Mehabe score: 7 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
Sharda Cropchem is principally engaged in export of agrochemicals (technical grade and formulations) and non-agro products such as conveyor belts, rubber belts/sheets, dyes and dye intermediates to various countries across the world.
Main Points
Asset Light Business Model #
The company follows an asset light business model as they focus on Identification of generic molecules, preparing dossiers, seeking registrations, marketing & distributing formulation. The company outsources the manufacturing of AI’s and other formulations and this has resulted in cost competitiveness across various geographies.Site:SHARDACROP
Market Cap:
Rs 3,246 cr
Price:
360.0
Trading pe:
14.2x
Book-value:
179/share
Div yield:
1.39 %
Earning yield:
10.47%
Face-value:
10.0/share
52week high:
387.05
52week low:
230.75
Technical Analysis
Stock trades at 360.0, above its 50dma 340.86. It also trades above its 200dma 303.78. The stock remains bullish on techicals
The 52 week high is at 387.05 and the 52week low is at 230.75
Price Chart
P/E Chart
Sales and Margin
Strengths
– is almost debt free.
– has been maintaining a healthy dividend payout of 20.69%
-‘s median sales growth is 17.05% of last 10 years
Weakness
– has high debtors of 177.13 days.
Competition
– The industry trades at a mean P/E of 30.9x. P I Industries trades at the industry’s max P/E of 62.21x. SHARDACROP trades at a P/E of 14.2x
– Industry’s mean G-Factor is 4.1 while the mean Piotski score is 9.0. SHARDACROP has a G-Factor of 3 and Piotski scoreof 7.
– Average 1 month return for industry is 3.8%. The max 1- month return was given by P I Industries: a return of 13.1 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 1088.0 cr compared to Rs 876.0 cr for period ended Mar 2020, a rise of 24.2%
Operating Profits reported at Rs 203.0 cr for period ended Mar 2021 vis-vis 163.0 for period ended Mar 2020 .
Operating Margins expanded 5.1 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 14.84 compared to Rs 5.35 for previous quarter ended Dec 2020 and Rs 15.7 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 2396.0 cr for period ended Mar 2021 vis-vis sales of Rs 2003.0 cr for the period ended Mar 2020, a healthy growth of 16.4%. The 3 year sales cagr stood at 12.0%.
Operating margins expanded to 18.0% for period ended Mar 2021 vis-vis 17.0% for period ended Mar 2020, expansion of 100.0 bps.
Net Profit reported at Rs 229.0 cr for period ended Mar 2021 vis-vis sales of Rs 165.0 cr for the period ended Mar 2020, rising 27.9%.
Company recorded a Net Profit CAGR of 6.2% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 249.0 cr for period ended Mar 2021 vis-vis Rs 146.0 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 had stable/constant Return on Equity (RoE) metric. The RoE on Last Year basis was 15.0% compared to 16.0% over the last 3 Years. – The stock has given a return of 43% on a 1 Year basis vis-vis a return of 2% over the last 3 Years. – The compounded sales growth on a TTM bassis is 20% vis-vis a compounded sales growth of 12% over the last 3 Years. – The compounded profit growth on a TTM basis is 14% vis-vis a compounded profit growth of 5% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2021 fii holding stood at 3.15% vis-vis 4.36% for Dec 2020 – Public shareholding has remained largely constant. The Mar 2021 public holding stood at 5.37% vis-vis 3.89% for Dec 2020
Conclusion
– is almost debt free.
– has been maintaining a healthy dividend payout of 20.69%
-‘s median sales growth is 17.05% of last 10 years – has high debtors of 177.13 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 340.86 and is trading at 360.0 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
