Mehabe score: 7 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
The Company was incorporated as Hindustan Twyfords Ltd. in 1960 by the Somany family (promoter group) and later expanded to glass bottles and containers manufacturing in 1972 by the acquisition of Associated Glass Industries Ltd.
The Company changed its name to Hindustan Sanitaryware & Industries Limited in 1969 and has since been popularly known as ‘HSIL’. In March 2009, the company name changed to HSIL Limited”. Site:HSIL Main Symbol:HSIL
Stock trades at 309.0, above its 50dma 245.52. It also trades above its 200dma 216.42. The stock remains bullish on techicals
The 52 week high is at 350.20 and the 52week low is at 131.00
Price Chart
P/E Chart
Sales and Margin
Strengths
– is expected to give good quarter
– has been maintaining a healthy dividend payout of 72.08%
Weakness
– The company has delivered a poor sales growth of -1.11% over past five years.
– has a low return on equity of 3.85% for last 3 years.
– might be capitalizing the interest cost
Competition
– The industry trades at a mean P/E of 14.2x. EPL Ltd trades at the industry’s max P/E of 24.99x. HSIL trades at a P/E of 18.1x
– Industry’s mean G-Factor is 4.9 while the mean Piotski score is 9.0. HSIL has a G-Factor of 3 and Piotski scoreof 7.
– Average 1 month return for industry is 10.4%. The max 1- month return was given by HSIL: a return of 44.64 %
Quarterly Results
Sales for period ended Dec 2021 is Rs 639.0 cr compared to Rs 541.0 cr for period ended Dec 2020, a rise of 18.1% .
vis-vis 95.0 for period ended Dec 2020 .
Operating Margins contracted -347.6 bps for period ended Dec 2021 vis-vis Dec 2020.
Company reported operating profit of Rs 90.0 cr for period ended Dec 2021 and operating profit margin at 14.1 % for same period.
The EPS for quarter ended Dec 2021 is Rs 4.4 compared to Rs 4.7 for previous quarter ended Sep 2021 and Rs 5.55 for Dec 2020.
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 2234.0 cr for period ended TTM vis-vis sales of Rs 1853.0 cr for the period ended Mar 2021, a healthy growth of 17.1%. The 3 year sales cagr stood at 11.7%.
Operating margins shrank to 14.0% for period ended TTM vis-vis 15.0% for period ended Mar 2021, contraction of 100.0 bps.
Net Profit reported at Rs 103.0 cr for period ended TTM vis-vis sales of Rs 88.0 cr for the period ended Mar 2021, rising 14.6%.
Company recorded a healthy Net Profit CAGR of 90.1% 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 349.0 cr for period ended Mar 2021 vis-vis Rs 107.0 cr for period ended Mar 2020
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The stock has given a return of 118% on a 1 Year basis vis-vis a return of 65% over the last 3 Years. – The compounded sales growth on a TTM bassis is 31% vis-vis a compounded sales growth of -6% over the last 3 Years. – The compounded profit growth on a TTM basis is 190% vis-vis a compounded profit growth of 4% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Dec 2021 fii holding stood at 7.24% vis-vis 7.14% for Sep 2021 – Public shareholding has remained largely constant. The Dec 2021 public holding stood at 29.88% vis-vis 29.59% for Sep 2021
Conclusion
– is expected to give good quarter
– has been maintaining a healthy dividend payout of 72.08% – The company has delivered a poor sales growth of -1.11% over past five years.
– has a low return on equity of 3.85% for last 3 years.
– 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 245.52 and is trading at 309.0 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
