Mehabe score: 5 G Factor: 2 Piotski Score: 6 The stock has a rating SELL. 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 6.
Description
Aarnav Fashions manufactures fabrics for shirts, dresses, garments for ladies & kids and fabrics for home furnishing. The company is located in the industrial zone of Ahmedabad, Gujarat [1]. Site:AARNAV Main Symbol:AARNAV
Stock trades at 84.6, below its 50dma 109.92 and below its 200dma 86.2. The stock remains bearish on technicals
The 52 week high is at 202.25 and the 52week low is at 56.30
Price Chart
P/E Chart
Sales and Margin
Strengths
– is almost debt free.
– is expected to give good quarter
– has been maintaining a healthy dividend payout of 18.88%
Weakness
– Promoter holding is low: 27.21%
– has high debtors of 314.51 days.
-Promoter holding has decreased over last 3 years: -28.79%
Competition
– The industry trades at a mean P/E of 40.5x. Adani Enterp. trades at the industry’s max P/E of 161.6x. AARNAV trades at a P/E of 38.9x
– Industry’s mean G-Factor is 3.4 while the mean Piotski score is 8.0. AARNAV has a G-Factor of 2 and Piotski scoreof 6.
– Average 1 month return for industry is -8.6%. The max 1- month return was given by MMTC: a return of 25.37 %
Quarterly Results
Sales for period ended Dec 2021 is Rs 14.99 cr compared to Rs 8.62 cr for period ended Dec 2020, a rise of 73.9% .
vis-vis 1.15 for period ended Dec 2020 .
Operating Margins contracted -526.9 bps for period ended Dec 2021 vis-vis Dec 2020.
Company reported operating profit of Rs 1.21 cr for period ended Dec 2021 and operating profit margin at 8.1 % for same period.
The EPS for quarter ended Dec 2021 is Rs 0.6 compared to Rs 0.51 for previous quarter ended Sep 2021 and Rs 0.57 for Dec 2020.
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 45.54 cr for period ended TTM vis-vis sales of Rs 32.1 cr for the period ended Mar 2021, a healthy growth of 29.5%. The 3 year sales cagr stood at 206.6%.
Operating margins shrank to 9.2% for period ended TTM vis-vis 12.24% for period ended Mar 2021, contraction of 304.0 bps.
Net Profit reported at Rs 3.3 cr for period ended TTM vis-vis sales of Rs 3.09 cr for the period ended Mar 2021, rising 6.4%.
Company recorded a healthy Net Profit CAGR of 163.7% 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 0.11 cr for period ended Mar 2021 vis-vis Rs -14.85 cr for period ended Mar 2020
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 14.0% compared to 15.0% over the last 3 Years. – The stock has given a return of 0% on a 1 Year basis vis-vis a return of 78% over the last 3 Years. – The compounded sales growth on a TTM bassis is 20% vis-vis a compounded sales growth of 267% over the last 3 Years. – The compounded profit growth on a TTM basis is 19% vis-vis a compounded profit growth of 195% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Dec 2021 public holding stood at 72.79% vis-vis 72.79% for Sep 2021
Conclusion
– is almost debt free.
– is expected to give good quarter
– has been maintaining a healthy dividend payout of 18.88% – Promoter holding is low: 27.21%
– has high debtors of 314.51 days.
-Promoter holding has decreased over last 3 years: -28.79%
Fundamentally, the stock remains weak. The business fundamentals are on shaky ground. Weak near term results have dampened and questioned business drivers. We suggest to wait for a upturn in business performance.
Technically, the stock reflects the poor fundamentals. The stock remains below its 50 DMA 109.92 and is trading at 84.6. It has shown near term lack of bullish momentum. We suggest to observe price action. However as investors, who like to avoid timing the markets, we suggest to avoid the stock
