Mehabe score: 7 G Factor: 3 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 3 and Piotski score of 6.
Description
Incorporated in 1981, KDDL manufactures watch components like dials, hands and precision engineering goods under the brand name, Eigen. [1] Site:KDDL Main Symbol:KDDL
Stock trades at 1028.0, above its 50dma 860.39. It also trades above its 200dma 575.1. The stock remains bullish on techicals
The 52 week high is at 1050.00 and the 52week low is at 226.89
Price Chart
P/E Chart
Sales and Margin
Strengths
– is expected to give good quarter
Weakness
– Stock is trading at 6.13 times its book value
-The company has delivered a poor sales growth of 4.06% over past five years.
– has a low return on equity of 5.08% for last 3 years.
Competition
– The industry trades at a mean P/E of 46.0x. Timex Group trades at the industry’s max P/E of 62.58x. KDDL trades at a P/E of 54.2x
– Industry’s mean G-Factor is 2.7 while the mean Piotski score is 6.0. KDDL has a G-Factor of 3 and Piotski scoreof 6.
– Average 1 month return for industry is 3.9%. The max 1- month return was given by KDDL Ltd: a return of 18.03 %
Quarterly Results
Sales for period ended Dec 2021 is Rs 258.0 cr compared to Rs 178.0 cr for period ended Dec 2020, a rise of 44.9% .
vis-vis 27.0 for period ended Dec 2020 .
Operating Margins contracted -44.0 bps for period ended Dec 2021 vis-vis Dec 2020.
Company reported operating profit of Rs 38.0 cr for period ended Dec 2021 and operating profit margin at 14.7 % for same period.
The EPS for quarter ended Dec 2021 is Rs 10.73 compared to Rs 4.71 for previous quarter ended Sep 2021 and Rs 6.12 for Dec 2020.
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 769.0 cr for period ended TTM vis-vis sales of Rs 549.0 cr for the period ended Mar 2021, a healthy growth of 28.6%. The 3 year sales cagr stood at 7.2%.
Operating margins expanded to 13.0% for period ended TTM vis-vis 12.0% for period ended Mar 2021, expansion of 100.0 bps.
Net Profit reported at Rs 30.0 cr for period ended TTM vis-vis sales of Rs 6.0 cr for the period ended Mar 2021, rising 80.0%.
Company recorded a healthy Net Profit CAGR of 10.9% 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 90.0 cr for period ended Mar 2021 vis-vis Rs 64.0 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 3.0% compared to 5.0% over the last 3 Years. – The stock has given a return of 337% on a 1 Year basis vis-vis a return of 31% over the last 3 Years. – The compounded sales growth on a TTM bassis is 29% vis-vis a compounded sales growth of 3% over the last 3 Years. – The compounded profit growth on a TTM basis is 340% vis-vis a compounded profit growth of -29% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Dec 2021 fii holding stood at 20.11% vis-vis 20.06% for Sep 2021 – Public shareholding has remained largely constant. The Dec 2021 public holding stood at 24.74% vis-vis 24.12% for Sep 2021
Conclusion
– is expected to give good quarter – Stock is trading at 6.13 times its book value
-The company has delivered a poor sales growth of 4.06% over past five years.
– has a low return on equity of 5.08% 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 860.39 and is trading at 1028.0 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
