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Our Rating: OBSERVE & HOLD
Mehabe score: 4 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
Parin Furniture is the fastest growing professionally managed furniture company based at Rajkot with it’s presence at Rajkot, Ahmedabad, Surat, Mumbai, Kolkata, Junagadh, Mehsana, Kodinar, Bhubaneshwar and with many plans ahead. Site:PARIN Main Symbol:PARIN
Stock trades at 79.0, above its 50dma 60.09. It also trades above its 200dma 62.32. The stock remains bullish on techicals
The 52 week high is at 79.00 and the 52week low is at 44.00
Price Chart
P/E Chart
Sales and Margin
Strengths
–
Weakness
– Though the company is reporting repeated profits, it is not paying out dividend
– has a low return on equity of 10.74% for last 3 years.
Competition
– The industry trades at a mean P/E of 26.4x. Indian Energy Ex trades at the industry’s max P/E of 88.55x. PARIN trades at a P/E of 19.1x
– Industry’s mean G-Factor is 3.5 while the mean Piotski score is 9.0. PARIN has a G-Factor of 3 and Piotski scoreof 5.
– Average 1 month return for industry is 6.9%. The max 1- month return was given by Parin Furniture: a return of 60.9 %
Quarterly Results
Sales for period ended Sep 2021 is Rs 22.77 cr compared to Rs 26.17 cr for period ended Sep 2019, a fall of 13.0%
Operating Profits reported at Rs 1.31 cr for period ended Sep 2021 vis-vis 2.98 for period ended Sep 2019 .
Operating Margins contracted -563.4 bps for period ended Sep 2021 vis-vis Sep 2019 .
The EPS for Sep 2021 was Rs 0.23 compared to Rs 1.83 for previous quarter ended Mar 2021 and Rs 0.94 for Sep 2019
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 64.87 cr for period ended TTM vis-vis sales of Rs 83.91 cr for the period ended Mar 2021, a fall of 29.4%. The 3 year sales cagr stood at -3.1%.
Operating margins shrank to 11.87% for period ended TTM vis-vis 14.22% for period ended Mar 2021, contraction of 235.0 bps.
Net Profit reported at Rs 2.3 cr for period ended TTM vis-vis sales of Rs 4.63 cr for the period ended Mar 2021, falling 101.3%.
Company reported a poor Net Profit CAGR of -17.7% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 2.14 cr for period ended Mar 2021 vis-vis Rs -3.76 cr for period ended Mar 2020
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 10.0% compared to 11.0% over the last 3 Years. – The stock has given a return of 14% on a 1 Year basis vis-vis a return of 5% over the last 3 Years. – The compounded sales growth on a TTM bassis is 25% vis-vis a compounded sales growth of 9% over the last 3 Years. – The compounded profit growth on a TTM basis is 21% vis-vis a compounded profit growth of 5% over the last 3 Years.
Ratios
Conclusion
– – Though the company is reporting repeated profits, it is not paying out dividend
– has a low return on equity of 10.74% for last 3 years.
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 60.09 and is trading at 79.0 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
