Mehabe score: 2 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
Omax Autos is engaged in business of manufacturing and selling of sheet metal components.
Main Points
Manufacturing Plants: #
It has 5 operational manufacturing plants in Bawal, Binola, Bangalore, Lucknow & Pant Nagar.
It is setting up 2 more plants in Lucknow-Raebareli area to expand its CV and railways segment.Site:OMAXAUTO
Market Cap:
Rs 127 cr
Price:
59.2
Trading pe:
x
Book-value:
134/share
Div yield:
0.00 %
Earning yield:
-5.61%
Face-value:
10.0/share
52week high:
64.00
52week low:
29.05
Technical Analysis
Stock trades at 59.2, above its 50dma 47.55. It also trades above its 200dma 44.06. The stock remains bullish on techicals
The 52 week high is at 64.00 and the 52week low is at 29.05
Price Chart
P/E Chart
Sales and Margin
Strengths
– Stock is trading at 0.44 times its book value
Weakness
– Though the company is reporting repeated profits, it is not paying out dividend
– has low interest coverage ratio.
-The company has delivered a poor sales growth of -14.21% over past five years.
– has a low return on equity of 1.49% for last 3 years.
-Contingent liabilities of Rs.45.22 Cr.
-Debtor days have increased from 63.38 to 91.30 days.
Competition
– The industry trades at a mean P/E of 31.9x. WABCO India trades at the industry’s max P/E of 127.19x. OMAXAUTO trades at a P/E of x
– Industry’s mean G-Factor is 3.8 while the mean Piotski score is 7.0. OMAXAUTO has a G-Factor of 2 and Piotski scoreof 7.
– Average 1 month return for industry is 5.5%. The max 1- month return was given by Omax Autos: a return of 26.8 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 58.0 cr compared to Rs 93.0 cr for period ended Mar 2020, a fall of 37.6%
Company reported negative operating profit of Rs -14.0 cr for period ended Mar 2021. For same period last year, operating profit was -0.0
The EPS for Mar 2021 was Rs 9.44 compared to Rs -6.34 for previous quarter ended Dec 2020 and Rs 1.54 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 161.0 cr for period ended Mar 2021 vis-vis sales of Rs 467.0 cr for the period ended Mar 2020, a fall of 190.1%. The 3 year sales cagr stood at -48.5%.
Operating margins shrank to -26.0% for period ended Mar 2021 vis-vis 4.0% for period ended Mar 2020, contraction of 3000.0 bps.
Net Profit reported at Rs -10.0 cr for period ended Mar 2021 vis-vis sales of Rs 44.0 cr for the period ended Mar 2020, falling 0%.
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
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 86% on a 1 Year basis vis-vis a return of -29% over the last 3 Years. – The compounded sales growth on a TTM bassis is -64% vis-vis a compounded sales growth of -24% over the last 3 Years. – The compounded profit growth on a TTM basis is -313% vis-vis a compounded profit growth of 47% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Mar 2021 public holding stood at 42.12% vis-vis 42.56% for Dec 2020
Conclusion
– Stock is trading at 0.44 times its book value – Though the company is reporting repeated profits, it is not paying out dividend
– has low interest coverage ratio.
-The company has delivered a poor sales growth of -14.21% over past five years.
– has a low return on equity of 1.49% for last 3 years.
-Contingent liabilities of Rs.45.22 Cr.
-Debtor days have increased from 63.38 to 91.30 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 47.55 and is trading at 59.2 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
