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
Oricon Enterprises is engaged in the business of manufacturing petrochemical products, trading, liquid colorants and real estate, preform metal and plastic closures.Site:ORICONENT
Market Cap:
Rs 418 cr
Price:
26.6
Trading pe:
x
Book-value:
57.7/share
Div yield:
1.88 %
Earning yield:
-0.67%
Face-value:
2.00/share
52week high:
29.85
52week low:
13.45
Technical Analysis
Stock trades at 26.6, above its 50dma 23.53. It also trades above its 200dma 21.37. The stock remains bullish on techicals
The 52 week high is at 29.85 and the 52week low is at 13.45
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
-Stock is trading at 0.46 times its book value
– has been maintaining a healthy dividend payout of 40.42%
Weakness
– has low interest coverage ratio.
-The company has delivered a poor sales growth of -2.53% over past five years.
– has a low return on equity of 2.89% for last 3 years.
-Earnings include an other income of Rs.40.33 Cr.
Competition
– The industry trades at a mean P/E of 10.1x. DCW trades at the industry’s max P/E of 259.31x. ORICONENT trades at a P/E of x
– Industry’s mean G-Factor is 5.6 while the mean Piotski score is 9.0. ORICONENT has a G-Factor of 3 and Piotski scoreof 6.
– Average 1 month return for industry is 13.2%. The max 1- month return was given by Savita Oil Tech: a return of 25.9 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 190.67 cr compared to Rs 196.09 cr for period ended Mar 2020, a fall of 2.8%
Operating Profits reported at Rs 20.68 cr for period ended Mar 2021 vis-vis 21.62 for period ended Mar 2020 .
Operating Margins contracted -18.0 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 0.03 compared to Rs 0.37 for previous quarter ended Dec 2020 and Rs -0.2 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 654.0 cr for period ended TTM vis-vis sales of Rs 922.0 cr for the period ended Mar 2020, a fall of 41.0%. The 3 year sales cagr stood at -13.6%.
Operating margins shrank to 8.0% for period ended TTM vis-vis 10.0% for period ended Mar 2020, contraction of 200.0 bps.
Net Profit reported at Rs -2.0 cr for period ended TTM vis-vis sales of Rs 23.0 cr for the period ended Mar 2020, falling 0%.
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 272.0 cr for period ended Mar 2020 vis-vis Rs 159.0 cr for period ended Mar 2019
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has had stable/constant Return on Equity (RoE) metric. The RoE on Last Year basis was 3.0% compared to 3.0% over the last 3 Years. – The stock has given a return of 85% on a 1 Year basis vis-vis a return of -15% over the last 3 Years. – The compounded sales growth on a TTM bassis is -28% vis-vis a compounded sales growth of -8% over the last 3 Years. – The compounded profit growth on a TTM basis is -116% vis-vis a compounded profit growth of -11% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2021 fii holding stood at 5.71% vis-vis 5.71% for Dec 2020 – Public shareholding has remained largely constant. The Mar 2021 public holding stood at 26.38% vis-vis 26.37% for Dec 2020
Conclusion
– has reduced debt.
-Stock is trading at 0.46 times its book value
– has been maintaining a healthy dividend payout of 40.42% – has low interest coverage ratio.
-The company has delivered a poor sales growth of -2.53% over past five years.
– has a low return on equity of 2.89% for last 3 years.
-Earnings include an other income of Rs.40.33 Cr.
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 23.53 and is trading at 26.6 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
