Mehabe score: 5 G Factor: 2 Piotski Score: 8 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 2 and Piotski score of 8.
Description
Incorporated in 1958, Foseco India Limited is engaged in the manufacture of products used in the metallurgical industry which are in the nature of additives and consumables that improve the physical properties and performance of castings. [1] Site:FOSECOIND Main Symbol:FOSECOIND
Stock trades at 1467.0, above its 50dma 1391.19. It also trades above its 200dma 1406.81. The stock remains bullish on techicals
The 52 week high is at 1790.00 and the 52week low is at 1179.00
Price Chart
P/E Chart
Sales and Margin
Strengths
– is almost debt free.
– is expected to give good quarter
– has been maintaining a healthy dividend payout of 52.41%
Weakness
– The company has delivered a poor sales growth of -0.09% over past five years.
Competition
– The industry trades at a mean P/E of 30.1x. Linde India trades at the industry’s max P/E of 105.48x. FOSECOIND trades at a P/E of 28.8x
– Industry’s mean G-Factor is 2.6 while the mean Piotski score is 9.0. FOSECOIND has a G-Factor of 2 and Piotski scoreof 8.
– Average 1 month return for industry is 9.5%. The max 1- month return was given by Solar Industries: a return of 24.12 %
Quarterly Results
Sales for period ended Dec 2021 is Rs 87.46 cr compared to Rs 82.27 cr for period ended Dec 2020, a rise of 6.3% .
vis-vis 9.41 for period ended Dec 2020 .
Operating Margins expanded 191.7 bps for period ended Dec 2021 vis-vis Dec 2020.
Company reported operating profit of Rs 11.68 cr for period ended Dec 2021 and operating profit margin at 13.4 % for same period.
The EPS for quarter ended Dec 2021 is Rs 12.7 compared to Rs 14.06 for previous quarter ended Sep 2021 and Rs 11.26 for Dec 2020.
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 338.0 cr for period ended Dec 2021 vis-vis sales of Rs 251.0 cr for the period ended Dec 2020, a healthy growth of 25.7%. The 3 year sales cagr stood at -2.3%.
Operating margins expanded to 13.0% for period ended Dec 2021 vis-vis 8.0% for period ended Dec 2020, expansion of 500.0 bps.
Net Profit reported at Rs 33.0 cr for period ended Dec 2021 vis-vis sales of Rs 15.0 cr for the period ended Dec 2020, rising 54.5%.
Company recorded a Net Profit CAGR of 1.0% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
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 17.0% compared to 15.0% over the last 3 Years. – The stock has given a return of 23% on a 1 Year basis vis-vis a return of 0% over the last 3 Years. – The compounded sales growth on a TTM bassis is 35% vis-vis a compounded sales growth of -2% over the last 3 Years. – The compounded profit growth on a TTM basis is 111% vis-vis a compounded profit growth of 1% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Dec 2021 fii holding stood at 0.0% vis-vis 0.0% for Sep 2021 – Public shareholding has remained largely constant. The Dec 2021 public holding stood at 25.01% vis-vis 25.01% for Sep 2021
Conclusion
– is almost debt free.
– is expected to give good quarter
– has been maintaining a healthy dividend payout of 52.41% – The company has delivered a poor sales growth of -0.09% over past five years.
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 1391.19 and is trading at 1467.0 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
