Mehabe score: 2 G Factor: 1 Piotski Score: 4 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 1 and Piotski score of 4.
Description
Globe Textiles (India) is primarily involved in trading and manufacturing of textile products.(Source : 201903 Annual Report Page No: 58) Site:GLOBE Main Symbol:GLOBE
Stock trades at 14.0, below its 50dma 14.55. However it is trading above its 200dma 11.47. The stock remains weak in the short term due to near term bearish momentum. However overall bullish structure remains intact. Price action will further build up as it moves above its dma50, currently situated at 14.55.
The 52 week high is at 19.20 and the 52week low is at 2.84
Price Chart
P/E Chart
Sales and Margin
Strengths
– is expected to give good quarter
Weakness
– Though the company is reporting repeated profits, it is not paying out dividend
– has low interest coverage ratio.
-The company has delivered a poor sales growth of 7.26% over past five years.
– has a low return on equity of 5.87% for last 3 years.
– has high debtors of 157.26 days.
Competition
– The industry trades at a mean P/E of 29.1x. Raymond trades at the industry’s max P/E of 270.44x. GLOBE trades at a P/E of 53.8x
– Industry’s mean G-Factor is 2.1 while the mean Piotski score is 9.0. GLOBE has a G-Factor of 1 and Piotski scoreof 4.
– Average 1 month return for industry is 9.8%. The max 1- month return was given by Jindal Worldwide: a return of 55.85 %
Quarterly Results
Sales for period ended Dec 2021 is Rs 107.14 cr compared to Rs 97.81 cr for period ended Dec 2020, a rise of 9.5% .
vis-vis 2.96 for period ended Dec 2020 .
Operating Margins expanded 88.4 bps for period ended Dec 2021 vis-vis Dec 2020.
Company reported operating profit of Rs 4.19 cr for period ended Dec 2021 and operating profit margin at 3.9 % for same period.
The EPS for quarter ended Dec 2021 is Rs 0.27 compared to Rs 0.18 for previous quarter ended Sep 2021 and Rs 0.12 for Dec 2020.
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 337.0 cr for period ended TTM vis-vis sales of Rs 259.0 cr for the period ended Mar 2021, a healthy growth of 23.1%. The 3 year sales cagr stood at 9.5%.
Operating margins expanded to 4.0% for period ended TTM vis-vis 2.0% for period ended Mar 2021, expansion of 200.0 bps.
Net Profit reported at Rs 4.0 cr for period ended TTM vis-vis sales of Rs 0.0 cr for the period ended Mar 2021, rising 100.0%.
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
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 1.0% compared to 6.0% over the last 3 Years. – The stock has given a return of 239% on a 1 Year basis vis-vis a return of 93% over the last 3 Years. – The compounded sales growth on a TTM bassis is 29% vis-vis a compounded sales growth of 2% over the last 3 Years. – The compounded profit growth on a TTM basis is 793% vis-vis a compounded profit growth of -58% over the last 3 Years.
Ratios
Conclusion
– is expected to give good quarter – Though the company is reporting repeated profits, it is not paying out dividend
– has low interest coverage ratio.
-The company has delivered a poor sales growth of 7.26% over past five years.
– has a low return on equity of 5.87% for last 3 years.
– has high debtors of 157.26 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 14.55 and is trading at 14.0. 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
