Investment Memo: ROHITFERRO

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Our Rating: HOLD

Mehabe score: 3
G Factor: 5
Piotski Score: 5
The stock has a rating 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 5.

Description

Rohit Ferro Tech is engaged in a well-differentiated player in the Ferro Alloy manufacturing sector.Site: ROHITFERROMain Symbol: ROHITFERRO

Price Chart

Technical Analysis

• Stock trades at 3.3, above its 50dma 2.28. It also trades above its 200dma 1.63. The stock remains bullish on techicals
• The 52 week high is at 4.12 and the 52week low is at 0.70

Price Chart

P/E Chart

Sales and Margin

Strengths

– has reduced debt.

Weakness

– has low interest coverage ratio.
-The company has delivered a poor sales growth of -15.67% over past five years.
-Promoters have pledged 100.00% of their holding.

Competition

– The industry trades at a mean P/E of 18.8x. KIOCL trades at the industry’s max P/E of 52.72x. ROHITFERRO trades at a P/E of x
– Industry’s mean G-Factor is 5.6 while the mean Piotski score is 9.0. ROHITFERRO has a G-Factor of 5 and Piotski scoreof 5.
– Average 1 month return for industry is -0.7%. The max 1- month return was given by Rohit Ferro Tech: a return of 10.0 %

Quarterly Results

• Sales for period ended Mar 2021 is Rs 235.61 cr compared to Rs 148.62 cr for period ended Mar 2020, a rise of 58.5%
• Company reported negative operating profit of Rs -1.45 cr for period ended Mar 2021. For same period last year, operating profit was -54.15
• The EPS for Mar 2021 was Rs -0.61 compared to Rs -1.94 for previous quarter ended Dec 2020 and Rs -54.18 for Mar 2020

Profit & Loss Statement

Profit&Loss Comments

• Company reported sales of Rs 634.0 cr for period ended Mar 2021 vis-vis sales of Rs 738.0 cr for the period ended Mar 2020, a fall of 16.4%. The 3 year sales cagr stood at -3.8%.
• Operating margins expanded to -7.0% for period ended Mar 2021 vis-vis -12.0% for period ended Mar 2020, expansion of 500.0 bps.
• Net Profit reported at Rs -69.0 cr for period ended Mar 2021 vis-vis sales of Rs -679.0 cr for the period ended Mar 2020, rising 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 stock has given a return of 187% on a 1 Year basis vis-vis a return of 21% over the last 3 Years.
– The compounded sales growth on a TTM bassis is -14% vis-vis a compounded sales growth of -4% over the last 3 Years.
– The compounded profit growth on a TTM basis is 53% vis-vis a compounded profit growth of 22% over the last 3 Years.

Ratios

Shareholding Pattern

– Public shareholding has remained largely constant. The Jun 2021 public holding stood at 28.0% vis-vis 28.0% for Mar 2021

Conclusion

– has reduced debt. – has low interest coverage ratio.
-The company has delivered a poor sales growth of -15.67% over past five years.
-Promoters have pledged 100.00% of their holding.

• The business fundamentals of the stock remain stable. Stronger near term results will build interest in the stock. We suggest to wait for a upturn in business performance.
• Technically, the stock remains above its 50 DMA 2.28 and is trading at 3.3, thus bullish price action wise.
• Thus, overall we retain a HOLD on the stock.

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