Mehabe score: 3 G Factor: 3 Piotski Score: 9 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 9.
Description
Timken India is into manufacture, distribution and sale of anti-friction bearings primarily tapered roller bearings, other roller bearings, components, accsessories and mechanical power transmission products for diverse customer base.Site:TIMKEN
Market Cap:
Rs 10,407 cr
Price:
1384.0
Trading pe:
72.7x
Book-value:
210/share
Div yield:
3.61 %
Earning yield:
2.03%
Face-value:
10.0/share
52week high:
1450.00
52week low:
904.35
Technical Analysis
Stock trades at 1384.0, above its 50dma 1327.97. It also trades above its 200dma 1223.34. The stock remains bullish on techicals
The 52 week high is at 1450.00 and the 52week low is at 904.35
Price Chart
P/E Chart
Sales and Margin
Strengths
– is almost debt free.
– has been maintaining a healthy dividend payout of 55.25%
Weakness
– The company has delivered a poor sales growth of 6.24% over past five years.
– has a low return on equity of 13.26% for last 3 years.
-Promoter holding has decreased over last 3 years: -7.20%
Competition
– The industry trades at a mean P/E of 30.8x. Timken India trades at the industry’s max P/E of 72.68x. TIMKEN trades at a P/E of 72.7x
– Industry’s mean G-Factor is 4.1 while the mean Piotski score is 9.0. TIMKEN has a G-Factor of 3 and Piotski scoreof 9.
– Average 1 month return for industry is 16.8%. The max 1- month return was given by Austin Engg Co: a return of 29.33 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 475.0 cr compared to Rs 405.0 cr for period ended Mar 2020, a rise of 17.3%
Operating Profits reported at Rs 87.0 cr for period ended Mar 2021 vis-vis 93.0 for period ended Mar 2020 .
Operating Margins contracted -464.7 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 7.04 compared to Rs 4.94 for previous quarter ended Dec 2020 and Rs 8.14 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 1411.0 cr for period ended Mar 2021 vis-vis sales of Rs 1618.0 cr for the period ended Mar 2020, a fall of 14.7%. The 3 year sales cagr stood at 4.6%.
Operating margins shrank to 18.0% for period ended Mar 2021 vis-vis 22.0% for period ended Mar 2020, contraction of 400.0 bps.
Net Profit reported at Rs 143.0 cr for period ended Mar 2021 vis-vis sales of Rs 246.0 cr for the period ended Mar 2020, falling 72.0%.
Company recorded a healthy Net Profit CAGR of 15.8% 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 9.0% compared to 13.0% over the last 3 Years. – The stock has given a return of 49% on a 1 Year basis vis-vis a return of 24% over the last 3 Years. – The compounded sales growth on a TTM bassis is -13% vis-vis a compounded sales growth of 5% over the last 3 Years. – The compounded profit growth on a TTM basis is -42% vis-vis a compounded profit growth of 16% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2021 fii holding stood at 2.93% vis-vis 3.13% for Dec 2020 – Public shareholding has remained largely constant. The Mar 2021 public holding stood at 17.85% vis-vis 18.86% for Dec 2020
Conclusion
– is almost debt free.
– has been maintaining a healthy dividend payout of 55.25% – The company has delivered a poor sales growth of 6.24% over past five years.
– has a low return on equity of 13.26% for last 3 years.
-Promoter holding has decreased over last 3 years: -7.20%
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 1327.97 and is trading at 1384.0 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
