Mehabe score: 1 G Factor: 4 Piotski Score: 4 The stock has a rating SELL. 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 4 and Piotski score of 4.
Description
Salzer Electronics is engaged in the business of manufacture of Electrical Installation Products and Components.Site:SALZERELECMain Symbol:SALZER
Stock trades at 150.0, below its 50dma 162.94. However it is trading above its 200dma 137.5. The stock remains weak in the short term due to near term bearish momentum. However overall bullish structure remains intact. Price action will further build up as it moves above its dma50, currently situated at 162.94.
The 52 week high is at 189.60 and the 52week low is at 87.60
Price Chart
P/E Chart
Sales and Margin
Strengths
– Stock is trading at 0.72 times its book value
– is expected to give good quarter
Weakness
– Promoter holding has decreased over last quarter: -3.20%
-The company has delivered a poor sales growth of 10.89% over past five years.
-Promoter holding is low: 32.63%
– has a low return on equity of 7.90% for last 3 years.
-Dividend payout has been low at 3.56% of profits over last 3 years
Competition
– The industry trades at a mean P/E of 24.6x. A B B trades at the industry’s max P/E of 123.27x. SALZERELEC trades at a P/E of 10.0x
– Industry’s mean G-Factor is 3.5 while the mean Piotski score is 7.0. SALZERELEC has a G-Factor of 4 and Piotski scoreof 4.
– Average 1 month return for industry is -0.5%. The max 1- month return was given by Siemens: a return of 14.07 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 148.98 cr compared to Rs 95.68 cr for period ended Jun 2020, a rise of 55.7%
Operating Profits reported at Rs 14.8 cr for period ended Jun 2021 vis-vis 9.59 for period ended Jun 2020 .
Operating Margins contracted -8.9 bps for period ended Jun 2021 vis-vis Jun 2020 .
The EPS for Jun 2021 was Rs 2.47 compared to Rs 4.37 for previous quarter ended Mar 2021 and Rs 0.43 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 659.0 cr for period ended TTM vis-vis sales of Rs 606.0 cr for the period ended Mar 2021, a growth of 8.0%. The 3 year sales cagr stood at 5.6%.
Net Profit reported at Rs 24.0 cr for period ended TTM vis-vis sales of Rs 21.0 cr for the period ended Mar 2021, rising 12.5%.
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
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 6.0% compared to 8.0% over the last 3 Years. – The stock has given a return of 44% 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 32% vis-vis a compounded sales growth of 11% over the last 3 Years. – The compounded profit growth on a TTM basis is 13% vis-vis a compounded profit growth of 1% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Jun 2021 fii holding stood at 6.84% vis-vis 6.84% for Mar 2021 – Public shareholding has risen for the period ended Jun 2021. The Jun 2021 public holding stood at 60.53% vis-vis 54.66% for Mar 2021
Conclusion
– Stock is trading at 0.72 times its book value
– is expected to give good quarter – Promoter holding has decreased over last quarter: -3.20%
-The company has delivered a poor sales growth of 10.89% over past five years.
-Promoter holding is low: 32.63%
– has a low return on equity of 7.90% for last 3 years.
-Dividend payout has been low at 3.56% of profits over last 3 years
Fundamentally, the stock remains weak. The business fundamentals are on shaky ground. Weak near term results have dampened and questioned business drivers. We suggest to wait for a upturn in business performance.
Technically, the stock reflects the poor fundamentals. The stock remains below its 50 DMA 162.94 and is trading at 150.0. It has shown near term lack of bullish momentum. We suggest to observe price action. However as investors, who like to avoid timing the markets, we suggest to avoid the stock
