Mehabe score: 5 G Factor: 3 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 3 and Piotski score of 4.
Description
Tainwala Chemicals& Plastics (India) is principally engaged in the manufacturing of plastic sheets and trading.Site:TAINWALCHMMain Symbol:TAINWALCHM
Stock trades at 94.2, above its 50dma 86.53. It also trades above its 200dma 72.3. The stock remains bullish on techicals
The 52 week high is at 125.25 and the 52week low is at 42.70
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
– is almost debt free.
-Stock is trading at 0.90 times its book value
Weakness
– has low interest coverage ratio.
-The company has delivered a poor sales growth of -7.28% over past five years.
– has a low return on equity of 2.20% for last 3 years.
-Debtor days have increased from 80.62 to 135.39 days.
Competition
– The industry trades at a mean P/E of 30.2x. Astral trades at the industry’s max P/E of 98.4x. TAINWALCHM trades at a P/E of x
– Industry’s mean G-Factor is 4.2 while the mean Piotski score is 9.0. TAINWALCHM has a G-Factor of 3 and Piotski scoreof 4.
– Average 1 month return for industry is 3.7%. The max 1- month return was given by Nilkamal Ltd: a return of 25.41 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 1.31 cr compared to Rs 0.24 cr for period ended Jun 2020, a rise of 445.8%
Company reported negative operating profit of Rs -1.08 cr for period ended Jun 2021. For same period last year, operating profit was -0.66
The EPS for Jun 2021 was Rs -0.59 compared to Rs 0.43 for previous quarter ended Mar 2021 and Rs 0.74 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 7.54 cr for period ended TTM vis-vis sales of Rs 6.47 cr for the period ended Mar 2021, a healthy growth of 14.2%. The 3 year sales cagr stood at -13.2%.
Operating margins shrank to -37.8% for period ended TTM vis-vis -37.56% for period ended Mar 2021, contraction of 24.0 bps.
Net Profit reported at Rs 0.55 cr for period ended TTM vis-vis sales of Rs -0.32 cr for the period ended Mar 2021, rising 158.2%.
Company reported a poor Net Profit CAGR of -35.5% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 3.66 cr for period ended Mar 2021 vis-vis Rs -7.43 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 84% on a 1 Year basis vis-vis a return of 0% over the last 3 Years. – The compounded sales growth on a TTM bassis is -39% vis-vis a compounded sales growth of -17% over the last 3 Years. – The compounded profit growth on a TTM basis is -108% 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 0.0% vis-vis 0.0% for Mar 2021 – Public shareholding has remained largely constant. The Jun 2021 public holding stood at 32.7% vis-vis 32.63% for Mar 2021
Conclusion
– has reduced debt.
– is almost debt free.
-Stock is trading at 0.90 times its book value – has low interest coverage ratio.
-The company has delivered a poor sales growth of -7.28% over past five years.
– has a low return on equity of 2.20% for last 3 years.
-Debtor days have increased from 80.62 to 135.39 days.
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 86.53 and is trading at 94.2 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
