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
Mahindra CIE Automotive is engaged in the Business of Production and sale of automotive componts to orginal equipment manufacturing and other customers in india and overseas.Site:MAHINDCIEMain Symbol:MAHINDCIE
Stock trades at 251.0, above its 50dma 232.5. It also trades above its 200dma 203.42. The stock remains bullish on techicals
The 52 week high is at 280.70 and the 52week low is at 126.20
Price Chart
P/E Chart
Sales and Margin
Strengths
– is expected to give good quarter
Weakness
– Though the company is reporting repeated profits, it is not paying out dividend
-The company has delivered a poor sales growth of 8.62% over past five years.
– has a low return on equity of 7.17% for last 3 years.
– might be capitalizing the interest cost
Competition
– The industry trades at a mean P/E of 24.7x. Sona BLW Precis. trades at the industry’s max P/E of 220.43x. MAHINDCIE trades at a P/E of 22.4x
– Industry’s mean G-Factor is 2.6 while the mean Piotski score is 7.0. MAHINDCIE has a G-Factor of 3 and Piotski scoreof 5.
– Average 1 month return for industry is 9.9%. The max 1- month return was given by Sona BLW Precis.: a return of 29.65 %
Quarterly Results
Sales for period ended Sep 2021 is Rs 2091.0 cr compared to Rs 1694.0 cr for period ended Sep 2020, a rise of 23.4%
Operating Profits reported at Rs 268.0 cr for period ended Sep 2021 vis-vis 151.0 for period ended Sep 2020 .
Operating Margins expanded 390.3 bps for period ended Sep 2021 vis-vis Sep 2020 .
The EPS for Sep 2021 was Rs 4.39 compared to Rs 3.59 for previous quarter ended Jun 2021 and Rs 1.6 for Sep 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 8280.0 cr for period ended TTM vis-vis sales of Rs 6050.0 cr for the period ended Dec 2020, a healthy growth of 26.9%. The 3 year sales cagr stood at 1.0%.
Operating margins expanded to 13.0% for period ended TTM vis-vis 8.0% for period ended Dec 2020, expansion of 500.0 bps.
Net Profit reported at Rs 424.0 cr for period ended TTM vis-vis sales of Rs 106.0 cr for the period ended Dec 2020, rising 75.0%.
Company reported a poor Net Profit CAGR of -5.2% over the last 3 years
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 2.0% compared to 7.0% over the last 3 Years. – The stock has given a return of 94% on a 1 Year basis vis-vis a return of -1% over the last 3 Years. – The compounded sales growth on a TTM bassis is 42% vis-vis a compounded sales growth of -2% over the last 3 Years. – The compounded profit growth on a TTM basis is 15672% vis-vis a compounded profit growth of -36% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has fallen for the period ended Sep 2021. The Sep 2021 fii holding stood at 10.45% vis-vis 12.73% for Jun 2021 – Public shareholding has remained largely constant. The Sep 2021 public holding stood at 9.52% vis-vis 9.46% for Jun 2021
Conclusion
– is expected to give good quarter – Though the company is reporting repeated profits, it is not paying out dividend
-The company has delivered a poor sales growth of 8.62% over past five years.
– has a low return on equity of 7.17% for last 3 years.
– might be capitalizing the interest cost
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 232.5 and is trading at 251.0 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
