Mehabe score: 5 G Factor: 2 Piotski Score: 5 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 2 and Piotski score of 5.
Description
TRF Limited is engaged in production of material handling equipments and undertaking turnkey projects of material handling for the infrastructure and industrial sector.[1]Site:TRFMain Symbol:TRF
Stock trades at 136.0, above its 50dma 119.77. It also trades above its 200dma 109.53. The stock remains bullish on techicals
The 52 week high is at 171.15 and the 52week low is at 70.00
Price Chart
P/E Chart
Sales and Margin
Strengths
–
Weakness
– has low interest coverage ratio.
-The company has delivered a poor sales growth of -34.83% over past five years.
-Promoter holding is low: 34.12%
-Contingent liabilities of Rs.137.10 Cr.
– has high debtors of 585.99 days.
Competition
– The industry trades at a mean P/E of 20.7x. HLE Glascoat trades at the industry’s max P/E of 144.91x. TRF trades at a P/E of x
– Industry’s mean G-Factor is 3.2 while the mean Piotski score is 8.0. TRF has a G-Factor of 2 and Piotski scoreof 5.
– Average 1 month return for industry is -0.1%. The max 1- month return was given by Thermax: a return of 10.5 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 16.0 cr compared to Rs 10.0 cr for period ended Jun 2020, a rise of 60.0%
Company reported negative operating profit of Rs -11.0 cr for period ended Jun 2021. For same period last year, operating profit was -21.0
The EPS for Jun 2021 was Rs -18.06 compared to Rs -6.26 for previous quarter ended Mar 2021 and Rs -25.56 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 119.0 cr for period ended TTM vis-vis sales of Rs 113.0 cr for the period ended Mar 2021, a growth of 5.0%. The 3 year sales cagr stood at -18.9%.
Operating margins expanded to -53.0% for period ended TTM vis-vis -58.0% for period ended Mar 2021, expansion of 500.0 bps.
Net Profit reported at Rs -85.0 cr for period ended TTM vis-vis sales of Rs -93.0 cr for the period ended Mar 2021, rising 0%.
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 21.0 cr for period ended Mar 2021 vis-vis Rs -56.0 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 67% on a 1 Year basis vis-vis a return of 4% over the last 3 Years. – The compounded sales growth on a TTM bassis is -13% vis-vis a compounded sales growth of -36% over the last 3 Years. – The compounded profit growth on a TTM basis is 56% vis-vis a compounded profit growth of 8% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Sep 2021 public holding stood at 65.85% vis-vis 65.85% for Jun 2021
Conclusion
– – has low interest coverage ratio.
-The company has delivered a poor sales growth of -34.83% over past five years.
-Promoter holding is low: 34.12%
-Contingent liabilities of Rs.137.10 Cr.
– has high debtors of 585.99 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 119.77 and is trading at 136.0 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
