Mehabe score: 5 G Factor: 3 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 3 and Piotski score of 7.
Description
Pradeep Metals Ltd is engaged in the manufacturing and selling of forged and machined components for various sectors. The Company caters to both domestic and international markets.[1] Site:PRADPME Main Symbol:PRADPME
Stock trades at 123.0, above its 50dma 114.08. It also trades above its 200dma 85.58. The stock remains bullish on techicals
The 52 week high is at 139.50 and the 52week low is at 30.60
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
– has delivered good profit growth of 69.88% CAGR over last 5 years
– has been maintaining a healthy dividend payout of 20.80%
Weakness
– The company has delivered a poor sales growth of 1.83% over past five years.
– might be capitalizing the interest cost
Competition
– The industry trades at a mean P/E of 24.9x. Sona BLW Precis. trades at the industry’s max P/E of 144.69x. PRADPME trades at a P/E of 12.1x
– Industry’s mean G-Factor is 3.0 while the mean Piotski score is 7.0. PRADPME has a G-Factor of 3 and Piotski scoreof 7.
– Average 1 month return for industry is 1.5%. The max 1- month return was given by Electrost.Cast.: a return of 20.29 %
Quarterly Results
Sales for period ended Dec 2021 is Rs 56.0 cr compared to Rs 39.16 cr for period ended Dec 2020, a rise of 43.0% .
vis-vis 5.68 for period ended Dec 2020 .
Operating Margins contracted -48.7 bps for period ended Dec 2021 vis-vis Dec 2020.
Company reported operating profit of Rs 7.85 cr for period ended Dec 2021 and operating profit margin at 14.0 % for same period.
The EPS for quarter ended Dec 2021 is Rs 2.13 compared to Rs 2.9 for previous quarter ended Sep 2021 and Rs 0.85 for Dec 2020.
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 202.0 cr for period ended TTM vis-vis sales of Rs 156.0 cr for the period ended Mar 2021, a healthy growth of 22.8%. The 3 year sales cagr stood at 1.9%.
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 55.6%.
Company recorded a healthy Net Profit CAGR of 26.0% 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 21.0% over the last 3 Years. – The stock has given a return of 117% on a 1 Year basis vis-vis a return of 20% over the last 3 Years. – The compounded sales growth on a TTM bassis is 11% vis-vis a compounded sales growth of -1% over the last 3 Years. – The compounded profit growth on a TTM basis is 617% vis-vis a compounded profit growth of 32% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Dec 2021 fii holding stood at 0.0% vis-vis 0.0% for Sep 2021 – Public shareholding has remained largely constant. The Dec 2021 public holding stood at 26.51% vis-vis 26.51% for Sep 2021
Conclusion
– has reduced debt.
– has delivered good profit growth of 69.88% CAGR over last 5 years
– has been maintaining a healthy dividend payout of 20.80% – The company has delivered a poor sales growth of 1.83% over past five years.
– might be capitalizing the interest cost
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 114.08 and is trading at 123.0 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
