Mehabe score: 4 G Factor: 2 Piotski Score: 6 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 2 and Piotski score of 6.
Description
Insecticides India is into manufacturing of agrochemicals (technicals and formulations) and biological and household products. They cater to Indian market where they directly sell to the end consumer and also sell technicals and formulations to the companies who are in the business of formulation. They also export to 30 countries with more than 100 customers through registrations. IIL has more than 75 registrations so far.
Main Points
Revenue Mix
Insecticides: 59% of sales in FY 20 vs 64% in FY15
Herbicides: 29% of sales in FY 20 vs 23% in FY15
Fungicides: 10% of sales in FY 20 vs 10% in FY15
PGR/Biologicals: 2% of sales in FY 20 vs 2.4% in FY15 # #Site:INSECTICID
Market Cap:
Rs 1,525 cr
Price:
747.0
Trading pe:
21.0x
Book-value:
391/share
Div yield:
0.54 %
Earning yield:
6.78%
Face-value:
10.0/share
52week high:
808.85
52week low:
393.00
Technical Analysis
Stock trades at 747.0, above its 50dma 556.38. It also trades above its 200dma 496.55. The stock remains bullish on techicals
The 52 week high is at 808.85 and the 52week low is at 393.00
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
– is almost debt free.
Weakness
– The company has delivered a poor sales growth of 8.82% over past five years.
-Dividend payout has been low at 5.93% of profits over last 3 years
Competition
– The industry trades at a mean P/E of 31.2x. P I Industries trades at the industry’s max P/E of 58.77x. INSECTICID trades at a P/E of 21.0x
– Industry’s mean G-Factor is 3.8 while the mean Piotski score is 9.0. INSECTICID has a G-Factor of 2 and Piotski scoreof 6.
– Average 1 month return for industry is 12.8%. The max 1- month return was given by Insecticid.India: a return of 38.41 %
Quarterly Results
Sales for period ended Dec 2020 is Rs 299.17 cr compared to Rs 262.86 cr for period ended Dec 2019, a rise of 13.8%
Operating Profits reported at Rs 15.07 cr for period ended Dec 2020 vis-vis 22.96 for period ended Dec 2019 .
Operating Margins contracted -369.7 bps for period ended Dec 2020 vis-vis Dec 2019 .
The EPS for Dec 2020 was Rs 2.98 compared to Rs 20.13 for previous quarter ended Sep 2020 and Rs 4.31 for Dec 2019
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 1403.0 cr for period ended TTM vis-vis sales of Rs 1363.0 cr for the period ended Mar 2020, a growth of 2.9%. The 3 year sales cagr stood at 9.4%.
Operating margins shrank to 9.0% for period ended TTM vis-vis 11.0% for period ended Mar 2020, contraction of 200.0 bps.
Net Profit reported at Rs 65.0 cr for period ended TTM vis-vis sales of Rs 87.0 cr for the period ended Mar 2020, falling 33.8%.
Company reported a poor Net Profit CAGR of -8.2% 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 242.0 cr for period ended Mar 2020 vis-vis Rs -133.0 cr for period ended Mar 2019
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The stock has given a return of 47% on a 1 Year basis vis-vis a return of 1% over the last 3 Years. – The compounded sales growth on a TTM bassis is 6% vis-vis a compounded sales growth of 11% over the last 3 Years. – The compounded profit growth on a TTM basis is -41% vis-vis a compounded profit growth of 13% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2021 fii holding stood at 4.74% vis-vis 4.34% for Dec 2020 – Public shareholding has remained largely constant. The Mar 2021 public holding stood at 16.49% vis-vis 14.82% for Dec 2020
Conclusion
– has reduced debt.
– is almost debt free. – The company has delivered a poor sales growth of 8.82% over past five years.
-Dividend payout has been low at 5.93% of profits over 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 556.38 and is trading at 747.0 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
