Mehabe score: 4 G Factor: 1 Piotski Score: 4 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 4.
Description
National Fertilizer is engaged in production and marketing of Neem Coated Urea, Bio-Fertilizers (solid & liquid) and other allied Industrial products like Ammonia, Nitric Acid, Ammonium Nitrate, Sodium Nitrite and Sodium Nitrate. The Company is also engaged in trading of Imported and Domestic Fertilizers, Compost, Seeds, Agro Chemicals and other Agro products.Site:NFL
Market Cap:
Rs 3,505 cr
Price:
71.3
Trading pe:
9.06x
Book-value:
42.7/share
Div yield:
1.33 %
Earning yield:
7.78%
Face-value:
10.0/share
52week high:
73.75
52week low:
26.25
Technical Analysis
Stock trades at 71.3, above its 50dma 62.51. It also trades above its 200dma 48.35. The stock remains bullish on techicals
The 52 week high is at 73.75 and the 52week low is at 26.25
Price Chart
P/E Chart
Sales and Margin
Strengths
–
Weakness
– has a low return on equity of 11.07% for last 3 years.
– might be capitalizing the interest cost
-Dividend payout has been low at 1.77% of profits over last 3 years
– has high debtors of 214.95 days.
Competition
– The industry trades at a mean P/E of 10.9x. F A C T trades at the industry’s max P/E of 30.77x. NFL trades at a P/E of 9.06x
– Industry’s mean G-Factor is 4.0 while the mean Piotski score is 9.0. NFL has a G-Factor of 1 and Piotski scoreof 4.
– Average 1 month return for industry is 7.4%. The max 1- month return was given by Chambal Fert.: a return of 23.42 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 2961.17 cr compared to Rs 3014.43 cr for period ended Mar 2020, a fall of 1.8%
Operating Profits reported at Rs 107.54 cr for period ended Mar 2021 vis-vis 256.58 for period ended Mar 2020 .
Operating Margins contracted -488.0 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs -0.19 compared to Rs 1.08 for previous quarter ended Dec 2020 and Rs -5.07 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 11906.0 cr for period ended Mar 2021 vis-vis sales of Rs 13135.0 cr for the period ended Mar 2020, a fall of 10.3%.
Operating margins expanded to 8.0% for period ended Mar 2021 vis-vis 6.0% for period ended Mar 2020, expansion of 200.0 bps.
Net Profit reported at Rs 237.0 cr for period ended Mar 2021 vis-vis sales of Rs -181.0 cr for the period ended Mar 2020, rising 176.4%.
Company recorded a Net Profit CAGR of 3.6% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities: Rs 0.0 cr for period ended Mar 2021 vis-vis Rs -487.0 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 had stable/constant Return on Equity (RoE) metric. The RoE on Last Year basis was 9.0% compared to 11.0% over the last 3 Years. – The stock has given a return of 168% on a 1 Year basis vis-vis a return of 10% over the last 3 Years. – The compounded sales growth on a TTM bassis is -9% vis-vis a compounded sales growth of 20% over the last 3 Years. – The compounded profit growth on a TTM basis is 166% vis-vis a compounded profit growth of -2% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2021 fii holding stood at 0.01% vis-vis 0.09% for Dec 2020 – Public shareholding has fallen for the period ended Mar 2021. The Mar 2021 public holding stood at 10.01% vis-vis 23.01% for Dec 2020
Conclusion
– – has a low return on equity of 11.07% for last 3 years.
– might be capitalizing the interest cost
-Dividend payout has been low at 1.77% of profits over last 3 years
– has high debtors of 214.95 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 62.51 and is trading at 71.3 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
