Mehabe score: 2 G Factor: 3 Piotski Score: 7 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 7.
Description
Hilton Metal Forging is engaged in the Business of manufacturing of iron and steel forging, recognized export house, presently catering to the needs of Oil and Gas, Refineries and pharmaceutical industries.Site:HILTON
Market Cap:
Rs 15.3 cr
Price:
12.3
Trading pe:
x
Book-value:
41.4/share
Div yield:
0.00 %
Earning yield:
-26.90%
Face-value:
10.0/share
52week high:
16.25
52week low:
8.10
Technical Analysis
Stock trades at 12.3, above its 50dma 11.87. It also trades above its 200dma 11.19. The stock remains bullish on techicals
The 52 week high is at 16.25 and the 52week low is at 8.10
Price Chart
P/E Chart
Sales and Margin
Strengths
– Stock is trading at 0.30 times its book value
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 2.27% over past five years.
– has a low return on equity of 1.86% for last 3 years.
– might be capitalizing the interest cost
-Debtor days have increased from 97.44 to 118.76 days.
Competition
– The industry trades at a mean P/E of 42.5x. Bharat Forge trades at the industry’s max P/E of 446.04x. HILTON trades at a P/E of x
– Industry’s mean G-Factor is 2.6 while the mean Piotski score is 8.0. HILTON has a G-Factor of 3 and Piotski scoreof 7.
– Average 1 month return for industry is 11.6%. The max 1- month return was given by M M Forgings: a return of 44.07 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 14.51 cr compared to Rs 26.92 cr for period ended Mar 2020, a fall of 46.1%
Operating Profits reported at Rs 0.62 cr for period ended Mar 2021 vis-vis 0.94 for period ended Mar 2020 .
Operating Margins expanded 78.1 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs -2.34 compared to Rs -6.73 for previous quarter ended Dec 2020 and Rs -0.19 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 48.0 cr for period ended Mar 2021 vis-vis sales of Rs 103.0 cr for the period ended Mar 2020, a fall of 114.6%. The 3 year sales cagr stood at -20.4%.
Operating margins shrank to -36.0% for period ended Mar 2021 vis-vis 7.0% for period ended Mar 2020, contraction of 4300.0 bps.
Net Profit reported at Rs -20.0 cr for period ended Mar 2021 vis-vis sales of Rs 2.0 cr for the period ended Mar 2020, falling 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 had stable/constant Return on Equity (RoE) metric. The RoE on Last Year basis was 3.0% compared to 2.0% over the last 3 Years. – The stock has given a return of -1% on a 1 Year basis vis-vis a return of -19% over the last 3 Years. – The compounded sales growth on a TTM bassis is -44% vis-vis a compounded sales growth of 9% over the last 3 Years. – The compounded profit growth on a TTM basis is -758% vis-vis a compounded profit growth of 78% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Mar 2021 public holding stood at 49.65% vis-vis 49.65% for Dec 2020
Conclusion
– Stock is trading at 0.30 times its book value – 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 2.27% over past five years.
– has a low return on equity of 1.86% for last 3 years.
– might be capitalizing the interest cost
-Debtor days have increased from 97.44 to 118.76 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 11.87 and is trading at 12.3 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
