Mehabe score: 7 G Factor: 5 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 5 and Piotski score of 5.
Description
AYM Syntex is a leading speciality synthetic yarns manufacturer with world class manufacturing technology for multipolymer yarns. It is the largest Indian manufacturer of Bulk Continuous Filament Yarns and a leading Multipolymer Yarn dyeing house in Asia. #
Main Points
Product Portfolio
The company manufactures a broad range of fibres. Its product portfolio includes Bulk Continuous Filament yarn (BCF), Industrial dyed yarn (IDY), Automotive yarn, textile yarn, packaged dyed yarn, and sewing yarn. #
Its yarns are used in a wide range of products for e.g. carpets, mats, rugs, fabrics, nets, ropes, threads, home textiles, hosiery, denim, etc.Site:AYMSYNTEXMain Symbol:AYMSYNTEX
Stock trades at 81.4, above its 50dma 72.92. It also trades above its 200dma 54.42. The stock remains bullish on techicals
The 52 week high is at 86.90 and the 52week low is at 20.35
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
-Stock is trading at 1.14 times its book value
Weakness
– Though the company is reporting repeated profits, it is not paying out dividend
– has low interest coverage ratio.
-The company has delivered a poor sales growth of 3.60% over past five years.
– has a low return on equity of 4.34% for last 3 years.
-‘s cost of borrowing seems high
Competition
– The industry trades at a mean P/E of 19.4x. Alok Industries trades at the industry’s max P/E of 489.33x. AYMSYNTEX trades at a P/E of 28.9x
– Industry’s mean G-Factor is 3.3 while the mean Piotski score is 6.0. AYMSYNTEX has a G-Factor of 5 and Piotski scoreof 5.
– Average 1 month return for industry is 21.1%. The max 1- month return was given by Vishal Fabrics: a return of 80.71 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 305.96 cr compared to Rs 91.15 cr for period ended Jun 2020, a rise of 235.7%
Company reported operating profit of Rs 31.49 cr for period ended Jun 2021, operating profit margin at 10.3 %.
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 1.85 compared to Rs 3.75 for previous quarter ended Mar 2021 and Rs -3.28 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 1162.0 cr for period ended TTM vis-vis sales of Rs 947.0 cr for the period ended Mar 2021, a healthy growth of 18.5%. The 3 year sales cagr stood at 5.4%.
Operating margins expanded to 11.0% for period ended TTM vis-vis 10.0% for period ended Mar 2021, expansion of 100.0 bps.
Net Profit reported at Rs 40.0 cr for period ended TTM vis-vis sales of Rs 14.0 cr for the period ended Mar 2021, rising 65.0%.
Company recorded a healthy Net Profit CAGR of 88.2% 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 100.0 cr for period ended Mar 2021 vis-vis Rs 79.0 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 4.0% compared to 4.0% over the last 3 Years. – The stock has given a return of 270% on a 1 Year basis vis-vis a return of 21% over the last 3 Years. – The compounded sales growth on a TTM bassis is -8% vis-vis a compounded sales growth of 4% over the last 3 Years. – The compounded profit growth on a TTM basis is -35% vis-vis a compounded profit growth of 24% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Jun 2021 fii holding stood at 0.01% vis-vis 0.0% for Mar 2021 – Public shareholding has remained largely constant. The Jun 2021 public holding stood at 27.34% vis-vis 27.35% for Mar 2021
Conclusion
– has reduced debt.
-Stock is trading at 1.14 times its book value – Though the company is reporting repeated profits, it is not paying out dividend
– has low interest coverage ratio.
-The company has delivered a poor sales growth of 3.60% over past five years.
– has a low return on equity of 4.34% 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 72.92 and is trading at 81.4, thus bullish price action wise.
