Mehabe score: 4 G Factor: 3 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 3 and Piotski score of 3.
Description
Safari Industries (India) is engaged in the Business of Hard and Soft Luggage.Site:SAFARIMain Symbol:SAFARIND
Stock trades at 757.0, above its 50dma 674.26. It also trades above its 200dma 591.3. The stock remains bullish on techicals
The 52 week high is at 842.45 and the 52week low is at 323.90
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
– is almost debt free.
Weakness
– Stock is trading at 6.07 times its book value
– has low interest coverage ratio.
-Promoter holding has decreased over last quarter: -4.91%
-The company has delivered a poor sales growth of 3.90% over past five years.
– has a low return on equity of 5.69% for last 3 years.
Competition
– The industry trades at a mean P/E of 0.0x. V I P Inds. trades at the industry’s max P/E of 0.0x. SAFARI trades at a P/E of x
– Industry’s mean G-Factor is 2.5 while the mean Piotski score is 3.0. SAFARI has a G-Factor of 3 and Piotski scoreof 3.
– Average 1 month return for industry is 7.6%. The max 1- month return was given by Safari Inds.: a return of 12.44 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 132.91 cr compared to Rs 144.4 cr for period ended Mar 2020, a fall of 8.0%
Operating Profits reported at Rs 13.37 cr for period ended Mar 2021 vis-vis 13.23 for period ended Mar 2020 .
Operating Margins expanded 89.7 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 2.78 compared to Rs 0.53 for previous quarter ended Dec 2020 and Rs 2.09 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 328.0 cr for period ended Mar 2021 vis-vis sales of Rs 686.0 cr for the period ended Mar 2020, a fall of 109.1%. The 3 year sales cagr stood at -7.8%.
Operating margins shrank to -2.0% for period ended Mar 2021 vis-vis 11.0% for period ended Mar 2020, contraction of 1300.0 bps.
Net Profit reported at Rs -21.0 cr for period ended Mar 2021 vis-vis sales of Rs 31.0 cr for the period ended Mar 2020, falling 0%.
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 111.0 cr for period ended Mar 2021 vis-vis Rs 72.0 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 worsened on its Return on Equity (RoE) metric. The RoE on Last Year basis was -8.0% compared to 6.0% over the last 3 Years. – The stock has given a return of 106% on a 1 Year basis vis-vis a return of 2% over the last 3 Years. – The compounded sales growth on a TTM bassis is -52% vis-vis a compounded sales growth of -8% over the last 3 Years. – The compounded profit growth on a TTM basis is -168% 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 16.24% vis-vis 15.75% for Mar 2021 – Public shareholding has risen for the period ended Jun 2021. The Jun 2021 public holding stood at 27.86% vis-vis 23.25% for Mar 2021
Conclusion
– has reduced debt.
– is almost debt free. – Stock is trading at 6.07 times its book value
– has low interest coverage ratio.
-Promoter holding has decreased over last quarter: -4.91%
-The company has delivered a poor sales growth of 3.90% over past five years.
– has a low return on equity of 5.69% 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 674.26 and is trading at 757.0 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
