Mehabe score: 2 G Factor: 1 Piotski Score: 1 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 1 and Piotski score of 1.
Description
Morarjee Textiles is primarily engaged in the business of Textile Products.Site:MORARJEEMain Symbol:MORARJEE
Stock trades at 19.8, above its 50dma 17.67. It also trades above its 200dma 14.61. The stock remains bullish on techicals
The 52 week high is at 23.95 and the 52week low is at 7.86
Price Chart
P/E Chart
Sales and Margin
Strengths
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Weakness
– Stock is trading at 7.26 times its book value
– has low interest coverage ratio.
-The company has delivered a poor sales growth of -10.45% over past five years.
– has a low return on equity of -49.64% for last 3 years.
-Contingent liabilities of Rs.30.82 Cr.
-Earnings include an other income of Rs.1.16 Cr.
-Debtor days have increased from 47.68 to 66.74 days.
Competition
– The industry trades at a mean P/E of 23.3x. Garware Tech. trades at the industry’s max P/E of 43.55x. MORARJEE trades at a P/E of x
– Industry’s mean G-Factor is 3.5 while the mean Piotski score is 8.0. MORARJEE has a G-Factor of 1 and Piotski scoreof 1.
– Average 1 month return for industry is 6.3%. The max 1- month return was given by Welspun India: a return of 13.74 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 65.0 cr compared to Rs 87.0 cr for period ended Mar 2020, a fall of 25.3%
Operating Profits reported at Rs 7.0 cr for period ended Mar 2021 vis-vis 2.0 for period ended Mar 2020 .
Operating Margins expanded 847.0 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs -3.77 compared to Rs -3.67 for previous quarter ended Dec 2020 and Rs -3.37 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 194.0 cr for period ended Mar 2021 vis-vis sales of Rs 382.0 cr for the period ended Mar 2020, a fall of 96.9%. The 3 year sales cagr stood at -18.7%.
Operating margins shrank to 1.0% for period ended Mar 2021 vis-vis 11.0% for period ended Mar 2020, contraction of 1000.0 bps.
Net Profit reported at Rs -62.0 cr for period ended Mar 2021 vis-vis sales of Rs -26.0 cr for the period ended Mar 2020, falling 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 worsened on its Return on Equity (RoE) metric. The RoE on Last Year basis was -185.0% compared to -50.0% over the last 3 Years. – The stock has given a return of 71% on a 1 Year basis vis-vis a return of -12% over the last 3 Years. – The compounded sales growth on a TTM bassis is -49% vis-vis a compounded sales growth of -19% over the last 3 Years. – The compounded profit growth on a TTM basis is -138% vis-vis a compounded profit growth of % over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Mar 2021 public holding stood at 31.41% vis-vis 31.41% for Dec 2020
Conclusion
– – Stock is trading at 7.26 times its book value
– has low interest coverage ratio.
-The company has delivered a poor sales growth of -10.45% over past five years.
– has a low return on equity of -49.64% for last 3 years.
-Contingent liabilities of Rs.30.82 Cr.
-Earnings include an other income of Rs.1.16 Cr.
-Debtor days have increased from 47.68 to 66.74 days.
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 17.67 and is trading at 19.8 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
