof 4.
– Average 1 month return for industry is 8.8%. The max 1- month return was given by HLE Glascoat: a return of 22.65 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 56.54 cr compared to Rs 27.51 cr for period ended Mar 2020, a rise of 105.5%
Company reported operating profit of Rs 7.75 cr for period ended Mar 2021, operating profit margin at 13.7 %.
Operating profit was negative for the same period last year thus company has improved its margins this year
The EPS for Mar 2021 was Rs 1.29 compared to Rs 0.86 for previous quarter ended Dec 2020 and Rs -3.22 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 150.0 cr for period ended Mar 2021 vis-vis sales of Rs 126.0 cr for the period ended Mar 2020, a healthy growth of 16.0%. The 3 year sales cagr stood at -5.0%.
Operating margins expanded to 17.0% for period ended Mar 2021 vis-vis 10.0% for period ended Mar 2020, expansion of 700.0 bps.
Net Profit reported at Rs 4.0 cr for period ended Mar 2021 vis-vis sales of Rs -5.0 cr for the period ended Mar 2020, rising 225.0%.
Company reported a poor Net Profit CAGR of -7.2% 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 -3.0% compared to 2.0% over the last 3 Years. – The stock has given a return of 188% on a 1 Year basis vis-vis a return of -7% over the last 3 Years. – The compounded sales growth on a TTM bassis is -24% vis-vis a compounded sales growth of -2% over the last 3 Years. – The compounded profit growth on a TTM basis is -208% vis-vis a compounded profit growth of % over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Mar 2021 public holding stood at 47.58% vis-vis 47.58% for Dec 2020
Conclusion
– Stock is trading at 0.68 times its book value – has low interest coverage ratio.
-The company has delivered a poor sales growth of 1.22% over past five years.
– has a low return on equity of 1.59% for last 3 years.
-Promoters have pledged 48.11% of their holding.
-Debtor days have increased from 69.74 to 83.78 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 44.59 and is trading at 53.1 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
