Mehabe score: 4 G Factor: 6 Piotski Score: 7 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 6 and Piotski score of 7.
Description
Apar, founded by Mr. Dharmsinh D. Desai in 1958, is a market leader in India with a global presence. Contributing to India’s process of electrification it started from manufacturing power transmission cables to having three broad business segments, which are Conductors, Transformer and specialty oils (TSO), and Power/telecom Cables. # #
Main Points
Leader in Conductors (48% of Revenue):
Apar has a market share of 25%.
It is amongst the largest global manufacturer (a pioneer in aluminum alloy rod & conductors)
It supplies to all top 25 global turnkey operators and leading utilities. #
Rs 367 Cr invested during FY13-FY19Site:APARINDSMain Symbol:APARINDS
Stock trades at 568.0, above its 50dma 523.18. It also trades above its 200dma 449.82. The stock remains bullish on techicals
The 52 week high is at 606.00 and the 52week low is at 277.55
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
– has been maintaining a healthy dividend payout of 25.42%
Weakness
– The company has delivered a poor sales growth of 4.70% over past five years.
– has a low return on equity of 11.78% for last 3 years.
-‘s cost of borrowing seems high
Competition
– The industry trades at a mean P/E of 29.4x. A B B trades at the industry’s max P/E of 159.82x. APARINDS trades at a P/E of 13.5x
– Industry’s mean G-Factor is 3.9 while the mean Piotski score is 7.0. APARINDS has a G-Factor of 6 and Piotski scoreof 7.
– Average 1 month return for industry is 0.1%. The max 1- month return was given by Crompton Gr. Con: a return of 9.24 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 1899.0 cr compared to Rs 1792.0 cr for period ended Mar 2020, a rise of 6.0%
Operating Profits reported at Rs 101.0 cr for period ended Mar 2021 vis-vis 105.0 for period ended Mar 2020 .
Operating Margins contracted -54.1 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 12.44 compared to Rs 21.55 for previous quarter ended Dec 2020 and Rs 6.1 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 6388.0 cr for period ended Mar 2021 vis-vis sales of Rs 7462.0 cr for the period ended Mar 2020, a fall of 16.8%. The 3 year sales cagr stood at 3.2%.
Operating margins shrank to 6.0% for period ended Mar 2021 vis-vis 7.0% for period ended Mar 2020, contraction of 100.0 bps.
Net Profit reported at Rs 160.0 cr for period ended Mar 2021 vis-vis sales of Rs 135.0 cr for the period ended Mar 2020, rising 15.6%.
Company recorded a Net Profit CAGR of 3.3% 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 324.0 cr for period ended Mar 2021 vis-vis Rs 94.0 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 12.0% compared to 12.0% over the last 3 Years. – The stock has given a return of 77% on a 1 Year basis vis-vis a return of -4% over the last 3 Years. – The compounded sales growth on a TTM bassis is -14% vis-vis a compounded sales growth of 3% over the last 3 Years. – The compounded profit growth on a TTM basis is 19% 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 4.18% vis-vis 5.57% for Dec 2020 – Public shareholding has risen for the period ended Mar 2021. The Mar 2021 public holding stood at 15.63% vis-vis 13.42% for Dec 2020
Conclusion
– has reduced debt.
– has been maintaining a healthy dividend payout of 25.42% – The company has delivered a poor sales growth of 4.70% over past five years.
– has a low return on equity of 11.78% for last 3 years.
-‘s cost of borrowing seems high
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 523.18 and is trading at 568.0, thus bullish price action wise.
