Mehabe score: 4 G Factor: 3 Piotski Score: 4 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 4.
Description
Gujarat Alkalies & Chemicals is a multi-product chemical manufacturing Company, having various products in its basket and is one of the leading manufacturer of Caustic Soda Lye.Site:GUJALKALIMain Symbol:GUJALKALI
Stock trades at 800.0, above its 50dma 511.49. It also trades above its 200dma 430.31. The stock remains bullish on techicals
The 52 week high is at 749.00 and the 52week low is at 304.35
Price Chart
P/E Chart
Sales and Margin
Strengths
– is almost debt free.
-Stock is trading at 1.03 times its book value
– has been maintaining a healthy dividend payout of 20.55%
Weakness
– The company has delivered a poor sales growth of 4.01% over past five years.
– has a low return on equity of 8.81% for last 3 years.
Competition
– The industry trades at a mean P/E of 25.9x. Lords Chloro trades at the industry’s max P/E of 155.36x. GUJALKALI trades at a P/E of 28.6x
– Industry’s mean G-Factor is 3.1 while the mean Piotski score is 8.0. GUJALKALI has a G-Factor of 3 and Piotski scoreof 4.
– Average 1 month return for industry is 4.7%. The max 1- month return was given by Tuticorin Alkali: a return of 44.26 %
Quarterly Results
Sales for period ended Sep 2021 is Rs 826.0 cr compared to Rs 638.0 cr for period ended Sep 2020, a rise of 29.5%
Operating Profits reported at Rs 142.0 cr for period ended Sep 2021 vis-vis 104.0 for period ended Sep 2020 .
Operating Margins expanded 89.0 bps for period ended Sep 2021 vis-vis Sep 2020 .
The EPS for Sep 2021 was Rs 10.15 compared to Rs 8.6 for previous quarter ended Jun 2021 and Rs 8.99 for Sep 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 2864.0 cr for period ended TTM vis-vis sales of Rs 2429.0 cr for the period ended Mar 2021, a healthy growth of 15.2%. The 3 year sales cagr stood at -3.2%.
Net Profit reported at Rs 206.0 cr for period ended TTM vis-vis sales of Rs 166.0 cr for the period ended Mar 2021, rising 19.4%.
Company reported a poor Net Profit CAGR of -33.2% 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 worsened on its Return on Equity (RoE) metric. The RoE on Last Year basis was 3.0% compared to 9.0% over the last 3 Years. – The stock has given a return of 154% on a 1 Year basis vis-vis a return of 11% over the last 3 Years. – The compounded sales growth on a TTM bassis is 20% vis-vis a compounded sales growth of 0% over the last 3 Years. – The compounded profit growth on a TTM basis is 22% vis-vis a compounded profit growth of -31% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Sep 2021 fii holding stood at 1.48% vis-vis 1.36% for Jun 2021 – Public shareholding has remained largely constant. The Sep 2021 public holding stood at 50.58% vis-vis 49.97% for Jun 2021
Conclusion
– is almost debt free.
-Stock is trading at 1.03 times its book value
– has been maintaining a healthy dividend payout of 20.55% – The company has delivered a poor sales growth of 4.01% over past five years.
– has a low return on equity of 8.81% for 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 511.49 and is trading at 800.0 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
