Mehabe score: 3 G Factor: 3 Piotski Score: 8 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 8.
Description
Kesar Enterprises ia deals in the production of Sugar, Spirits & Bagasse based Power.Site:KESARENT
Market Cap:
Rs 117 cr
Price:
116.0
Trading pe:
16.0x
Book-value:
36.1/share
Div yield:
0.00 %
Earning yield:
9.63%
Face-value:
10.0/share
52week high:
128.00
52week low:
25.80
Technical Analysis
Stock trades at 116.0, above its 50dma 31.74. It also trades above its 200dma 32.91. The stock remains bullish on techicals
The 52 week high is at 128.00 and the 52week low is at 25.80
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
Weakness
– Stock is trading at 3.20 times its book value
– has low interest coverage ratio.
-The company has delivered a poor sales growth of 3.45% over past five years.
– has a low return on equity of -32.22% for last 3 years.
-Contingent liabilities of Rs.66.53 Cr.
-‘s cost of borrowing seems high
Competition
– The industry trades at a mean P/E of 16.2x. Sh.Renuka Sugar trades at the industry’s max P/E of 25.4x. KESARENT trades at a P/E of 16.0x
– Industry’s mean G-Factor is 4.0 while the mean Piotski score is 8.0. KESARENT has a G-Factor of 3 and Piotski scoreof 8.
– Average 1 month return for industry is 43.4%. The max 1- month return was given by Sh.Renuka Sugar: a return of 160.6 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 206.0 cr compared to Rs 184.0 cr for period ended Mar 2020, a rise of 12.0%
Operating Profits reported at Rs 28.0 cr for period ended Mar 2021 vis-vis 31.0 for period ended Mar 2020 .
Operating Margins contracted -325.6 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 118.48 compared to Rs -11.7 for previous quarter ended Dec 2020 and Rs 36.61 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 547.0 cr for period ended Mar 2021 vis-vis sales of Rs 518.0 cr for the period ended Mar 2020, a growth of 5.3%. The 3 year sales cagr stood at 20.5%.
Operating margins shrank to 5.0% for period ended Mar 2021 vis-vis 8.0% for period ended Mar 2020, contraction of 300.0 bps.
Net Profit reported at Rs 90.0 cr for period ended Mar 2021 vis-vis sales of Rs 2.0 cr for the period ended Mar 2020, rising 0%.
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
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 3.0% compared to -32.0% over the last 3 Years. – The stock has given a return of 311% on a 1 Year basis vis-vis a return of 59% over the last 3 Years. – The compounded sales growth on a TTM bassis is 5% vis-vis a compounded sales growth of 12% over the last 3 Years. – The compounded profit growth on a TTM basis is 135% vis-vis a compounded profit growth of -35% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Mar 2021 public holding stood at 25.39% vis-vis 25.19% for Dec 2020
Conclusion
– has reduced debt. – Stock is trading at 3.20 times its book value
– has low interest coverage ratio.
-The company has delivered a poor sales growth of 3.45% over past five years.
– has a low return on equity of -32.22% for last 3 years.
-Contingent liabilities of Rs.66.53 Cr.
-‘s cost of borrowing seems high
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 31.74 and is trading at 116.0 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
