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
Seshasayee Paper & Boards is engaged in engaged in the business of manufacture and sale of printing and writing paper.Site:SESHAPAPERMain Symbol:SESHAPAPER
Stock trades at 175.0, below its 50dma 182.11. However it is trading above its 200dma 172.09. 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 182.11.
The 52 week high is at 230.00 and the 52week low is at 125.35
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
– is almost debt free.
-Stock is trading at 0.96 times its book value
Weakness
– The company has delivered a poor sales growth of -4.95% over past five years.
-Tax rate seems low
-Dividend payout has been low at 13.51% of profits over last 3 years
-Debtor days have increased from 28.34 to 38.12 days.
Competition
– The industry trades at a mean P/E of 12.9x. Century Textiles trades at the industry’s max P/E of 105.22x. SESHAPAPER trades at a P/E of 10.3x
– Industry’s mean G-Factor is 4.7 while the mean Piotski score is 5.0. SESHAPAPER has a G-Factor of 4 and Piotski scoreof 4.
– Average 1 month return for industry is -1.6%. The max 1- month return was given by West Coast Paper: a return of 6.21 %
Quarterly Results
Sales for period ended Sep 2021 is Rs 332.0 cr compared to Rs 150.0 cr for period ended Sep 2020, a rise of 121.3%
Operating Profits reported at Rs 40.0 cr for period ended Sep 2021 vis-vis 28.0 for period ended Sep 2020 .
Operating Margins contracted -661.8 bps for period ended Sep 2021 vis-vis Sep 2020 .
The EPS for Sep 2021 was Rs 4.36 compared to Rs 3.15 for previous quarter ended Jun 2021 and Rs 2.98 for Sep 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 1042.0 cr for period ended TTM vis-vis sales of Rs 782.0 cr for the period ended Mar 2021, a healthy growth of 25.0%. The 3 year sales cagr stood at -7.7%.
Operating margins shrank to 11.0% for period ended TTM vis-vis 14.0% for period ended Mar 2021, contraction of 300.0 bps.
Net Profit reported at Rs 116.0 cr for period ended TTM vis-vis sales of Rs 106.0 cr for the period ended Mar 2021, rising 8.6%.
Company reported a poor Net Profit CAGR of -15.5% over the last 3 years
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 worsened on its Return on Equity (RoE) metric. The RoE on Last Year basis was 10.0% compared to 17.0% over the last 3 Years. – The stock has given a return of 35% on a 1 Year basis vis-vis a return of -5% over the last 3 Years. – The compounded sales growth on a TTM bassis is -18% vis-vis a compounded sales growth of -11% over the last 3 Years. – The compounded profit growth on a TTM basis is -34% vis-vis a compounded profit growth of -4% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Sep 2021 fii holding stood at 10.95% vis-vis 10.95% for Jun 2021 – Public shareholding has remained largely constant. The Sep 2021 public holding stood at 31.89% vis-vis 32.1% for Jun 2021
Conclusion
– has reduced debt.
– is almost debt free.
-Stock is trading at 0.96 times its book value – The company has delivered a poor sales growth of -4.95% over past five years.
-Tax rate seems low
-Dividend payout has been low at 13.51% of profits over last 3 years
-Debtor days have increased from 28.34 to 38.12 days.
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 182.11 and is trading at 175.0. 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
