Mehabe score: 6 G Factor: 3 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 3 and Piotski score of 9.
Description
Hester Biosciences Ltd is one of the leading animal health care companies & the second largest poultry vaccine manufacturer in India. Founded by Mr. Rajiv Gandhi in 1987, it has now a presence in over 30 countries & has a key market in India, Nepal & Tanzania
Partners with Bill & Melinda Gates Foundation, GALVmed, Golchha Organisation, Novapharma, etc.
Also, provides services like seroprofiling kits and diagnostic labs for poultry flocks, and mastitis control programs for cattle. Site:HESTERBIO Main Symbol:HESTERBIO
Stock trades at 2468.0, above its 50dma 2444.97. It also trades above its 200dma 2344.74. The stock remains bullish on techicals
The 52 week high is at 3180.00 and the 52week low is at 1651.00
Price Chart
P/E Chart
Sales and Margin
Strengths
– is expected to give good quarter
– has been maintaining a healthy dividend payout of 22.16%
Weakness
– Stock is trading at 8.55 times its book value
– might be capitalizing the interest cost
Competition
– The industry trades at a mean P/E of 26.2x. Syncom Formul. trades at the industry’s max P/E of 45.42x. HESTERBIO trades at a P/E of 44.5x
– Industry’s mean G-Factor is 3.0 while the mean Piotski score is 9.0. HESTERBIO has a G-Factor of 3 and Piotski scoreof 9.
– Average 1 month return for industry is -3.7%. The max 1- month return was given by Syncom Formul.: a return of 10.71 %
Quarterly Results
Sales for period ended Sep 2021 is Rs 63.0 cr compared to Rs 53.0 cr for period ended Sep 2020, a rise of 18.9% .
vis-vis 16.0 for period ended Sep 2020 .
Operating Margins contracted -161.7 bps for period ended Sep 2021 vis-vis Sep 2020.
Company reported operating profit of Rs 18.0 cr for period ended Sep 2021 and operating profit margin at 28.6 % for same period.
The EPS for quarter ended Sep 2021 is Rs 12.48 compared to Rs 14.68 for previous quarter ended Jun 2021 and Rs 7.85 for Sep 2020.
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 244.0 cr for period ended TTM vis-vis sales of Rs 214.0 cr for the period ended Mar 2021, a healthy growth of 12.3%. The 3 year sales cagr stood at 11.1%.
Operating margins shrank to 31.0% for period ended TTM vis-vis 32.0% for period ended Mar 2021, contraction of 100.0 bps.
Net Profit reported at Rs 45.0 cr for period ended TTM vis-vis sales of Rs 34.0 cr for the period ended Mar 2021, rising 24.4%.
Company recorded a Net Profit CAGR of 2.3% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 58.0 cr for period ended Mar 2021 vis-vis Rs 37.0 cr for period ended Mar 2020
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 19.0% over the last 3 Years. – The stock has given a return of 42% on a 1 Year basis vis-vis a return of 24% over the last 3 Years. – The compounded sales growth on a TTM bassis is 30% vis-vis a compounded sales growth of 16% over the last 3 Years. – The compounded profit growth on a TTM basis is 77% vis-vis a compounded profit growth of 13% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Dec 2021 fii holding stood at 0.8% vis-vis 0.68% for Sep 2021 – Public shareholding has remained largely constant. The Dec 2021 public holding stood at 45.45% vis-vis 45.58% for Sep 2021
Conclusion
– is expected to give good quarter
– has been maintaining a healthy dividend payout of 22.16% – Stock is trading at 8.55 times its book value
– might be capitalizing the interest cost
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 2444.97 and is trading at 2468.0 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
