Mehabe score: 2 G Factor: 3 Piotski Score: 6 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 3 and Piotski score of 6.
Description
Chemcon Speciality Chemicals Limited is a manufacturer of specialised chemicals, such as HMDS and CMIC which are predominantly used in the pharmaceuticals industry and inorganic bromides used as completion fluids in the oilfield industry. [1] Site:CHEMCON Main Symbol:CHEMCON
Stock trades at 363.0, below its 50dma 370.39 and below its 200dma 416.18. The stock remains bearish on technicals
The 52 week high is at 569.40 and the 52week low is at 330.30
Price Chart
P/E Chart
Sales and Margin
Strengths
– has delivered good profit growth of 76.77% CAGR over last 5 years
– has a good return on equity (ROE) track record: 3 Years ROE 33.20%
Weakness
– Though the company is reporting repeated profits, it is not paying out dividend
-Debtor days have increased from 114.37 to 142.06 days.
Competition
– The industry trades at a mean P/E of 27.4x. Clean Science trades at the industry’s max P/E of 111.81x. CHEMCON trades at a P/E of 22.2x
– Industry’s mean G-Factor is 2.9 while the mean Piotski score is 8.0. CHEMCON has a G-Factor of 3 and Piotski scoreof 6.
– Average 1 month return for industry is -2.9%. The max 1- month return was given by Gujarat Fluoroch: a return of 13.18 %
Quarterly Results
Sales for period ended Dec 2021 is Rs 50.0 cr compared to Rs 65.0 cr for period ended Dec 2020, a fall of 23.1%
.
vis-vis 23.0 for period ended Dec 2020 .
Operating Margins contracted -138.5 bps for period ended Dec 2021 vis-vis Dec 2020.
Company reported operating profit of Rs 17.0 cr for period ended Dec 2021 and operating profit margin at 34.0 % for same period.
The EPS for quarter ended Dec 2021 is Rs 3.68 compared to Rs 3.98 for previous quarter ended Sep 2021 and Rs 4.5 for Dec 2020.
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 239.0 cr for period ended TTM vis-vis sales of Rs 243.0 cr for the period ended Mar 2021, a fall of 1.7%. The 3 year sales cagr stood at -7.6%.
Operating margins shrank to 31.0% for period ended TTM vis-vis 33.0% for period ended Mar 2021, contraction of 200.0 bps.
Net Profit reported at Rs 57.0 cr for period ended TTM vis-vis sales of Rs 56.0 cr for the period ended Mar 2021, rising 1.8%.
Company recorded a Net Profit CAGR of 9.9% 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 65.0 cr for period ended Mar 2021 vis-vis Rs 12.0 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 worsened on its Return on Equity (RoE) metric. The RoE on Last Year basis was 23.0% compared to 33.0% over the last 3 Years. – The stock has given a return of -17% on a 1 Year basis vis-vis a return of % over the last 3 Years. – The compounded sales growth on a TTM bassis is 19% vis-vis a compounded sales growth of 16% over the last 3 Years. – The compounded profit growth on a TTM basis is 38% vis-vis a compounded profit growth of 29% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Dec 2021 fii holding stood at 0.02% vis-vis 0.09% for Sep 2021 – Public shareholding has remained largely constant. The Dec 2021 public holding stood at 24.83% vis-vis 24.41% for Sep 2021
Conclusion
– has delivered good profit growth of 76.77% CAGR over last 5 years
– has a good return on equity (ROE) track record: 3 Years ROE 33.20% – Though the company is reporting repeated profits, it is not paying out dividend
-Debtor days have increased from 114.37 to 142.06 days.
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 370.39 and is trading at 363.0. 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
