Mehabe score: 3 G Factor: 4 Piotski Score: 4 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 4 and Piotski score of 4.
Description
Sun Pharma Advanced Research Company is engaged in the business of research & development of pharmaceutical products.Site:SPARCMain Symbol:SPARC
Stock trades at 260.0, above its 50dma 231.93. It also trades above its 200dma 198.2. The stock remains bullish on techicals
The 52 week high is at 268.45 and the 52week low is at 141.00
Price Chart
P/E Chart
Sales and Margin
Strengths
– is expected to give good quarter
-Debtor days have improved from 40.64 to 25.37 days.
Weakness
– has low interest coverage ratio.
Competition
– The industry trades at a mean P/E of 28.1x. Jubilant Ingrevia trades at the industry’s max P/E of 157.81x. SPARC trades at a P/E of x
– Industry’s mean G-Factor is 4.1 while the mean Piotski score is 9.0. SPARC has a G-Factor of 4 and Piotski scoreof 4.
– Average 1 month return for industry is 14.5%. The max 1- month return was given by C D S L: a return of 44.03 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 22.0 cr compared to Rs 185.0 cr for period ended Jun 2020, a fall of 88.1%
Company reported negative operating profit of Rs -54.0 cr for period ended Jun 2021. For same period last year, operating profit was 61.0
The EPS for Jun 2021 was Rs -2.34 compared to Rs -2.16 for previous quarter ended Mar 2021 and Rs 2.16 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 90.0 cr for period ended TTM vis-vis sales of Rs 253.0 cr for the period ended Mar 2021, a fall of 181.1%. The 3 year sales cagr stood at -21.1%.
Operating margins shrank to -279.0% for period ended TTM vis-vis -53.0% for period ended Mar 2021, contraction of 22600.0 bps.
Net Profit reported at Rs -269.0 cr for period ended TTM vis-vis sales of Rs -151.0 cr for the period ended Mar 2021, falling 0%.
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities: Rs -152.0 cr for period ended Mar 2021 vis-vis Rs -211.0 cr for period ended Mar 2020
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The stock has given a return of 49% on a 1 Year basis vis-vis a return of -11% over the last 3 Years. – The compounded sales growth on a TTM bassis is 229% vis-vis a compounded sales growth of 48% over the last 3 Years. – The compounded profit growth on a TTM basis is 53% vis-vis a compounded profit growth of 12% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Jun 2021 fii holding stood at 2.61% vis-vis 2.69% for Mar 2021 – Public shareholding has remained largely constant. The Jun 2021 public holding stood at 28.91% vis-vis 28.83% for Mar 2021
Conclusion
– is expected to give good quarter
-Debtor days have improved from 40.64 to 25.37 days. – has low interest coverage ratio.
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 231.93 and is trading at 260.0 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
