Mehabe score: 2 G Factor: 4 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 4 and Piotski score of 3.
Description
Orient Paper & Industries Ltd is engaged in manufacturing and selling of paper and other products including Caustic soda Lye, C.S Flakes, Liquid Chlorine and Hydrochloric Acid.##
Main Points
Revenue Breakup
Presently, Paper & board accounts for 83% of revenues, followed by caustic soda products (16%), and liquid chlorine & hydrochloric acid (>1%).#Site:ORIENTPPRMain Symbol:ORIENTPPR
Stock trades at 30.9, above its 50dma 28.94. It also trades above its 200dma 25.12. The stock remains bullish on techicals
The 52 week high is at 33.40 and the 52week low is at 15.60
Price Chart
P/E Chart
Sales and Margin
Strengths
– is almost debt free.
-Stock is trading at 0.45 times its book value
– has been maintaining a healthy dividend payout of 21.60%
Weakness
– has low interest coverage ratio.
-The company has delivered a poor sales growth of -24.59% over past five years.
– has a low return on equity of 1.69% for last 3 years.
-Contingent liabilities of Rs.413.37 Cr.
Competition
– The industry trades at a mean P/E of 23.3x. Century Textiles trades at the industry’s max P/E of 294.77x. ORIENTPPR trades at a P/E of x
– Industry’s mean G-Factor is 3.9 while the mean Piotski score is 7.0. ORIENTPPR has a G-Factor of 4 and Piotski scoreof 3.
– Average 1 month return for industry is 11.2%. The max 1- month return was given by Century Textiles: a return of 34.14 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 154.57 cr compared to Rs 134.48 cr for period ended Mar 2020, a rise of 14.9%
Operating Profits reported at Rs 5.32 cr for period ended Mar 2021 vis-vis 0.52 for period ended Mar 2020 .
Operating Margins expanded 305.5 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs -0.18 compared to Rs -0.5 for previous quarter ended Dec 2020 and Rs -0.14 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 443.0 cr for period ended Mar 2021 vis-vis sales of Rs 607.0 cr for the period ended Mar 2020, a fall of 37.0%. The 3 year sales cagr stood at -12.5%.
Operating margins shrank to -8.0% for period ended Mar 2021 vis-vis 8.0% for period ended Mar 2020, contraction of 1600.0 bps.
Net Profit reported at Rs -47.0 cr for period ended Mar 2021 vis-vis sales of Rs 20.0 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 -4.0% compared to 2.0% over the last 3 Years. – The stock has given a return of 72% on a 1 Year basis vis-vis a return of -6% over the last 3 Years. – The compounded sales growth on a TTM bassis is -27% vis-vis a compounded sales growth of -12% over the last 3 Years. – The compounded profit growth on a TTM basis is -333% vis-vis a compounded profit growth of % over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Jun 2021 fii holding stood at 0.07% vis-vis 0.04% for Mar 2021 – Public shareholding has remained largely constant. The Jun 2021 public holding stood at 49.64% vis-vis 49.16% for Mar 2021
Conclusion
– is almost debt free.
-Stock is trading at 0.45 times its book value
– has been maintaining a healthy dividend payout of 21.60% – has low interest coverage ratio.
-The company has delivered a poor sales growth of -24.59% over past five years.
– has a low return on equity of 1.69% for last 3 years.
-Contingent liabilities of Rs.413.37 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 28.94 and is trading at 30.9 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
