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
Magadh Sugar & Energy Limited is primarily engaged in the manufacture and sale of sugar and its by-products (molasses, bagasse and press-mud), denatured spirits including ethanol and power. The Company is part of the K. K. Birla Group of Sugar Companies. [1] Site:MAGADHSUGAR Main Symbol:MAGADHSUGAR
Stock trades at 318.0, above its 50dma 284.79. It also trades above its 200dma 254.83. The stock remains bullish on techicals
The 52 week high is at 386.95 and the 52week low is at 95.00
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
-Stock is trading at 0.80 times its book value
Weakness
– has low interest coverage ratio.
– has a low return on equity of 8.89% for last 3 years.
-Dividend payout has been low at 11.16% of profits over last 3 years
Competition
– The industry trades at a mean P/E of 13.1x. Bannari Amm.Sug. trades at the industry’s max P/E of 45.4x. MAGADHSUGAR trades at a P/E of 15.2x
– Industry’s mean G-Factor is 3.6 while the mean Piotski score is 9.0. MAGADHSUGAR has a G-Factor of 3 and Piotski scoreof 6.
– Average 1 month return for industry is 7.7%. The max 1- month return was given by Dhampur Sugar: a return of 17.9 %
Quarterly Results
Sales for period ended Dec 2021 is Rs 202.0 cr compared to Rs 222.0 cr for period ended Dec 2020, a fall of 9.0%
.
vis-vis 41.0 for period ended Dec 2020 .
Operating Margins expanded 232.4 bps for period ended Dec 2021 vis-vis Dec 2020.
Company reported operating profit of Rs 42.0 cr for period ended Dec 2021 and operating profit margin at 20.8 % for same period.
The EPS for quarter ended Dec 2021 is Rs 14.18 compared to Rs -2.15 for previous quarter ended Sep 2021 and Rs 10.38 for Dec 2020.
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 978.0 cr for period ended TTM vis-vis sales of Rs 952.0 cr for the period ended Mar 2021, a growth of 2.7%. The 3 year sales cagr stood at 9.8%.
Net Profit reported at Rs 35.0 cr for period ended TTM vis-vis sales of Rs 27.0 cr for the period ended Mar 2021, rising 22.9%.
Company recorded a Net Profit CAGR of 1.0% 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 125.0 cr for period ended Mar 2021 vis-vis Rs -17.0 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 worsened on its Return on Equity (RoE) metric. The RoE on Last Year basis was 5.0% compared to 9.0% over the last 3 Years. – The stock has given a return of 184% on a 1 Year basis vis-vis a return of 73% over the last 3 Years. – The compounded sales growth on a TTM bassis is 2% vis-vis a compounded sales growth of 10% over the last 3 Years. – The compounded profit growth on a TTM basis is -44% vis-vis a compounded profit growth of 10% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Dec 2021 fii holding stood at 0.0% vis-vis 0.0% for Sep 2021 – Public shareholding has remained largely constant. The Dec 2021 public holding stood at 38.97% vis-vis 38.97% for Sep 2021
Conclusion
– has reduced debt.
-Stock is trading at 0.80 times its book value – has low interest coverage ratio.
– has a low return on equity of 8.89% for last 3 years.
-Dividend payout has been low at 11.16% 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 284.79 and is trading at 318.0 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
