Mehabe score: 4 G Factor: 3 Piotski Score: 6 The stock has a rating SELL. 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
Established in 1974, Modern Steel Ltd. manufactures low-alloy and carbon-steel-rolled products for commercial vehicles, such as trucks and tractors, passenger vehicles, two-wheelers, and engineering companies. Site:MDRNSTL Main Symbol:MDRNSTL
Stock trades at 17.8, below its 50dma 55.48 and below its 200dma 56.35. The stock remains bearish on technicals
The 52 week high is at 82.65 and the 52week low is at 38.45
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
– is expected to give good quarter
Weakness
– has low interest coverage ratio.
-The company has delivered a poor sales growth of -20.42% over past five years.
-Promoters have pledged 100.00% of their holding.
-Earnings include an other income of Rs.64.82 Cr.
Competition
– The industry trades at a mean P/E of 14.0x. Apollo Tricoat trades at the industry’s max P/E of 36.74x. MDRNSTL trades at a P/E of x
– Industry’s mean G-Factor is 5.4 while the mean Piotski score is 9.0. MDRNSTL has a G-Factor of 3 and Piotski scoreof 6.
– Average 1 month return for industry is 22.0%. The max 1- month return was given by Modern Steels: a return of 52.1 %
Quarterly Results
Sales for period ended Dec 2021 is Rs 27.32 cr compared to Rs 23.33 cr for period ended Dec 2020, a rise of 17.1% .
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Company reported negative operating profit of Rs -0.29 cr for period ended Dec 2021. For same period last year, operating profit was -10.49.
The EPS for quarter ended Dec 2021 is Rs 0.23 compared to Rs -1.0 for previous quarter ended Sep 2021 and Rs -7.67 for Dec 2020.
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 130.0 cr for period ended TTM vis-vis sales of Rs 84.0 cr for the period ended Mar 2021, a healthy growth of 35.4%. The 3 year sales cagr stood at -26.1%.
Operating margins expanded to 1.0% for period ended TTM vis-vis -25.0% for period ended Mar 2021, expansion of 2600.0 bps.
Net Profit reported at Rs 62.0 cr for period ended TTM vis-vis sales of Rs -22.0 cr for the period ended Mar 2021, rising 0%.
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 133.0 cr for period ended Mar 2021 vis-vis Rs 1.0 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 360% on a 1 Year basis vis-vis a return of 17% over the last 3 Years. – The compounded sales growth on a TTM bassis is 70% vis-vis a compounded sales growth of -39% over the last 3 Years. – The compounded profit growth on a TTM basis is 99% vis-vis a compounded profit growth of 8% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Dec 2021 public holding stood at 34.42% vis-vis 34.42% for Sep 2021
Conclusion
– has reduced debt.
– is expected to give good quarter – has low interest coverage ratio.
-The company has delivered a poor sales growth of -20.42% over past five years.
-Promoters have pledged 100.00% of their holding.
-Earnings include an other income of Rs.64.82 Cr.
Fundamentally, the stock remains weak. The business fundamentals are on shaky ground. Weak near term results have dampened and questioned business drivers. We suggest to wait for a upturn in business performance.
Technically, the stock reflects the poor fundamentals. The stock remains below its 50 DMA 55.48 and is trading at 17.8. It has shown near term lack of bullish momentum. We suggest to observe price action. However as investors, who like to avoid timing the markets, we suggest to avoid the stock
