Mehabe score: 5 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
Esab India is engaged in the business of fabrication technology.Site:ESABINDIAMain Symbol:ESABINDIA
Stock trades at 1896.0, above its 50dma 1843.14. It also trades above its 200dma 1718.15. The stock remains bullish on techicals
The 52 week high is at 2150.00 and the 52week low is at 1290.00
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
– is almost debt free.
– has been maintaining a healthy dividend payout of 168.53%
Weakness
– Stock is trading at 11.26 times its book value
-The company has delivered a poor sales growth of 8.60% over past five years.
-Debtor days have increased from 43.92 to 52.95 days.
Competition
– The industry trades at a mean P/E of 35.4x. Ador Welding trades at the industry’s max P/E of 74.5x. ESABINDIA trades at a P/E of 49.2x
– Industry’s mean G-Factor is 4.0 while the mean Piotski score is 7.0. ESABINDIA has a G-Factor of 5 and Piotski scoreof 5.
– Average 1 month return for industry is 23.7%. The max 1- month return was given by GEE: a return of 65.51 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 207.0 cr compared to Rs 175.0 cr for period ended Mar 2020, a rise of 18.3%
Operating Profits reported at Rs 29.0 cr for period ended Mar 2021 vis-vis 25.0 for period ended Mar 2020 .
Operating Margins contracted -27.6 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 12.81 compared to Rs 9.56 for previous quarter ended Dec 2020 and Rs 11.74 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 681.0 cr for period ended Mar 2021 vis-vis sales of Rs 698.0 cr for the period ended Mar 2020, a fall of 2.5%. The 3 year sales cagr stood at 7.8%.
Operating margins shrank to 12.0% for period ended Mar 2021 vis-vis 14.0% for period ended Mar 2020, contraction of 200.0 bps.
Net Profit reported at Rs 59.0 cr for period ended Mar 2021 vis-vis sales of Rs 71.0 cr for the period ended Mar 2020, falling 20.3%.
Company recorded a healthy Net Profit CAGR of 16.8% 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 72.0 cr for period ended Mar 2021 vis-vis Rs 57.0 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 20.0% compared to 20.0% over the last 3 Years. – The stock has given a return of 38% on a 1 Year basis vis-vis a return of 46% over the last 3 Years. – The compounded sales growth on a TTM bassis is -2% vis-vis a compounded sales growth of 8% over the last 3 Years. – The compounded profit growth on a TTM basis is -16% vis-vis a compounded profit growth of 15% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Jun 2021 fii holding stood at 3.79% vis-vis 3.84% for Mar 2021 – Public shareholding has remained largely constant. The Jun 2021 public holding stood at 12.1% vis-vis 11.98% for Mar 2021
Conclusion
– has reduced debt.
– is almost debt free.
– has been maintaining a healthy dividend payout of 168.53% – Stock is trading at 11.26 times its book value
-The company has delivered a poor sales growth of 8.60% over past five years.
-Debtor days have increased from 43.92 to 52.95 days.
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 1843.14 and is trading at 1896.0, thus bullish price action wise.
