Mehabe score: 6 G Factor: 1 Piotski Score: 7 The stock has a rating SELL. 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 7.
Description
AVI Polymers is engaged in the business of Wholesale trading of Chemicals. Site:AVI Main Symbol:AVI
Stock trades at 42.0, below its 50dma 45.26. However it is trading above its 200dma 32.99. The stock remains weak in the short term due to near term bearish momentum. However overall bullish structure remains intact. Price action will further build up as it moves above its dma50, currently situated at 45.26.
The 52 week high is at 59.50 and the 52week low is at 4.85
Price Chart
P/E Chart
Sales and Margin
Strengths
– is almost debt free.
Weakness
– Stock is trading at 3.99 times its book value
-Though the company is reporting repeated profits, it is not paying out dividend
-Promoter holding is low: 28.10%
– has a low return on equity of 3.66% for last 3 years.
– has high debtors of 166.67 days.
-Promoter holding has decreased over last 3 years: -14.33%
Competition
– The industry trades at a mean P/E of 42.0x. Adani Enterp. trades at the industry’s max P/E of 163.2x. AVI trades at a P/E of 37.3x
– Industry’s mean G-Factor is 3.4 while the mean Piotski score is 8.0. AVI has a G-Factor of 1 and Piotski scoreof 7.
– Average 1 month return for industry is -1.4%. The max 1- month return was given by Rain Industries: a return of 9.95 %
Quarterly Results
Sales for period ended Dec 2021 is Rs 2.68 cr compared to Rs 2.02 cr for period ended Dec 2020, a rise of 32.7% .
vis-vis 0.18 for period ended Dec 2020 .
Operating Margins expanded 153.7 bps for period ended Dec 2021 vis-vis Dec 2020.
Company reported operating profit of Rs 0.28 cr for period ended Dec 2021 and operating profit margin at 10.4 % for same period.
The EPS for quarter ended Dec 2021 is Rs 0.68 compared to Rs 0.1 for previous quarter ended Sep 2021 and Rs 0.46 for Dec 2020.
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 4.66 cr for period ended TTM vis-vis sales of Rs 3.92 cr for the period ended Mar 2021, a healthy growth of 15.9%. The 3 year sales cagr stood at 158.4%.
Operating margins expanded to 4.72% for period ended TTM vis-vis 3.32% for period ended Mar 2021, expansion of 140.0 bps.
Net Profit reported at Rs 0.46 cr for period ended TTM vis-vis sales of Rs 0.34 cr for the period ended Mar 2021, rising 26.1%.
Company recorded a healthy Net Profit CAGR of 184.4% 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 0.49 cr for period ended Mar 2021 vis-vis Rs 0.24 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 improved its Return on Equity (RoE) metric. The RoE on Last Year basis was 8.0% compared to 4.0% over the last 3 Years. – The stock has given a return of % on a 1 Year basis vis-vis a return of % over the last 3 Years. – The compounded sales growth on a TTM bassis is 120% vis-vis a compounded sales growth of 53% over the last 3 Years. – The compounded profit growth on a TTM basis is 77% vis-vis a compounded profit growth of 89% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Sep 2021 public holding stood at 71.9% vis-vis 71.9% for Jun 2021
Conclusion
– is almost debt free. – Stock is trading at 3.99 times its book value
-Though the company is reporting repeated profits, it is not paying out dividend
-Promoter holding is low: 28.10%
– has a low return on equity of 3.66% for last 3 years.
– has high debtors of 166.67 days.
-Promoter holding has decreased over last 3 years: -14.33%
Fundamentally, the stock remains weak. The business fundamentals are on shaky ground. Weak near term results have dampened and questioned business drivers. We suggest to wait for a upturn in business performance.
Technically, the stock reflects the poor fundamentals. The stock remains below its 50 DMA 45.26 and is trading at 42.0. It has shown near term lack of bullish momentum. We suggest to observe price action. However as investors, who like to avoid timing the markets, we suggest to avoid the stock
