Mehabe score: 2 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
Oriental Aromatics is engaged in the Business of manufacturing Fine chemicals i.e. camphor, perfumery & specialty aroma chemicals, fragrances and flavours. Site:OAL Main Symbol:OAL
Stock trades at 739.0, below its 50dma 780.41 and below its 200dma 770.4. The stock remains bearish on technicals
The 52 week high is at 1148.00 and the 52week low is at 545.00
Price Chart
P/E Chart
Sales and Margin
Strengths
– is almost debt free.
– is expected to give good quarter
– has delivered good profit growth of 35.95% CAGR over last 5 years
Weakness
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Competition
– The industry trades at a mean P/E of 29.6x. Clean Science trades at the industry’s max P/E of 127.59x. OAL trades at a P/E of 26.7x
– Industry’s mean G-Factor is 3.1 while the mean Piotski score is 8.0. OAL has a G-Factor of 3 and Piotski scoreof 6.
– Average 1 month return for industry is 8.3%. The max 1- month return was given by Gujarat Fluoroch: a return of 20.01 %
Quarterly Results
Sales for period ended Dec 2021 is Rs 205.78 cr compared to Rs 190.68 cr for period ended Dec 2020, a rise of 7.9% .
vis-vis 53.82 for period ended Dec 2020 .
Operating Margins contracted -2017.3 bps for period ended Dec 2021 vis-vis Dec 2020.
Company reported operating profit of Rs 16.57 cr for period ended Dec 2021 and operating profit margin at 8.1 % for same period.
The EPS for quarter ended Dec 2021 is Rs 2.48 compared to Rs 3.67 for previous quarter ended Sep 2021 and Rs 10.8 for Dec 2020.
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 887.0 cr for period ended TTM vis-vis sales of Rs 709.0 cr for the period ended Mar 2021, a healthy growth of 20.1%. The 3 year sales cagr stood at 5.6%.
Operating margins shrank to 12.0% for period ended TTM vis-vis 22.0% for period ended Mar 2021, contraction of 1000.0 bps.
Net Profit reported at Rs 65.0 cr for period ended TTM vis-vis sales of Rs 102.0 cr for the period ended Mar 2021, falling 56.9%.
Company recorded a Net Profit CAGR of 9.1% 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 20.0% compared to 19.0% over the last 3 Years. – The stock has given a return of 21% on a 1 Year basis vis-vis a return of 39% over the last 3 Years. – The compounded sales growth on a TTM bassis is 36% vis-vis a compounded sales growth of 12% over the last 3 Years. – The compounded profit growth on a TTM basis is 23% vis-vis a compounded profit growth of 50% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Dec 2021 fii holding stood at 0.08% vis-vis 0.06% for Sep 2021 – Public shareholding has remained largely constant. The Dec 2021 public holding stood at 25.75% vis-vis 25.77% for Sep 2021
Conclusion
– is almost debt free.
– is expected to give good quarter
– has delivered good profit growth of 35.95% CAGR over last 5 years –
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 780.41 and is trading at 739.0. 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
