Mehabe score: 2 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
The Hi-Tech Gears is an auto component manufacturer (a Tier 1 supplier).Site:HITECHGEAR
Market Cap:
Rs 487 cr
Price:
260.0
Trading pe:
x
Book-value:
147/share
Div yield:
0.58 %
Earning yield:
5.01%
Face-value:
10.0/share
52week high:
274.90
52week low:
95.45
Technical Analysis
Stock trades at 260.0, above its 50dma 217.7. It also trades above its 200dma 178.6. The stock remains bullish on techicals
The 52 week high is at 274.90 and the 52week low is at 95.45
Price Chart
P/E Chart
Sales and Margin
Strengths
– has been maintaining a healthy dividend payout of 23.88%
-Debtor days have improved from 62.86 to 46.11 days.
Weakness
– has low interest coverage ratio.
– has a low return on equity of 9.67% for last 3 years.
Competition
– The industry trades at a mean P/E of 31.3x. WABCO India trades at the industry’s max P/E of 124.59x. HITECHGEAR trades at a P/E of x
– Industry’s mean G-Factor is 3.9 while the mean Piotski score is 7.0. HITECHGEAR has a G-Factor of 3 and Piotski scoreof 5.
– Average 1 month return for industry is 1.4%. The max 1- month return was given by Minda Industries: a return of 7.15 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 250.0 cr compared to Rs 161.0 cr for period ended Mar 2020, a rise of 55.3%
Operating Profits reported at Rs 41.0 cr for period ended Mar 2021 vis-vis 16.0 for period ended Mar 2020 .
Operating Margins expanded 646.2 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 15.31 compared to Rs 2.2 for previous quarter ended Dec 2020 and Rs -2.75 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 746.0 cr for period ended Mar 2021 vis-vis sales of Rs 722.0 cr for the period ended Mar 2020, a growth of 3.2%. The 3 year sales cagr stood at -0.1%.
Net Profit reported at Rs 29.0 cr for period ended Mar 2021 vis-vis sales of Rs 8.0 cr for the period ended Mar 2020, rising 72.4%.
Company reported a poor Net Profit CAGR of -5.2% over the last 3 years
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 3.0% compared to 10.0% over the last 3 Years. – The stock has given a return of 132% on a 1 Year basis vis-vis a return of -15% over the last 3 Years. – The compounded sales growth on a TTM bassis is -18% vis-vis a compounded sales growth of 15% over the last 3 Years. – The compounded profit growth on a TTM basis is -122% vis-vis a compounded profit growth of -25% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Mar 2021 public holding stood at 43.99% vis-vis 44.29% for Dec 2020
Conclusion
– has been maintaining a healthy dividend payout of 23.88%
-Debtor days have improved from 62.86 to 46.11 days. – has low interest coverage ratio.
– has a low return on equity of 9.67% 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 217.7 and is trading at 260.0 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
