Mehabe score: 2 G Factor: 5 Piotski Score: 4 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 5 and Piotski score of 4.
Description
Rajshree Sugars & Chemicals is engaged in Business of White Crystal Sugar, Co-generation of Power and Industrial Alcohol.Site:RAJSREESUGMain Symbol:RAJSREESUG
Stock trades at 27.9, above its 50dma 26.87. It also trades above its 200dma 22.53. The stock remains bullish on techicals
The 52 week high is at 38.30 and the 52week low is at 11.25
Price Chart
P/E Chart
Sales and Margin
Strengths
– Debtor days have improved from 44.81 to 29.26 days.
Weakness
– Stock is trading at 2.58 times its book value
– has low interest coverage ratio.
-The company has delivered a poor sales growth of -8.59% over past five years.
– has a low return on equity of -51.31% for last 3 years.
– might be capitalizing the interest cost
-Promoters have pledged 100.00% of their holding.
-Earnings include an other income of Rs.11.55 Cr.
Competition
– The industry trades at a mean P/E of 12.8x. Bannari Amm.Sug. trades at the industry’s max P/E of 26.63x. RAJSREESUG trades at a P/E of x
– Industry’s mean G-Factor is 3.6 while the mean Piotski score is 9.0. RAJSREESUG has a G-Factor of 5 and Piotski scoreof 4.
– Average 1 month return for industry is -4.0%. The max 1- month return was given by Balrampur Chini: a return of 7.22 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 105.0 cr compared to Rs 96.0 cr for period ended Jun 2020, a rise of 9.4%
Company reported negative operating profit of Rs -4.0 cr for period ended Jun 2021. For same period last year, operating profit was 6.0
The EPS for Jun 2021 was Rs -5.21 compared to Rs 14.1 for previous quarter ended Mar 2021 and Rs -5.28 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 373.0 cr for period ended TTM vis-vis sales of Rs 364.0 cr for the period ended Mar 2021, a growth of 2.4%. The 3 year sales cagr stood at -2.2%.
Operating margins shrank to 5.0% for period ended TTM vis-vis 8.0% for period ended Mar 2021, contraction of 300.0 bps.
Net Profit reported at Rs -17.0 cr for period ended TTM vis-vis sales of Rs -17.0 cr for the period ended Mar 2021,
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 stock has given a return of 94% on a 1 Year basis vis-vis a return of 8% over the last 3 Years. – The compounded sales growth on a TTM bassis is 16% vis-vis a compounded sales growth of -13% over the last 3 Years. – The compounded profit growth on a TTM basis is 65% vis-vis a compounded profit growth of 15% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Jun 2021 public holding stood at 52.14% vis-vis 52.14% for Mar 2021
Conclusion
– Debtor days have improved from 44.81 to 29.26 days. – Stock is trading at 2.58 times its book value
– has low interest coverage ratio.
-The company has delivered a poor sales growth of -8.59% over past five years.
– has a low return on equity of -51.31% for last 3 years.
– might be capitalizing the interest cost
-Promoters have pledged 100.00% of their holding.
-Earnings include an other income of Rs.11.55 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 26.87 and is trading at 27.9 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
