Mehabe score: 3 G Factor: 5 Piotski Score: 6 The stock has a rating 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 5 and Piotski score of 6.
Description
Sanghi Industries is engaged in the manufacturing and marketing of cement and cement products in domestic and export market.Site:SANGHIIND
Market Cap:
Rs 1,443 cr
Price:
57.6
Trading pe:
21.2x
Book-value:
68.7/share
Div yield:
0.00 %
Earning yield:
5.72%
Face-value:
10.0/share
52week high:
59.00
52week low:
18.65
Technical Analysis
Stock trades at 57.6, above its 50dma 47.22. It also trades above its 200dma 39.42. The stock remains bullish on techicals
The 52 week high is at 59.00 and the 52week low is at 18.65
Price Chart
P/E Chart
Sales and Margin
Strengths
– Stock is trading at 0.84 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 -3.27% over past five years.
-Tax rate seems low
– has a low return on equity of 4.53% for last 3 years.
– might be capitalizing the interest cost
-Promoters have pledged 98.82% of their holding.
Competition
– The industry trades at a mean P/E of 19.5x. Shree Cement trades at the industry’s max P/E of 44.49x. SANGHIIND trades at a P/E of 21.2x
– Industry’s mean G-Factor is 4.8 while the mean Piotski score is 8.0. SANGHIIND has a G-Factor of 5 and Piotski scoreof 6.
– Average 1 month return for industry is 8.8%. The max 1- month return was given by Birla Corpn.: a return of 25.54 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 328.0 cr compared to Rs 222.0 cr for period ended Mar 2020, a rise of 47.7%
Operating Profits reported at Rs 94.0 cr for period ended Mar 2021 vis-vis 51.0 for period ended Mar 2020 .
Operating Margins expanded 568.6 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 1.04 compared to Rs 1.67 for previous quarter ended Dec 2020 and Rs 0.63 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 939.0 cr for period ended Mar 2021 vis-vis sales of Rs 888.0 cr for the period ended Mar 2020, a growth of 5.4%. The 3 year sales cagr stood at -2.9%.
Operating margins expanded to 26.0% for period ended Mar 2021 vis-vis 22.0% for period ended Mar 2020, expansion of 400.0 bps.
Net Profit reported at Rs 78.0 cr for period ended Mar 2021 vis-vis sales of Rs 65.0 cr for the period ended Mar 2020, rising 16.7%.
Company reported a poor Net Profit CAGR of -5.7% over the last 3 years
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 4.0% compared to 5.0% over the last 3 Years. – The stock has given a return of 171% on a 1 Year basis vis-vis a return of -13% over the last 3 Years. – The compounded sales growth on a TTM bassis is -12% vis-vis a compounded sales growth of -4% over the last 3 Years. – The compounded profit growth on a TTM basis is -10% vis-vis a compounded profit growth of 1% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2021 fii holding stood at 0.34% vis-vis 0.16% for Dec 2020 – Public shareholding has remained largely constant. The Mar 2021 public holding stood at 27.1% vis-vis 25.65% for Dec 2020
Conclusion
– Stock is trading at 0.84 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 -3.27% over past five years.
-Tax rate seems low
– has a low return on equity of 4.53% for last 3 years.
– might be capitalizing the interest cost
-Promoters have pledged 98.82% of their holding.
The business fundamentals of the stock remain stable. Stronger near term results will build interest in the stock. We suggest to wait for a upturn in business performance.
Technically, the stock remains above its 50 DMA 47.22 and is trading at 57.6, thus bullish price action wise.
