Mehabe score: 7 G Factor: 1 Piotski Score: 3 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 1 and Piotski score of 3.
Description
Established in 1980 as a manufacturer and trader non ferrous metals like brass rods & tubes and copper pipes, ABC Gas International Limited (formerly known as Brassco Extrusions Ltd.) is now the largest ISO certified Gas Reticulation Company in India.
The company works in designing, installing and maintaining LPG Reticulated Systems. Site:ABCGAS Main Symbol:ABCGAS
Stock trades at 12.4, above its 50dma 10.4. It also trades above its 200dma 8.92. The stock remains bullish on techicals
The 52 week high is at 13.65 and the 52week low is at 6.75
Price Chart
P/E Chart
Sales and Margin
Strengths
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Weakness
– has low interest coverage ratio.
-The company has delivered a poor sales growth of -29.07% over past five years.
-Promoter holding is low: 33.09%
– has a low return on equity of -9.50% for last 3 years.
– might be capitalizing the interest cost
– has high debtors of 3241.55 days.
Competition
– The industry trades at a mean P/E of 44.0x. Adani Enterp. trades at the industry’s max P/E of 174.52x. ABCGAS trades at a P/E of x
– Industry’s mean G-Factor is 3.0 while the mean Piotski score is 8.0. ABCGAS has a G-Factor of 1 and Piotski scoreof 3.
– Average 1 month return for industry is 5.0%. The max 1- month return was given by MMTC: a return of 15.77 %
Quarterly Results
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Company reported negative operating profit of Rs -0.15 cr for period ended Sep 2021. For same period last year, operating profit was -0.06.
The EPS for quarter ended Sep 2021 is Rs -0.35 compared to Rs -0.61 for previous quarter ended Jun 2021 and Rs 0.0 for Sep 2020.
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 1.94 cr for period ended TTM vis-vis sales of Rs 0.42 cr for the period ended Mar 2021, a healthy growth of 78.4%. The 3 year sales cagr stood at 36.1%.
Operating margins expanded to -46.91% for period ended TTM vis-vis -157.14% for period ended Mar 2021, expansion of 11023.0 bps.
Net Profit reported at Rs -0.61 cr for period ended TTM vis-vis sales of Rs -0.41 cr for the period ended Mar 2021, falling 0%.
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 0.16 cr for period ended Mar 2021 vis-vis Rs -0.43 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 worsened on its Return on Equity (RoE) metric. The RoE on Last Year basis was -25.0% compared to -10.0% over the last 3 Years. – The stock has given a return of 44% on a 1 Year basis vis-vis a return of -15% over the last 3 Years. – The compounded sales growth on a TTM bassis is 19300% vis-vis a compounded sales growth of -36% over the last 3 Years. – The compounded profit growth on a TTM basis is -205% vis-vis a compounded profit growth of % over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Dec 2021 public holding stood at 66.91% vis-vis 66.91% for Sep 2021
Conclusion
– – has low interest coverage ratio.
-The company has delivered a poor sales growth of -29.07% over past five years.
-Promoter holding is low: 33.09%
– has a low return on equity of -9.50% for last 3 years.
– might be capitalizing the interest cost
– has high debtors of 3241.55 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 10.4 and is trading at 12.4 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
