Mehabe score: 4 G Factor: 5 Piotski Score: 7 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 7.
Description
Indo Rama Synthetics (India) is a manufacturer of polyester filament yarn (PFY), polyester staple fibre (PSF), draw texturised yarn (DTY), specialty fiber and chips. The Company is also engaged in trading of spun yarn, and also engaged in power generation, which is used primarily for captive consumption.Site:INDORAMAMain Symbol:INDORAMA
Stock trades at 57.9, above its 50dma 51.86. It also trades above its 200dma 40.04. The stock remains bullish on techicals
The 52 week high is at 62.95 and the 52week low is at 13.65
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
Weakness
– Stock is trading at 4.54 times its book value
– has low interest coverage ratio.
-The company has delivered a poor sales growth of -4.34% over past five years.
– has a low return on equity of -41.36% for last 3 years.
-‘s cost of borrowing seems high
Competition
– The industry trades at a mean P/E of 17.8x. SRF trades at the industry’s max P/E of 38.56x. INDORAMA trades at a P/E of 12.2x
– Industry’s mean G-Factor is 5.0 while the mean Piotski score is 7.0. INDORAMA has a G-Factor of 5 and Piotski scoreof 7.
– Average 1 month return for industry is 13.6%. The max 1- month return was given by JBF Industries: a return of 35.13 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 814.0 cr compared to Rs 462.0 cr for period ended Mar 2020, a rise of 76.2%
Company reported operating profit of Rs 101.0 cr for period ended Mar 2021, operating profit margin at 12.4 %.
Operating profit was negative for the same period last year thus company has improved its margins this year
The EPS for Mar 2021 was Rs 4.91 compared to Rs 2.92 for previous quarter ended Dec 2020 and Rs -1.91 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 2023.0 cr for period ended Mar 2021 vis-vis sales of Rs 2121.0 cr for the period ended Mar 2020, a fall of 4.8%. The 3 year sales cagr stood at -3.4%.
Net Profit reported at Rs 113.0 cr for period ended Mar 2021 vis-vis sales of Rs -316.0 cr for the period ended Mar 2020, rising 0%.
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 181.0 cr for period ended Mar 2021 vis-vis Rs -118.0 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 improved its Return on Equity (RoE) metric. The RoE on Last Year basis was 45.0% compared to -41.0% over the last 3 Years. – The stock has given a return of 259% on a 1 Year basis vis-vis a return of 39% over the last 3 Years. – The compounded sales growth on a TTM bassis is -5% vis-vis a compounded sales growth of -3% over the last 3 Years. – The compounded profit growth on a TTM basis is 139% vis-vis a compounded profit growth of 54% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Jun 2021 public holding stood at 20.08% vis-vis 20.09% for Mar 2021
Conclusion
– has reduced debt. – Stock is trading at 4.54 times its book value
– has low interest coverage ratio.
-The company has delivered a poor sales growth of -4.34% over past five years.
– has a low return on equity of -41.36% for last 3 years.
-‘s cost of borrowing seems high
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 above its 50 DMA 51.86 and is trading at 57.9, thus bullish price action wise.
