Mehabe score: 3 G Factor: 3 Piotski Score: 5 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 5.
Description
Nilkamal Ltd transformed from Plastic Furniture to Complete Furniture Solution Provider for Home Furniture, Office Furniture, etc., in various materials and upholstered products. #
Main Points
Products
It is involved in the following:
Furniture business has four major categories Moulded Furniture, Ready Furniture, etc. It added more than 15 products in the value-added segment.
was promoted through television and newspaper advertisements in FY20.
showed growth by launching innovative products like Travel Guard (Transport), Virus Guard (for office, cafeteria, Education), and patient bed, to help fight Covid-19.
added 6 new Franchisee stores (FOFO) in FY20.Site:NILKAMALMain Symbol:NILKAMAL
Stock trades at 2304.0, above its 50dma 2166.97. It also trades above its 200dma 1803.24. The stock remains bullish on techicals
The 52 week high is at 2606.50 and the 52week low is at 1104.00
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
– is almost debt free.
– has been maintaining a healthy dividend payout of 17.37%
Weakness
– The company has delivered a poor sales growth of 1.66% over past five years.
– has a low return on equity of 12.31% for last 3 years.
Competition
– The industry trades at a mean P/E of 27.7x. Astral trades at the industry’s max P/E of 102.79x. NILKAMAL trades at a P/E of 30.4x
– Industry’s mean G-Factor is 4.9 while the mean Piotski score is 9.0. NILKAMAL has a G-Factor of 3 and Piotski scoreof 5.
– Average 1 month return for industry is 5.0%. The max 1- month return was given by Jai Corp: a return of 26.06 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 680.0 cr compared to Rs 561.0 cr for period ended Mar 2020, a rise of 21.2%
Operating Profits reported at Rs 79.0 cr for period ended Mar 2021 vis-vis 71.0 for period ended Mar 2020 .
Operating Margins contracted -103.8 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 25.51 compared to Rs 36.39 for previous quarter ended Dec 2020 and Rs 21.28 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 2092.0 cr for period ended Mar 2021 vis-vis sales of Rs 2257.0 cr for the period ended Mar 2020, a fall of 7.9%. The 3 year sales cagr stood at -0.5%.
Operating margins shrank to 12.0% for period ended Mar 2021 vis-vis 13.0% for period ended Mar 2020, contraction of 100.0 bps.
Net Profit reported at Rs 113.0 cr for period ended Mar 2021 vis-vis sales of Rs 142.0 cr for the period ended Mar 2020, falling 25.7%.
Company reported a poor Net Profit CAGR of -2.8% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
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 10.0% compared to 12.0% over the last 3 Years. – The stock has given a return of 103% 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 -7% vis-vis a compounded sales growth of -1% over the last 3 Years. – The compounded profit growth on a TTM basis is -16% vis-vis a compounded profit growth of -3% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2021 fii holding stood at 2.07% vis-vis 1.97% for Dec 2020 – Public shareholding has remained largely constant. The Mar 2021 public holding stood at 15.26% vis-vis 15.87% for Dec 2020
Conclusion
– has reduced debt.
– is almost debt free.
– has been maintaining a healthy dividend payout of 17.37% – The company has delivered a poor sales growth of 1.66% over past five years.
– has a low return on equity of 12.31% for 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 2166.97 and is trading at 2304.0 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
