Mehabe score: 7 G Factor: 2 Piotski Score: 7 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 2 and Piotski score of 7.
Description
Olectra Greentech Limited was incorporated in 1992. The Company is primarily engaged in the manufacturing of composite polymer insulators and electrical buses. Its registered office is in Hyderabad. [1] [2] Site:OLECTRA Main Symbol:OLECTRA
Stock trades at 800.0, above its 50dma 768.73. It also trades above its 200dma 518.66. The stock remains bullish on techicals
The 52 week high is at 941.20 and the 52week low is at 125.00
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
– is almost debt free.
– is expected to give good quarter
Weakness
– Stock is trading at 8.81 times its book value
-Though the company is reporting repeated profits, it is not paying out dividend
– has a low return on equity of -0.59% for last 3 years.
– has high debtors of 341.94 days.
-Promoter holding has decreased over last 3 years: -6.86%
Competition
– The industry trades at a mean P/E of 342.4x. Tata Motors trades at the industry’s max P/E of 342.42x. OLECTRA trades at a P/E of 342.0x
– Industry’s mean G-Factor is 3.2 while the mean Piotski score is 7.0. OLECTRA has a G-Factor of 2 and Piotski scoreof 7.
– Average 1 month return for industry is 4.3%. The max 1- month return was given by Tata Motors-DVR: a return of 8.45 %
Quarterly Results
Sales for period ended Sep 2021 is Rs 71.43 cr compared to Rs 50.24 cr for period ended Sep 2020, a rise of 42.2% .
vis-vis 2.93 for period ended Sep 2020 .
Operating Margins expanded 1536.4 bps for period ended Sep 2021 vis-vis Sep 2020.
Company reported operating profit of Rs 15.14 cr for period ended Sep 2021 and operating profit margin at 21.2 % for same period.
The EPS for quarter ended Sep 2021 is Rs 0.44 compared to Rs 0.16 for previous quarter ended Jun 2021 and Rs 0.06 for Sep 2020.
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 323.0 cr for period ended TTM vis-vis sales of Rs 281.0 cr for the period ended Mar 2021, a healthy growth of 13.0%. The 3 year sales cagr stood at 23.9%.
Operating margins expanded to 15.0% for period ended TTM vis-vis 7.0% for period ended Mar 2021, expansion of 800.0 bps.
Net Profit reported at Rs 18.0 cr for period ended TTM vis-vis sales of Rs 8.0 cr for the period ended Mar 2021, rising 0%.
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 209.0 cr for period ended Mar 2021 vis-vis Rs -219.0 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 1.0% compared to -1.0% over the last 3 Years. – The stock has given a return of 481% on a 1 Year basis vis-vis a return of 52% over the last 3 Years. – The compounded sales growth on a TTM bassis is 70% vis-vis a compounded sales growth of 20% over the last 3 Years. – The compounded profit growth on a TTM basis is 341% vis-vis a compounded profit growth of -3% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Dec 2021 fii holding stood at 9.13% vis-vis 8.65% for Sep 2021 – Public shareholding has remained largely constant. The Dec 2021 public holding stood at 39.22% vis-vis 39.53% for Sep 2021
Conclusion
– has reduced debt.
– is almost debt free.
– is expected to give good quarter – Stock is trading at 8.81 times its book value
-Though the company is reporting repeated profits, it is not paying out dividend
– has a low return on equity of -0.59% for last 3 years.
– has high debtors of 341.94 days.
-Promoter holding has decreased over last 3 years: -6.86%
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 768.73 and is trading at 800.0 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
