Mehabe score: 8 G Factor: 5 Piotski Score: 6 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 6.
Description
Electrosteel Castings is engaged in the manufacture and supply of Ductile Iron (DI) Pipes, Ductile Iron Fittings (DIF) and Cast iron (CI) Pipes as its core business and produces and supplies Pig Iron, in the process. It also produces Metallurgic Coke, Sinter and Power for captive consumption. The company caters to the needs of Water Infrastructure Development. Site:ELECTCAST Main Symbol:ELECTCAST
Stock trades at 39.4, above its 50dma 38.47. It also trades above its 200dma 34.63. The stock remains bullish on techicals
The 52 week high is at 48.00 and the 52week low is at 21.60
Price Chart
P/E Chart
Sales and Margin
Strengths
– Stock is trading at 0.80 times its book value
– is expected to give good quarter
Weakness
– has a low return on equity of 2.65% for last 3 years.
Competition
– The industry trades at a mean P/E of 19.8x. Sona BLW Precis. trades at the industry’s max P/E of 128.07x. ELECTCAST trades at a P/E of 12.3x
– Industry’s mean G-Factor is 2.9 while the mean Piotski score is 7.0. ELECTCAST has a G-Factor of 5 and Piotski scoreof 6.
– Average 1 month return for industry is -9.6%. The max 1- month return was given by Electrost.Cast.: a return of 2.2 %
Quarterly Results
Sales for period ended Sep 2021 is Rs 1165.0 cr compared to Rs 750.0 cr for period ended Sep 2020, a rise of 55.3% .
vis-vis 86.0 for period ended Sep 2020 .
Operating Margins contracted -13.6 bps for period ended Sep 2021 vis-vis Sep 2020.
Company reported operating profit of Rs 132.0 cr for period ended Sep 2021 and operating profit margin at 11.3 % for same period.
The EPS for quarter ended Sep 2021 is Rs 1.05 compared to Rs 1.05 for previous quarter ended Jun 2021 and Rs -4.8 for Sep 2020.
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 4653.0 cr for period ended TTM vis-vis sales of Rs 3471.0 cr for the period ended Mar 2021, a healthy growth of 25.4%. The 3 year sales cagr stood at 19.9%.
Operating margins expanded to 14.0% for period ended TTM vis-vis 12.0% for period ended Mar 2021, expansion of 200.0 bps.
Net Profit reported at Rs 191.0 cr for period ended TTM vis-vis sales of Rs -146.0 cr for the period ended Mar 2021, rising 176.4%.
Company recorded a healthy Net Profit CAGR of 71.3% 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 465.0 cr for period ended Mar 2021 vis-vis Rs 225.0 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 -5.0% compared to 3.0% over the last 3 Years. – The stock has given a return of 74% on a 1 Year basis vis-vis a return of 28% over the last 3 Years. – The compounded sales growth on a TTM bassis is 87% vis-vis a compounded sales growth of 15% over the last 3 Years. – The compounded profit growth on a TTM basis is 228% vis-vis a compounded profit growth of % over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Dec 2021 fii holding stood at 11.34% vis-vis 11.22% for Sep 2021 – Public shareholding has remained largely constant. The Dec 2021 public holding stood at 30.72% vis-vis 30.5% for Sep 2021
Conclusion
– Stock is trading at 0.80 times its book value
– is expected to give good quarter – has a low return on equity of 2.65% for last 3 years.
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 38.47 and is trading at 39.4, thus bullish price action wise.
