Mehabe score: 6 G Factor: 5 Piotski Score: 6 The stock has a rating 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 5 and Piotski score of 6.
Description
Honda India Power Products Ltd is engaged in manufacturing and marketing of portable gensets, water pumps, general purpose engines, lawn mowers, brush cutters and tillers.#
Main Points
Product Portfolio
The company’s product portfolio includes a wide range of models of different products such as tillers#, water pumps#, generators#, lawn mowers#, general purpose engines# & brush cutters.#
The company’s 7.0 kVA generator has established good image in USA, Europe and other developed markets due to quality, performance and technology.Site:HONDAPOWERMain Symbol:HONDAPOWER
Stock trades at 1135.0, below its 50dma 1178.97. However it is trading above its 200dma 1085.99. The stock remains weak in the short term due to near term bearish momentum. However overall bullish structure remains intact. Price action will further build up as it moves above its dma50, currently situated at 1178.97.
The 52 week high is at 1388.30 and the 52week low is at 902.00
Price Chart
P/E Chart
Sales and Margin
Strengths
– is almost debt free.
– is expected to give good quarter
– has been maintaining a healthy dividend payout of 19.54%
Weakness
– The company has delivered a poor sales growth of 6.89% over past five years.
– has a low return on equity of 10.31% for last 3 years.
Competition
– The industry trades at a mean P/E of 26.7x. A B B trades at the industry’s max P/E of 118.55x. HONDAPOWER trades at a P/E of 15.2x
– Industry’s mean G-Factor is 3.5 while the mean Piotski score is 7.0. HONDAPOWER has a G-Factor of 5 and Piotski scoreof 6.
– Average 1 month return for industry is -0.8%. The max 1- month return was given by Havells India: a return of 19.59 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 264.0 cr compared to Rs 110.0 cr for period ended Jun 2020, a rise of 140.0%
Company reported operating profit of Rs 22.0 cr for period ended Jun 2021, operating profit margin at 8.3 %.
Operating profit was negative for the same period last year thus company has improved its margins this year
The EPS for Jun 2021 was Rs 19.53 compared to Rs 15.07 for previous quarter ended Mar 2021 and Rs -6.93 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 1093.0 cr for period ended TTM vis-vis sales of Rs 939.0 cr for the period ended Mar 2021, a healthy growth of 14.1%. The 3 year sales cagr stood at 10.2%.
Operating margins expanded to 9.0% for period ended TTM vis-vis 8.0% for period ended Mar 2021, expansion of 100.0 bps.
Net Profit reported at Rs 76.0 cr for period ended TTM vis-vis sales of Rs 49.0 cr for the period ended Mar 2021, rising 35.5%.
Company recorded a healthy Net Profit CAGR of 12.1% 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 152.0 cr for period ended Mar 2021 vis-vis Rs -18.0 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 8.0% compared to 10.0% over the last 3 Years. – The stock has given a return of 1% on a 1 Year basis vis-vis a return of -3% over the last 3 Years. – The compounded sales growth on a TTM bassis is 45% vis-vis a compounded sales growth of 7% over the last 3 Years. – The compounded profit growth on a TTM basis is 97% vis-vis a compounded profit growth of -7% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Jun 2021 fii holding stood at 0.34% vis-vis 1.01% for Mar 2021 – Public shareholding has remained largely constant. The Jun 2021 public holding stood at 21.05% vis-vis 21.04% for Mar 2021
Conclusion
– is almost debt free.
– is expected to give good quarter
– has been maintaining a healthy dividend payout of 19.54% – The company has delivered a poor sales growth of 6.89% over past five years.
– has a low return on equity of 10.31% for last 3 years.
The business fundamentals of the stock remain stable. Stronger near term results will build interest in the stock. We suggest to wait for a upturn in business performance.
Technically, the stock remains below its 50 DMA 1178.97 and is trading at 1135.0. Shows a near term lack of buying interest.
