Mehabe score: 4 G Factor: 1 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 1 and Piotski score of 7.
Description
Sanginita Chemicals is engaged in the business of manufacturing of Chemicals. Site:SANGINITA Main Symbol:SANGINITA
Stock trades at 29.0, above its 50dma 27.13. However it is trading below its 200dma 30.4. The stock remains weak though short term bullish momentum supports price action. It needs to close above 30.4 for bullish price action to continue
The 52 week high is at 47.20 and the 52week low is at 18.00
Price Chart
P/E Chart
Sales and Margin
Strengths
– is expected to give good quarter
Weakness
– Though the company is reporting repeated profits, it is not paying out dividend
– has low interest coverage ratio.
-Promoter holding has decreased over last quarter: -4.73%
-The company has delivered a poor sales growth of 1.65% over past five years.
– has a low return on equity of 7.39% for last 3 years.
– might be capitalizing the interest cost
Competition
– The industry trades at a mean P/E of 29.3x. Clean Science trades at the industry’s max P/E of 134.27x. SANGINITA trades at a P/E of 45.2x
– Industry’s mean G-Factor is 2.8 while the mean Piotski score is 8.0. SANGINITA has a G-Factor of 1 and Piotski scoreof 7.
– Average 1 month return for industry is 10.5%. The max 1- month return was given by SRF: a return of 17.87 %
Quarterly Results
Sales for period ended Dec 2021 is Rs 51.99 cr compared to Rs 36.9 cr for period ended Dec 2020, a rise of 40.9% .
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Company reported negative operating profit of Rs -0.33 cr for period ended Dec 2021. For same period last year, operating profit was 0.44.
The EPS for quarter ended Dec 2021 is Rs -0.52 compared to Rs 0.41 for previous quarter ended Sep 2021 and Rs -0.16 for Dec 2020.
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 213.0 cr for period ended TTM vis-vis sales of Rs 164.0 cr for the period ended Mar 2021, a healthy growth of 23.0%. The 3 year sales cagr stood at 4.2%.
Net Profit reported at Rs 0.0 cr for period ended TTM vis-vis sales of Rs 1.0 cr for the period ended Mar 2021, falling 0%.
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 9.0 cr for period ended Mar 2021 vis-vis Rs -2.0 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 worsened on its Return on Equity (RoE) metric. The RoE on Last Year basis was 2.0% compared to 7.0% over the last 3 Years. – The stock has given a return of 4% 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 26% vis-vis a compounded sales growth of -6% over the last 3 Years. – The compounded profit growth on a TTM basis is -46% vis-vis a compounded profit growth of -39% over the last 3 Years.
Ratios
Conclusion
– is expected to give good quarter – Though the company is reporting repeated profits, it is not paying out dividend
– has low interest coverage ratio.
-Promoter holding has decreased over last quarter: -4.73%
-The company has delivered a poor sales growth of 1.65% over past five years.
– has a low return on equity of 7.39% for last 3 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 27.13 and is trading at 29.0 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
