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Our Rating: HOLD
Mehabe score: 3 G Factor: 4 Piotski Score: 5 The stock has a rating 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 4 and Piotski score of 5.
Description
Ambika Cotton Mills is engaged in manufacturing and selling speciality cotton yarn catering to the needs of manufacturers of premium branded shirts and t-shirts. Exports constitute significant portion of the operations. The company operates with total installed spindle capacity of 108288 (Previous Year 108288 Spindles) of compact facility housed in four units and Knitting facility of converting 40,000 Kgs of yarn per day into fabrics.
Main Points
Marquee Customers
Exports are 71.97% of revenue # and main overseas clients are Quannitex Enterprise Corporatio, Pacific Textiles and Winnitex Investment Company #. Main domestic customers are Arvind Mills, Raymond, Aashima Textiles and Morarjee #Site:AMBIKCO
Market Cap:
Rs 722 cr
Price:
1261.0
Trading pe:
10.6x
Book-value:
884/share
Div yield:
1.19 %
Earning yield:
9.20%
Face-value:
10.0/share
52week high:
1324.00
52week low:
603.05
Technical Analysis
Stock trades at 1261.0, above its 50dma 1076.11. It also trades above its 200dma 923.75. The stock remains bullish on techicals
The 52 week high is at 1324.00 and the 52week low is at 603.05
Price Chart
P/E Chart
Sales and Margin
Strengths
– is almost debt free.
– has been maintaining a healthy dividend payout of 24.39%
Weakness
– The company has delivered a poor sales growth of 5.18% over past five years.
– has a low return on equity of 12.67% for last 3 years.
Competition
– The industry trades at a mean P/E of 16.0x. Arvind Ltd trades at the industry’s max P/E of 938.72x. AMBIKCO trades at a P/E of 10.6x
– Industry’s mean G-Factor is 4.7 while the mean Piotski score is 8.0. AMBIKCO has a G-Factor of 4 and Piotski scoreof 5.
– Average 1 month return for industry is 9.1%. The max 1- month return was given by Indo Count Inds.: a return of 14.42 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 196.0 cr compared to Rs 147.0 cr for period ended Mar 2020, a rise of 33.3%
Operating Profits reported at Rs 48.0 cr for period ended Mar 2021 vis-vis 22.0 for period ended Mar 2020 .
Operating Margins expanded 952.4 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 50.6 compared to Rs 36.86 for previous quarter ended Dec 2020 and Rs 18.22 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 633.0 cr for period ended Mar 2021 vis-vis sales of Rs 623.0 cr for the period ended Mar 2020, a growth of 1.6%. The 3 year sales cagr stood at 2.7%.
Operating margins expanded to 20.0% for period ended Mar 2021 vis-vis 17.0% for period ended Mar 2020, expansion of 300.0 bps.
Net Profit reported at Rs 68.0 cr for period ended Mar 2021 vis-vis sales of Rs 52.0 cr for the period ended Mar 2020, rising 23.5%.
Company recorded a Net Profit CAGR of 3.7% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
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 13.0% compared to 13.0% over the last 3 Years. – The stock has given a return of 90% on a 1 Year basis vis-vis a return of -1% over the last 3 Years. – The compounded sales growth on a TTM bassis is 2% vis-vis a compounded sales growth of 3% over the last 3 Years. – The compounded profit growth on a TTM basis is 30% vis-vis a compounded profit growth of 4% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2021 fii holding stood at 0.0% vis-vis 0.0% for Dec 2020 – Public shareholding has remained largely constant. The Mar 2021 public holding stood at 49.81% vis-vis 49.81% for Dec 2020
Conclusion
– is almost debt free.
– has been maintaining a healthy dividend payout of 24.39% – The company has delivered a poor sales growth of 5.18% over past five years.
– has a low return on equity of 12.67% for last 3 years.
The business fundamentals of the stock remain stable. Stronger near term results will build interest in the stock. We suggest to wait for a upturn in business performance.
Technically, the stock remains above its 50 DMA 1076.11 and is trading at 1261.0, thus bullish price action wise.
