Mehabe score: 4 G Factor: 5 Piotski Score: 7 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 7.
Description
Rossell India Ltd was incorporated in 1994 by Mr. H.M. Gupta # as Rossell Tea Ltd. It added Aviation and Defence manufacturing and service capabilities for its growth. On 19th April 2011, the company named itself Rossell India Ltd to represent its diverse business. The company has two divisions, namely Tea and Aerospace Defence (Engineering, Manufacturing, and Services). It has spent 27 years in the Tea division and 9 years in the A&D division. The company’s promoter has around three decades of experience in the tea industry. In FY 2013, the company entered the hospitality division but was discontinued from October 1, 2019.
Main Points
Business Segments
The Company is engaged in the following businesses:
Rossell Tea Division:
Cultivation, Manufacture, and Sale of Black Tea. (primarily the orthodox variety of tea)
Segment contributed 46% of Revenue in FY20 which used to be 75% in FY16.Site:ROSSELLIND
Market Cap:
Rs 592 cr
Price:
161.0
Trading pe:
15.7x
Book-value:
63.4/share
Div yield:
0.12 %
Earning yield:
8.52%
Face-value:
2.00/share
52week high:
178.10
52week low:
59.25
Technical Analysis
Stock trades at 161.0, above its 50dma 131.19. It also trades above its 200dma 117.09. The stock remains bullish on techicals
The 52 week high is at 178.10 and the 52week low is at 59.25
Price Chart
P/E Chart
Sales and Margin
Strengths
– has delivered good profit growth of 46.79% CAGR over last 5 years
Weakness
– Stock is trading at 2.55 times its book value
– has a low return on equity of 3.79% for last 3 years.
Competition
– The industry trades at a mean P/E of 13.7x. Tata Consumer trades at the industry’s max P/E of 80.39x. ROSSELLIND trades at a P/E of 15.7x
– Industry’s mean G-Factor is 4.4 while the mean Piotski score is 9.0. ROSSELLIND has a G-Factor of 5 and Piotski scoreof 7.
– Average 1 month return for industry is 8.8%. The max 1- month return was given by Rossell India: a return of 31.43 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 67.0 cr compared to Rs 54.0 cr for period ended Mar 2020, a rise of 24.1%
Company reported negative operating profit of Rs -16.0 cr for period ended Mar 2021. For same period last year, operating profit was -10.0
The EPS for Mar 2021 was Rs -6.23 compared to Rs 1.95 for previous quarter ended Dec 2020 and Rs -5.13 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 322.0 cr for period ended Mar 2021 vis-vis sales of Rs 309.0 cr for the period ended Mar 2020, a growth of 4.0%. The 3 year sales cagr stood at 17.6%.
Operating margins expanded to 21.0% for period ended Mar 2021 vis-vis 16.0% for period ended Mar 2020, expansion of 500.0 bps.
Net Profit reported at Rs 33.0 cr for period ended Mar 2021 vis-vis sales of Rs 19.0 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 company has improved its Return on Equity (RoE) metric. The RoE on Last Year basis was 11.0% compared to 4.0% over the last 3 Years. – The stock has given a return of 164% on a 1 Year basis vis-vis a return of 30% over the last 3 Years. – The compounded sales growth on a TTM bassis is 0% vis-vis a compounded sales growth of 24% over the last 3 Years. – The compounded profit growth on a TTM basis is 62% vis-vis a compounded profit growth of 95% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2021 fii holding stood at 7.29% vis-vis 7.41% for Dec 2020 – Public shareholding has remained largely constant. The Mar 2021 public holding stood at 17.55% vis-vis 17.43% for Dec 2020
Conclusion
– has delivered good profit growth of 46.79% CAGR over last 5 years – Stock is trading at 2.55 times its book value
– has a low return on equity of 3.79% for last 3 years.
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 131.19 and is trading at 161.0, thus bullish price action wise.
