Mehabe score: 4 G Factor: 3 Piotski Score: 4 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 4.
Description
Som Distilleries & Breweries is engaged in the manufacture and sale of Beer and Indian Made Foreign Liquor (IMFL). The Company is a market leader in Beer in the State of Madhya Pradesh. The Company caters to both domestic and international markets.Site:SDBLMain Symbol:SDBL
Stock trades at 43.8, above its 50dma 42.19. It also trades above its 200dma 39.77. The stock remains bullish on techicals
The 52 week high is at 59.60 and the 52week low is at 22.50
Price Chart
P/E Chart
Sales and Margin
Strengths
– Stock is trading at 1.01 times its book value
Weakness
– has low interest coverage ratio.
-Promoter holding is low: 24.48%
– has a low return on equity of -0.42% for last 3 years.
-Contingent liabilities of Rs.134.25 Cr.
-Earnings include an other income of Rs.2.94 Cr.
– has high debtors of 166.91 days.
Competition
– The industry trades at a mean P/E of 39.1x. United Breweries trades at the industry’s max P/E of 131.02x. SDBL trades at a P/E of x
– Industry’s mean G-Factor is 4.2 while the mean Piotski score is 9.0. SDBL has a G-Factor of 3 and Piotski scoreof 4.
– Average 1 month return for industry is 21.2%. The max 1- month return was given by Tilaknagar Inds.: a return of 77.35 %
Quarterly Results
Sales for period ended Sep 2021 is Rs 77.45 cr compared to Rs 63.05 cr for period ended Sep 2020, a rise of 22.8%
Operating Profits reported at Rs 4.63 cr for period ended Sep 2021 vis-vis 0.67 for period ended Sep 2020 .
Operating Margins expanded 491.5 bps for period ended Sep 2021 vis-vis Sep 2020 .
The EPS for Sep 2021 was Rs -0.38 compared to Rs -1.94 for previous quarter ended Jun 2021 and Rs -1.01 for Sep 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 313.0 cr for period ended TTM vis-vis sales of Rs 288.0 cr for the period ended Mar 2021, a growth of 8.0%. The 3 year sales cagr stood at -7.3%.
Operating margins expanded to 1.0% for period ended TTM vis-vis -3.0% for period ended Mar 2021, expansion of 400.0 bps.
Net Profit reported at Rs -22.0 cr for period ended TTM vis-vis sales of Rs -38.0 cr for the period ended Mar 2021, rising 0%.
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
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 -13.0% compared to 0.0% over the last 3 Years. – The stock has given a return of 79% on a 1 Year basis vis-vis a return of -21% over the last 3 Years. – The compounded sales growth on a TTM bassis is -4% vis-vis a compounded sales growth of -6% over the last 3 Years. – The compounded profit growth on a TTM basis is -12% vis-vis a compounded profit growth of % over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Sep 2021 fii holding stood at 0.02% vis-vis 0.05% for Jun 2021 – Public shareholding has remained largely constant. The Sep 2021 public holding stood at 75.5% vis-vis 74.46% for Jun 2021
Conclusion
– Stock is trading at 1.01 times its book value – has low interest coverage ratio.
-Promoter holding is low: 24.48%
– has a low return on equity of -0.42% for last 3 years.
-Contingent liabilities of Rs.134.25 Cr.
-Earnings include an other income of Rs.2.94 Cr.
– has high debtors of 166.91 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 42.19 and is trading at 43.8 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
