Mehabe score: 4 G Factor: 1 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 1 and Piotski score of 6.
Description
NK Industries is engaged in manufacturing of castor oil and other allied products including its derivatives viz. 12 HAS, ricilonic acid, etc.Site:NKINDMain Symbol:NKIND
Stock trades at 29.2, above its 50dma 26.65. It also trades above its 200dma 23.62. The stock remains bullish on techicals
The 52 week high is at 31.90 and the 52week low is at 16.05
Price Chart
P/E Chart
Sales and Margin
Strengths
–
Weakness
– has low interest coverage ratio.
-The company has delivered a poor sales growth of -26.32% over past five years.
– has high debtors of 331.66 days.
Competition
– The industry trades at a mean P/E of 27.6x. Agro Tech Foods. trades at the industry’s max P/E of 92.64x. NKIND trades at a P/E of x
– Industry’s mean G-Factor is 4.2 while the mean Piotski score is 7.0. NKIND has a G-Factor of 1 and Piotski scoreof 6.
– Average 1 month return for industry is 10.9%. The max 1- month return was given by Vijay Solvex: a return of 96.12 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 5.41 cr compared to Rs 5.09 cr for period ended Jun 2020, a rise of 6.3%
Operating Profits reported at Rs 0.21 cr for period ended Jun 2021 vis-vis 0.45 for period ended Jun 2020 .
Operating Margins contracted -495.9 bps for period ended Jun 2021 vis-vis Jun 2020 .
The EPS for Jun 2021 was Rs -1.11 compared to Rs 1.36 for previous quarter ended Mar 2021 and Rs -1.56 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 22.98 cr for period ended TTM vis-vis sales of Rs 22.66 cr for the period ended Mar 2021, a growth of 1.4%. The 3 year sales cagr stood at -64.0%.
Operating margins shrank to 8.66% for period ended TTM vis-vis 9.84% for period ended Mar 2021, contraction of 118.0 bps.
Net Profit reported at Rs -2.0 cr for period ended TTM vis-vis sales of Rs -2.26 cr for the period ended Mar 2021, rising 0%.
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 3.62 cr for period ended Mar 2021 vis-vis Rs -9.08 cr for period ended Mar 2020
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The stock has given a return of 34% on a 1 Year basis vis-vis a return of -11% over the last 3 Years. – The compounded sales growth on a TTM bassis is 9% vis-vis a compounded sales growth of -45% over the last 3 Years. – The compounded profit growth on a TTM basis is 63% vis-vis a compounded profit growth of 9% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Jun 2021 public holding stood at 27.93% vis-vis 27.96% for Mar 2021
Conclusion
– – has low interest coverage ratio.
-The company has delivered a poor sales growth of -26.32% over past five years.
– has high debtors of 331.66 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 26.65 and is trading at 29.2 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
