Mehabe score: 4 G Factor: 3 Piotski Score: 6 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 6.
Description
Magadh Sugar & Energy is primarily engaged in the manufacture and sale of sugar and its by-products (molasses, bagasse and press-mud), spirits including ethanol and power.Site:MAGADSUGARMain Symbol:MAGADHSUGAR
Stock trades at 333.0, above its 50dma 287.03. It also trades above its 200dma 187.09. The stock remains bullish on techicals
The 52 week high is at 386.95 and the 52week low is at 88.95
Price Chart
P/E Chart
Sales and Margin
Strengths
– Stock is trading at 0.84 times its book value
Weakness
– has low interest coverage ratio.
– has a low return on equity of 8.88% for last 3 years.
-Dividend payout has been low at 11.16% of profits over last 3 years
Competition
– The industry trades at a mean P/E of 14.8x. Magadh Sugar trades at the industry’s max P/E of 17.31x. MAGADSUGAR trades at a P/E of 17.3x
– Industry’s mean G-Factor is 3.8 while the mean Piotski score is 8.0. MAGADSUGAR has a G-Factor of 3 and Piotski scoreof 6.
– Average 1 month return for industry is -8.2%. The max 1- month return was given by EID Parry: a return of 3.08 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 326.0 cr compared to Rs 291.0 cr for period ended Mar 2020, a rise of 12.0%
Operating Profits reported at Rs 52.0 cr for period ended Mar 2021 vis-vis 63.0 for period ended Mar 2020 .
Operating Margins contracted -569.9 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 15.48 compared to Rs 10.38 for previous quarter ended Dec 2020 and Rs 38.57 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 952.0 cr for period ended Mar 2021 vis-vis sales of Rs 916.0 cr for the period ended Mar 2020, a growth of 3.8%. The 3 year sales cagr stood at 9.9%.
Operating margins shrank to 12.0% for period ended Mar 2021 vis-vis 17.0% for period ended Mar 2020, contraction of 500.0 bps.
Net Profit reported at Rs 27.0 cr for period ended Mar 2021 vis-vis sales of Rs 83.0 cr for the period ended Mar 2020, falling 207.4%.
Company recorded a Net Profit CAGR of 2.6% 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 125.0 cr for period ended Mar 2021 vis-vis Rs -17.0 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 5.0% compared to 9.0% over the last 3 Years. – The stock has given a return of 170% on a 1 Year basis vis-vis a return of 76% over the last 3 Years. – The compounded sales growth on a TTM bassis is 4% vis-vis a compounded sales growth of 10% over the last 3 Years. – The compounded profit growth on a TTM basis is -62% vis-vis a compounded profit growth of 10% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Jun 2021 fii holding stood at 0.02% vis-vis 0.0% for Mar 2021 – Public shareholding has remained largely constant. The Jun 2021 public holding stood at 39.03% vis-vis 39.04% for Mar 2021
Conclusion
– Stock is trading at 0.84 times its book value – has low interest coverage ratio.
– has a low return on equity of 8.88% for last 3 years.
-Dividend payout has been low at 11.16% of profits over last 3 years
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 287.03 and is trading at 333.0 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
