Mehabe score: 4 G Factor: 1 Piotski Score: 6 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 1 and Piotski score of 6.
Description
Bombay Rayon Fashions Ltd was incorporated in 1992. It is mainly engaged in the business of manufacturing textiles consisting of yarn, fabrics and garments. The Company is also engaged in power generation through coal and windmills & manufacturing of buttons. [1] Site:BRFL Main Symbol:BRFL
Stock trades at 7.98, above its 50dma 7.88. It also trades above its 200dma 7.8. The stock remains bullish on techicals
The 52 week high is at 13.40 and the 52week low is at 5.60
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
-Stock is trading at 0.48 times its book value
Weakness
– has low interest coverage ratio.
-The company has delivered a poor sales growth of -51.87% over past five years.
-Promoter holding is low: 26.80%
– has a low return on equity of -57.39% for last 3 years.
-Contingent liabilities of Rs.271.02 Cr.
– might be capitalizing the interest cost
-Promoters have pledged 40.98% of their holding.
– has high debtors of 3774.36 days.
-Promoter holding has decreased over last 3 years: -9.19%
Competition
– The industry trades at a mean P/E of 28.8x. Jindal Worldwide trades at the industry’s max P/E of 70.86x. BRFL trades at a P/E of x
– Industry’s mean G-Factor is 2.4 while the mean Piotski score is 9.0. BRFL has a G-Factor of 1 and Piotski scoreof 6.
– Average 1 month return for industry is -6.7%. The max 1- month return was given by Jindal Worldwide: a return of 4.61 %
Quarterly Results
Sales for period ended Dec 2021 is Rs 19.0 cr compared to Rs 20.0 cr for period ended Dec 2020, a fall of 5.0%
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Company reported negative operating profit of Rs -66.0 cr for period ended Dec 2021. For same period last year, operating profit was -125.0.
The EPS for quarter ended Dec 2021 is Rs -10.17 compared to Rs -3.13 for previous quarter ended Sep 2021 and Rs -5.12 for Dec 2020.
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 86.0 cr for period ended TTM vis-vis sales of Rs 109.0 cr for the period ended Mar 2021, a fall of 26.7%. The 3 year sales cagr stood at -55.5%.
Operating margins shrank to -358.0% for period ended TTM vis-vis -344.0% for period ended Mar 2021, contraction of 1400.0 bps.
Net Profit reported at Rs 50.0 cr for period ended TTM vis-vis sales of Rs -105.0 cr for the period ended Mar 2021, rising 0%.
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 366.0 cr for period ended Mar 2021 vis-vis Rs -5.0 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 improved its Return on Equity (RoE) metric. The RoE on Last Year basis was -31.0% compared to -57.0% over the last 3 Years. – The stock has given a return of -20% on a 1 Year basis vis-vis a return of 6% over the last 3 Years. – The compounded sales growth on a TTM bassis is -53% vis-vis a compounded sales growth of -67% over the last 3 Years. – The compounded profit growth on a TTM basis is 73% vis-vis a compounded profit growth of 6% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Dec 2021 fii holding stood at 0.03% vis-vis 0.03% for Sep 2021 – Public shareholding has remained largely constant. The Dec 2021 public holding stood at 18.28% vis-vis 16.97% for Sep 2021
Conclusion
– has reduced debt.
-Stock is trading at 0.48 times its book value – has low interest coverage ratio.
-The company has delivered a poor sales growth of -51.87% over past five years.
-Promoter holding is low: 26.80%
– has a low return on equity of -57.39% for last 3 years.
-Contingent liabilities of Rs.271.02 Cr.
– might be capitalizing the interest cost
-Promoters have pledged 40.98% of their holding.
– has high debtors of 3774.36 days.
-Promoter holding has decreased over last 3 years: -9.19%
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 7.88 and is trading at 7.98 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
