Mehabe score: 5 G Factor: 4 Piotski Score: 6 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 4 and Piotski score of 6.
Description
Suryalakshmi Cotton Mills was formed in early 1962 as a yarn manufacturing company. It has evolved today as integrated denim & branded Garments manufacturing textile Company. The company also has a captive thermal power plant.Site:SURYALAXMIMain Symbol:SURYALAXMI
Stock trades at 67.6, above its 50dma 58.03. It also trades above its 200dma 45.81. The stock remains bullish on techicals
The 52 week high is at 77.90 and the 52week low is at 14.80
Price Chart
P/E Chart
Sales and Margin
Strengths
– Stock is trading at 0.47 times its book value
– is expected to give good quarter
Weakness
– has low interest coverage ratio.
-The company has delivered a poor sales growth of -8.55% over past five years.
– has a low return on equity of -6.95% for last 3 years.
-Contingent liabilities of Rs.47.64 Cr.
-Promoters have pledged 67.59% of their holding.
-Earnings include an other income of Rs.25.30 Cr.
Competition
– The industry trades at a mean P/E of 11.0x. Arvind Ltd trades at the industry’s max P/E of 45.65x. SURYALAXMI trades at a P/E of 24.2x
– Industry’s mean G-Factor is 4.1 while the mean Piotski score is 8.0. SURYALAXMI has a G-Factor of 4 and Piotski scoreof 6.
– Average 1 month return for industry is 15.2%. The max 1- month return was given by Arvind Ltd: a return of 38.85 %
Quarterly Results
Sales for period ended Sep 2021 is Rs 184.78 cr compared to Rs 99.06 cr for period ended Sep 2020, a rise of 86.5%
Operating Profits reported at Rs 17.92 cr for period ended Sep 2021 vis-vis 3.7 for period ended Sep 2020 .
Operating Margins expanded 596.3 bps for period ended Sep 2021 vis-vis Sep 2020 .
The EPS for Sep 2021 was Rs 2.53 compared to Rs 4.09 for previous quarter ended Jun 2021 and Rs 0.03 for Sep 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 681.0 cr for period ended TTM vis-vis sales of Rs 486.0 cr for the period ended Mar 2021, a healthy growth of 28.6%. The 3 year sales cagr stood at 0.8%.
Operating margins expanded to 10.0% for period ended TTM vis-vis 7.0% for period ended Mar 2021, expansion of 300.0 bps.
Net Profit reported at Rs 20.0 cr for period ended TTM vis-vis sales of Rs -3.0 cr for the period ended Mar 2021, rising 0%.
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 stock has given a return of 307% on a 1 Year basis vis-vis a return of 21% over the last 3 Years. – The compounded sales growth on a TTM bassis is 33% vis-vis a compounded sales growth of -14% over the last 3 Years. – The compounded profit growth on a TTM basis is 113% vis-vis a compounded profit growth of % over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Sep 2021 fii holding stood at 0.0% vis-vis 0.0% for Jun 2021 – Public shareholding has remained largely constant. The Sep 2021 public holding stood at 43.65% vis-vis 43.65% for Jun 2021
Conclusion
– Stock is trading at 0.47 times its book value
– is expected to give good quarter – has low interest coverage ratio.
-The company has delivered a poor sales growth of -8.55% over past five years.
– has a low return on equity of -6.95% for last 3 years.
-Contingent liabilities of Rs.47.64 Cr.
-Promoters have pledged 67.59% of their holding.
-Earnings include an other income of Rs.25.30 Cr.
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 58.03 and is trading at 67.6, thus bullish price action wise.
