Mehabe score: 4 G Factor: 3 Piotski Score: 7 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 7.
Description
Wendt India in the business of Super Abrasives, Machine Tools and Precision Components.Site:WENDTMain Symbol:WENDT
Stock trades at 4339.0, above its 50dma 3643.96. It also trades above its 200dma 3282.81. The stock remains bullish on techicals
The 52 week high is at 4498.00 and the 52week low is at 2395.00
Price Chart
P/E Chart
Sales and Margin
Strengths
– is almost debt free.
– has been maintaining a healthy dividend payout of 45.26%
Weakness
– Stock is trading at 6.05 times its book value
-The company has delivered a poor sales growth of 0.27% over past five years.
– has a low return on equity of 8.97% for last 3 years.
-Debtor days have increased from 76.92 to 97.30 days.
Competition
– The industry trades at a mean P/E of 52.0x. Wendt India trades at the industry’s max P/E of 75.34x. WENDT trades at a P/E of 75.3x
– Industry’s mean G-Factor is 3.4 while the mean Piotski score is 9.0. WENDT has a G-Factor of 3 and Piotski scoreof 7.
– Average 1 month return for industry is 7.4%. The max 1- month return was given by Orient Abrasives: a return of 18.02 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 45.62 cr compared to Rs 26.29 cr for period ended Mar 2020, a rise of 73.5%
Operating Profits reported at Rs 8.66 cr for period ended Mar 2021 vis-vis 0.83 for period ended Mar 2020 .
Operating Margins expanded 1582.6 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 26.5 compared to Rs 21.35 for previous quarter ended Dec 2020 and Rs -3.85 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 137.0 cr for period ended Mar 2021 vis-vis sales of Rs 143.0 cr for the period ended Mar 2020, a fall of 4.4%. The 3 year sales cagr stood at -2.3%.
Operating margins expanded to 17.0% for period ended Mar 2021 vis-vis 13.0% for period ended Mar 2020, expansion of 400.0 bps.
Net Profit reported at Rs 13.0 cr for period ended Mar 2021 vis-vis sales of Rs 10.0 cr for the period ended Mar 2020, rising 23.1%.
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 company has had stable/constant Return on Equity (RoE) metric. The RoE on Last Year basis was 8.0% compared to 9.0% over the last 3 Years. – The stock has given a return of 66% on a 1 Year basis vis-vis a return of 12% over the last 3 Years. – The compounded sales growth on a TTM bassis is -5% vis-vis a compounded sales growth of -2% over the last 3 Years. – The compounded profit growth on a TTM basis is 29% vis-vis a compounded profit growth of -4% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Mar 2021 public holding stood at 21.82% vis-vis 20.17% for Dec 2020
Conclusion
– is almost debt free.
– has been maintaining a healthy dividend payout of 45.26% – Stock is trading at 6.05 times its book value
-The company has delivered a poor sales growth of 0.27% over past five years.
– has a low return on equity of 8.97% for last 3 years.
-Debtor days have increased from 76.92 to 97.30 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 3643.96 and is trading at 4339.0 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
