Mehabe score: 5 G Factor: 6 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 6 and Piotski score of 4.
Description
Andhra Paper is engaged in the Business of Manufacture and sale of paper, pulp and paper & paper board.
#
Main Points
Product Portfolio
The company produces writing & printing paper, copier and a wide range of specialty paper used in diverse range of applications such as photos, batteries, cups, charts, etc.#Site:ANDHRAPAPMain Symbol:ANDHRAPAP
Stock trades at 262.0, above its 50dma 247.28. It also trades above its 200dma 233.0. The stock remains bullish on techicals
The 52 week high is at 283.70 and the 52week low is at 177.50
Price Chart
P/E Chart
Sales and Margin
Strengths
– is almost debt free.
-Stock is trading at 1.07 times its book value
Weakness
– has low interest coverage ratio.
-The company has delivered a poor sales growth of -4.62% over past five years.
-Promoters have pledged 70.64% of their holding.
Competition
– The industry trades at a mean P/E of 25.6x. Century Textiles trades at the industry’s max P/E of 275.89x. ANDHRAPAP trades at a P/E of x
– Industry’s mean G-Factor is 4.4 while the mean Piotski score is 7.0. ANDHRAPAP has a G-Factor of 6 and Piotski scoreof 4.
– Average 1 month return for industry is 15.1%. The max 1- month return was given by JK Paper: a return of 36.15 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 258.0 cr compared to Rs 121.0 cr for period ended Jun 2020, a rise of 113.2%
Company reported operating profit of Rs 42.0 cr for period ended Jun 2021, operating profit margin at 16.3 %.
Operating profit was negative for the same period last year thus company has improved its margins this year
The EPS for Jun 2021 was Rs 6.57 compared to Rs 8.13 for previous quarter ended Mar 2021 and Rs -6.31 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 1024.0 cr for period ended TTM vis-vis sales of Rs 887.0 cr for the period ended Mar 2021, a healthy growth of 13.4%. The 3 year sales cagr stood at -10.5%.
Operating margins expanded to 11.0% for period ended TTM vis-vis 7.0% for period ended Mar 2021, expansion of 400.0 bps.
Net Profit reported at Rs 47.0 cr for period ended TTM vis-vis sales of Rs -5.0 cr for the period ended Mar 2021, rising 110.6%.
Company reported a poor Net Profit CAGR of -38.3% over the last 3 years
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 worsened on its Return on Equity (RoE) metric. The RoE on Last Year basis was -0.0% compared to 17.0% over the last 3 Years. – The stock has given a return of 16% on a 1 Year basis vis-vis a return of -9% over the last 3 Years. – The compounded sales growth on a TTM bassis is -30% vis-vis a compounded sales growth of -11% over the last 3 Years. – The compounded profit growth on a TTM basis is -102% vis-vis a compounded profit growth of % over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Jun 2021 fii holding stood at 0.0% vis-vis 0.03% for Mar 2021 – Public shareholding has remained largely constant. The Jun 2021 public holding stood at 14.9% vis-vis 15.03% for Mar 2021
Conclusion
– is almost debt free.
-Stock is trading at 1.07 times its book value – has low interest coverage ratio.
-The company has delivered a poor sales growth of -4.62% over past five years.
-Promoters have pledged 70.64% of their holding.
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 247.28 and is trading at 262.0 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
