Mehabe score: 4 G Factor: 3 Piotski Score: 5 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 3 and Piotski score of 5.
Description
Gujarat Sidhee Cement Ltd is engaged in the business of cement under the brand name ‘Sidhee’.
It was incorporated in 1973, as a wholly owned subsidiary of Gujarat Industrial Investment Corporation and was later joined by Mehta Group.[1] Site:GSCLCEMENT Main Symbol:GSCLCEMENT
Stock trades at 48.0, above its 50dma 46.14. It also trades above its 200dma 44.66. The stock remains bullish on techicals
The 52 week high is at 62.60 and the 52week low is at 28.65
Price Chart
P/E Chart
Sales and Margin
Strengths
– is almost debt free.
-Stock is trading at 0.84 times its book value
– is expected to give good quarter
Weakness
– The company has delivered a poor sales growth of 3.82% over past five years.
– has a low return on equity of 5.45% for last 3 years.
-Dividend payout has been low at 6.88% of profits over last 3 years
Competition
– The industry trades at a mean P/E of 14.6x. J K Cements trades at the industry’s max P/E of 36.74x. GSCLCEMENT trades at a P/E of 13.2x
– Industry’s mean G-Factor is 3.0 while the mean Piotski score is 9.0. GSCLCEMENT has a G-Factor of 3 and Piotski scoreof 5.
– Average 1 month return for industry is -1.7%. The max 1- month return was given by Guj. Sidhee Cem.: a return of 8.83 %
Quarterly Results
Sales for period ended Dec 2021 is Rs 178.17 cr compared to Rs 154.04 cr for period ended Dec 2020, a rise of 15.7% .
vis-vis 1.61 for period ended Dec 2020 .
Operating Margins expanded 514.6 bps for period ended Dec 2021 vis-vis Dec 2020.
Company reported operating profit of Rs 11.03 cr for period ended Dec 2021 and operating profit margin at 6.2 % for same period.
The EPS for quarter ended Dec 2021 is Rs 0.58 compared to Rs -0.01 for previous quarter ended Sep 2021 and Rs -0.01 for Dec 2020.
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 695.0 cr for period ended TTM vis-vis sales of Rs 566.0 cr for the period ended Mar 2021, a healthy growth of 18.6%. The 3 year sales cagr stood at 7.3%.
Operating margins shrank to 9.0% for period ended TTM vis-vis 10.0% for period ended Mar 2021, contraction of 100.0 bps.
Net Profit reported at Rs 38.0 cr for period ended TTM vis-vis sales of Rs 29.0 cr for the period ended Mar 2021, rising 0%.
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 7.0% compared to 5.0% over the last 3 Years. – The stock has given a return of 30% on a 1 Year basis vis-vis a return of 31% over the last 3 Years. – The compounded sales growth on a TTM bassis is 26% vis-vis a compounded sales growth of 2% over the last 3 Years. – The compounded profit growth on a TTM basis is 6% vis-vis a compounded profit growth of -4% 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 30.38% vis-vis 30.2% for Sep 2021
Conclusion
– is almost debt free.
-Stock is trading at 0.84 times its book value
– is expected to give good quarter – The company has delivered a poor sales growth of 3.82% over past five years.
– has a low return on equity of 5.45% for last 3 years.
-Dividend payout has been low at 6.88% of profits over last 3 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 46.14 and is trading at 48.0 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
