Mehabe score: 2 G Factor: 1 Piotski Score: 3 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 1 and Piotski score of 3.
Description
NITCO tiles were established in 1966 by the late Mr. Pran Nath Talwar, is engaged in providing floor and wall solutions and manufactures a range of tiles, marbles, and mosaic. It has also entered into real estate development # #
Main Points
Strategic Collaboration
It is one of the largest manufacturers of concrete and terrazzo tiles in Asia.
It is also a leading manufacturer of Glass Fibre Reinforced Molded architectural products. #Site:NITCO
Market Cap:
Rs 218 cr
Price:
30.4
Trading pe:
x
Book-value:
-0.03/share
Div yield:
0.00 %
Earning yield:
-9.97%
Face-value:
10.0/share
52week high:
31.70
52week low:
15.60
Technical Analysis
Stock trades at 30.4, above its 50dma 23.11. It also trades above its 200dma 21.87. The stock remains bullish on techicals
The 52 week high is at 31.70 and the 52week low is at 15.60
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
Weakness
– has low interest coverage ratio.
-The company has delivered a poor sales growth of -12.23% over past five years.
– has a low return on equity of 11.41% for last 3 years.
-Contingent liabilities of Rs.324.30 Cr.
-Promoters have pledged 91.38% of their holding.
Competition
– The industry trades at a mean P/E of 68.1x. Somany Ceramics trades at the industry’s max P/E of 114.54x. NITCO trades at a P/E of x
– Industry’s mean G-Factor is 3.1 while the mean Piotski score is 7.0. NITCO has a G-Factor of 1 and Piotski scoreof 3.
– Average 1 month return for industry is 23.9%. The max 1- month return was given by Orient Bell: a return of 42.57 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 119.0 cr compared to Rs 80.0 cr for period ended Mar 2020, a rise of 48.8%
Company reported negative operating profit of Rs -23.0 cr for period ended Mar 2021. For same period last year, operating profit was -54.0
The EPS for Mar 2021 was Rs -6.73 compared to Rs -3.3 for previous quarter ended Dec 2020 and Rs 2.91 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 327.0 cr for period ended Mar 2021 vis-vis sales of Rs 461.0 cr for the period ended Mar 2020, a fall of 41.0%. The 3 year sales cagr stood at -18.8%.
Operating margins shrank to -17.0% for period ended Mar 2021 vis-vis -11.0% for period ended Mar 2020, contraction of 600.0 bps.
Net Profit reported at Rs -137.0 cr for period ended Mar 2021 vis-vis sales of Rs -47.0 cr for the period ended Mar 2020, falling 0%.
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 -30.0% compared to 11.0% over the last 3 Years. – The stock has given a return of 76% on a 1 Year basis vis-vis a return of -27% over the last 3 Years. – The compounded sales growth on a TTM bassis is -48% vis-vis a compounded sales growth of -14% over the last 3 Years. – The compounded profit growth on a TTM basis is -41% vis-vis a compounded profit growth of % over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2021 fii holding stood at 0.0% vis-vis 0.0% for Dec 2020 – Public shareholding has remained largely constant. The Mar 2021 public holding stood at 23.1% vis-vis 23.1% for Dec 2020
Conclusion
– has reduced debt. – has low interest coverage ratio.
-The company has delivered a poor sales growth of -12.23% over past five years.
– has a low return on equity of 11.41% for last 3 years.
-Contingent liabilities of Rs.324.30 Cr.
-Promoters have pledged 91.38% of their holding.
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 23.11 and is trading at 30.4 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
