Mehabe score: 7 G Factor: 5 Piotski Score: 4 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 5 and Piotski score of 4.
Description
Alok Industries is a textile company with a presence in the cotton and polyester segments. The Company is engaged in manufacturing of textile, including mending and packing activities; leather and other apparel products. Site:ALOKTEXT Main Symbol:ALOKTEXT
Stock trades at 32.0, above its 50dma 25.72. It also trades above its 200dma 23.82. The stock remains bullish on techicals
The 52 week high is at 35.80 and the 52week low is at 18.25
Price Chart
P/E Chart
Sales and Margin
Strengths
– is expected to give good quarter
Weakness
– has low interest coverage ratio.
-The company has delivered a poor sales growth of -21.52% over past five years.
Competition
– The industry trades at a mean P/E of 16.8x. Alok Industries trades at the industry’s max P/E of 188.47x. ALOKTEXT trades at a P/E of x
– Industry’s mean G-Factor is 3.1 while the mean Piotski score is 6.0. ALOKTEXT has a G-Factor of 5 and Piotski scoreof 4.
– Average 1 month return for industry is 14.3%. The max 1- month return was given by Vishal Fabrics: a return of 38.25 %
Quarterly Results
Sales for period ended Dec 2021 is Rs 2129.6 cr compared to Rs 1201.8 cr for period ended Dec 2020, a rise of 77.2% .
vis-vis 136.66 for period ended Dec 2020 .
Operating Margins contracted -210.9 bps for period ended Dec 2021 vis-vis Dec 2020.
Company reported operating profit of Rs 197.25 cr for period ended Dec 2021 and operating profit margin at 9.3 % for same period.
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 6765.0 cr for period ended TTM vis-vis sales of Rs 3848.0 cr for the period ended Mar 2021, a healthy growth of 43.1%. The 3 year sales cagr stood at 26.4%.
Operating margins expanded to 8.0% for period ended TTM vis-vis 5.0% for period ended Mar 2021, expansion of 300.0 bps.
Net Profit reported at Rs -682.0 cr for period ended TTM vis-vis sales of Rs -5673.0 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 345.0 cr for period ended Mar 2021 vis-vis Rs -266.0 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 35% on a 1 Year basis vis-vis a return of 106% over the last 3 Years. – The compounded sales growth on a TTM bassis is 109% vis-vis a compounded sales growth of -11% over the last 3 Years. – The compounded profit growth on a TTM basis is 98% vis-vis a compounded profit growth of 23% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Dec 2021 fii holding stood at 1.45% vis-vis 1.39% for Sep 2021 – Public shareholding has remained largely constant. The Dec 2021 public holding stood at 22.81% vis-vis 22.88% for Sep 2021
Conclusion
– is expected to give good quarter – has low interest coverage ratio.
-The company has delivered a poor sales growth of -21.52% over past five years.
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 25.72 and is trading at 32.0 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
