Mehabe score: 4 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
Lloyds Steels Industries is engaged in the business of Manufacturing of Engineering Equipments.Site:LSIL
Market Cap:
Rs 297 cr
Price:
3.3
Trading pe:
593.0x
Book-value:
1.26/share
Div yield:
0.00 %
Earning yield:
0.55%
Face-value:
1.00/share
52week high:
3.37
52week low:
0.64
Technical Analysis
Stock trades at 3.3, above its 50dma 1.96. It also trades above its 200dma 1.28. The stock remains bullish on techicals
The 52 week high is at 3.37 and the 52week low is at 0.64
Price Chart
P/E Chart
Sales and Margin
Strengths
– is almost debt free.
-Debtor days have improved from 157.73 to 46.01 days.
Weakness
– Stock is trading at 2.61 times its book value
-Though the company is reporting repeated profits, it is not paying out dividend
– has low interest coverage ratio.
-The company has delivered a poor sales growth of -9.70% over past five years.
– has a low return on equity of 1.77% for last 3 years.
-Earnings include an other income of Rs.13.09 Cr.
-‘s cost of borrowing seems high
Competition
– The industry trades at a mean P/E of 15.5x. Lloyds Steels trades at the industry’s max P/E of 593.14x. LSIL trades at a P/E of 593.0x
– Industry’s mean G-Factor is 4.5 while the mean Piotski score is 8.0. LSIL has a G-Factor of 3 and Piotski scoreof 6.
– Average 1 month return for industry is 24.3%. The max 1- month return was given by Lloyds Steels: a return of 83.33 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 4.18 cr compared to Rs 24.5 cr for period ended Mar 2020, a fall of 82.9%
Company reported negative operating profit of Rs -8.18 cr for period ended Mar 2021. For same period last year, operating profit was -3.08
The EPS for Mar 2021 was Rs -0.01 compared to Rs 0.01 for previous quarter ended Dec 2020 and Rs -0.0 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 70.05 cr for period ended Mar 2021 vis-vis sales of Rs 114.46 cr for the period ended Mar 2020, a fall of 63.4%. The 3 year sales cagr stood at -16.9%.
Operating margins shrank to -14.32% for period ended Mar 2021 vis-vis -2.53% for period ended Mar 2020, contraction of 1179.0 bps.
Net Profit reported at Rs 0.5 cr for period ended Mar 2021 vis-vis sales of Rs 2.49 cr for the period ended Mar 2020, falling 398.0%.
Company reported a poor Net Profit CAGR of -37.7% 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 17.54 cr for period ended Mar 2021 vis-vis Rs -9.01 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 214% on a 1 Year basis vis-vis a return of 42% over the last 3 Years. – The compounded sales growth on a TTM bassis is -39% vis-vis a compounded sales growth of -17% over the last 3 Years. – The compounded profit growth on a TTM basis is -80% vis-vis a compounded profit growth of -38% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Mar 2021 public holding stood at 53.83% vis-vis 53.49% for Dec 2020
Conclusion
– is almost debt free.
-Debtor days have improved from 157.73 to 46.01 days. – Stock is trading at 2.61 times its book value
-Though the company is reporting repeated profits, it is not paying out dividend
– has low interest coverage ratio.
-The company has delivered a poor sales growth of -9.70% over past five years.
– has a low return on equity of 1.77% for last 3 years.
-Earnings include an other income of Rs.13.09 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 1.96 and is trading at 3.3 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
