Mehabe score: 4 G Factor: 1 Piotski Score: 3 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 3.
Description
Novartis India is engaged in the Business of Wholesale of pharmaceuticals and medical goods.Site:NOVARTIND
Market Cap:
Rs 2,237 cr
Price:
906.0
Trading pe:
124.0x
Book-value:
287/share
Div yield:
1.10 %
Earning yield:
2.15%
Face-value:
5.00/share
52week high:
998.00
52week low:
530.05
Technical Analysis
Stock trades at 906.0, above its 50dma 675.75. It also trades above its 200dma 641.81. The stock remains bullish on techicals
The 52 week high is at 998.00 and the 52week low is at 530.05
Price Chart
P/E Chart
Sales and Margin
Strengths
– is almost debt free.
– has been maintaining a healthy dividend payout of 108.00%
Weakness
– Stock is trading at 3.16 times its book value
-The company has delivered a poor sales growth of -12.82% over past five years.
– has a low return on equity of 5.53% for last 3 years.
-Earnings include an other income of Rs.28.76 Cr.
Competition
– The industry trades at a mean P/E of 66.7x. Novartis India trades at the industry’s max P/E of 124.44x. NOVARTIND trades at a P/E of 124.0x
– Industry’s mean G-Factor is 3.9 while the mean Piotski score is 8.0. NOVARTIND has a G-Factor of 1 and Piotski scoreof 3.
– Average 1 month return for industry is 7.4%. The max 1- month return was given by Novartis India: a return of 42.75 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 99.29 cr compared to Rs 93.7 cr for period ended Mar 2020, a rise of 6.0%
Operating Profits reported at Rs 15.27 cr for period ended Mar 2021 vis-vis 11.01 for period ended Mar 2020 .
Operating Margins expanded 362.9 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 3.93 compared to Rs -0.29 for previous quarter ended Dec 2020 and Rs 2.75 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 381.0 cr for period ended Mar 2021 vis-vis sales of Rs 438.0 cr for the period ended Mar 2020, a fall of 15.0%. The 3 year sales cagr stood at -12.3%.
Operating margins expanded to 7.0% for period ended Mar 2021 vis-vis 3.0% for period ended Mar 2020, expansion of 400.0 bps.
Net Profit reported at Rs 21.0 cr for period ended Mar 2021 vis-vis sales of Rs 10.0 cr for the period ended Mar 2020, rising 52.4%.
Company reported a poor Net Profit CAGR of -35.4% 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 -23.0 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 1.0% compared to 6.0% over the last 3 Years. – The stock has given a return of 50% on a 1 Year basis vis-vis a return of 9% over the last 3 Years. – The compounded sales growth on a TTM bassis is -17% vis-vis a compounded sales growth of -13% over the last 3 Years. – The compounded profit growth on a TTM basis is -21% vis-vis a compounded profit growth of -44% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2021 fii holding stood at 0.06% vis-vis 0.05% for Dec 2020 – Public shareholding has remained largely constant. The Mar 2021 public holding stood at 28.48% vis-vis 28.48% for Dec 2020
Conclusion
– is almost debt free.
– has been maintaining a healthy dividend payout of 108.00% – Stock is trading at 3.16 times its book value
-The company has delivered a poor sales growth of -12.82% over past five years.
– has a low return on equity of 5.53% for last 3 years.
-Earnings include an other income of Rs.28.76 Cr.
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 675.75 and is trading at 906.0 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
