Mehabe score: 6 G Factor: 2 Piotski Score: 9 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 9.
Description
Ganga Papers India is engaged in the business of manufacturing of Newsprint and Kraft papers, pulp and paper products. Site:GANGAPA Main Symbol:GANGAPA
Stock trades at 69.4, above its 50dma 19.42. It also trades above its 200dma 13.59. The stock remains bullish on techicals
The 52 week high is at 22.10 and the 52week low is at 2.48
Price Chart
P/E Chart
Sales and Margin
Strengths
– is expected to give good quarter
– has delivered good profit growth of 31.26% CAGR over last 5 years
Weakness
– Stock is trading at 3.43 times its book value
-Though the company is reporting repeated profits, it is not paying out dividend
– might be capitalizing the interest cost
-Earnings include an other income of Rs.4.97 Cr.
-Debtor days have increased from 53.11 to 68.97 days.
Competition
– The industry trades at a mean P/E of 15.3x. Century Textiles trades at the industry’s max P/E of 119.28x. GANGAPA trades at a P/E of 12.4x
– Industry’s mean G-Factor is 5.0 while the mean Piotski score is 6.0. GANGAPA has a G-Factor of 2 and Piotski scoreof 9.
– Average 1 month return for industry is -0.0%. The max 1- month return was given by Century Textiles: a return of 13.39 %
Quarterly Results
Sales for period ended Dec 2021 is Rs 73.08 cr compared to Rs 46.11 cr for period ended Dec 2020, a rise of 58.5% .
vis-vis 1.64 for period ended Dec 2020 .
Operating Margins contracted -68.3 bps for period ended Dec 2021 vis-vis Dec 2020.
Company reported operating profit of Rs 2.1 cr for period ended Dec 2021 and operating profit margin at 2.9 % for same period.
The EPS for quarter ended Dec 2021 is Rs 0.95 compared to Rs 0.62 for previous quarter ended Sep 2021 and Rs 1.04 for Dec 2020.
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 268.0 cr for period ended TTM vis-vis sales of Rs 177.0 cr for the period ended Mar 2021, a healthy growth of 34.0%. The 3 year sales cagr stood at 26.6%.
Operating margins shrank to 3.0% for period ended TTM vis-vis 5.0% for period ended Mar 2021, contraction of 200.0 bps.
Net Profit reported at Rs 6.0 cr for period ended TTM vis-vis sales of Rs 4.0 cr for the period ended Mar 2021, rising 33.3%.
Company recorded a healthy Net Profit CAGR of 44.2% 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 improved its Return on Equity (RoE) metric. The RoE on Last Year basis was 24.0% compared to 18.0% over the last 3 Years. – The stock has given a return of 97% 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 78% vis-vis a compounded sales growth of 20% over the last 3 Years. – The compounded profit growth on a TTM basis is 222% vis-vis a compounded profit growth of 37% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Sep 2021 public holding stood at 24.77% vis-vis 24.77% for Jun 2021
Conclusion
– is expected to give good quarter
– has delivered good profit growth of 31.26% CAGR over last 5 years – Stock is trading at 3.43 times its book value
-Though the company is reporting repeated profits, it is not paying out dividend
– might be capitalizing the interest cost
-Earnings include an other income of Rs.4.97 Cr.
-Debtor days have increased from 53.11 to 68.97 days.
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 19.42 and is trading at 69.4 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
