Mehabe score: 5 G Factor: 2 Piotski Score: 2 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 2 and Piotski score of 2.
Description
Sky Industries Ltd[1] is one of the leading hook and loop manufacturer and exporter in India. They are one of the country’s most trusted suppliers. Their product reach is across multiple countries in the world like the USA, UK, Germany, Turkey, Bangladesh and Sri Lanka. The wide range of products includes various types of hook and loop fastener, hook and loop tapes, neoprene, velvet, elastic, webbing strap and other products. Site:SKYIND Main Symbol:SKYIND
Stock trades at 93.8, above its 50dma 12.15. It also trades above its 200dma 22.11. The stock remains bullish on techicals
The 52 week high is at 9.89 and the 52week low is at 8.08
Price Chart
P/E Chart
Sales and Margin
Strengths
– is expected to give good quarter
– has been maintaining a healthy dividend payout of 58.99%
Weakness
– The company has delivered a poor sales growth of 0.62% over past five years.
– has a low return on equity of 6.70% for last 3 years.
Competition
– The industry trades at a mean P/E of 30.5x. Jindal Worldwide trades at the industry’s max P/E of 76.58x. SKYIND trades at a P/E of 16.4x
– Industry’s mean G-Factor is 2.5 while the mean Piotski score is 9.0. SKYIND has a G-Factor of 2 and Piotski scoreof 2.
– Average 1 month return for industry is 9.4%. The max 1- month return was given by Jindal Worldwide: a return of 36.0 %
Quarterly Results
Sales for period ended Dec 2021 is Rs 19.44 cr compared to Rs 17.34 cr for period ended Dec 2020, a rise of 12.1% .
vis-vis 2.29 for period ended Dec 2020 .
Operating Margins contracted -250.7 bps for period ended Dec 2021 vis-vis Dec 2020.
Company reported operating profit of Rs 2.08 cr for period ended Dec 2021 and operating profit margin at 10.7 % for same period.
The EPS for quarter ended Dec 2021 is Rs 1.34 compared to Rs 1.84 for previous quarter ended Sep 2021 and Rs 0.67 for Dec 2020.
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 72.08 cr for period ended TTM vis-vis sales of Rs 53.4 cr for the period ended Mar 2021, a healthy growth of 25.9%. The 3 year sales cagr stood at 7.3%.
Operating margins expanded to 11.72% for period ended TTM vis-vis 9.63% for period ended Mar 2021, expansion of 209.0 bps.
Net Profit reported at Rs 4.03 cr for period ended TTM vis-vis sales of Rs 0.8 cr for the period ended Mar 2021, rising 80.1%.
Company recorded a healthy Net Profit CAGR of 28.3% 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 5.0% compared to 7.0% over the last 3 Years. – The stock has given a return of 118% on a 1 Year basis vis-vis a return of 43% over the last 3 Years. – The compounded sales growth on a TTM bassis is 46% vis-vis a compounded sales growth of 0% over the last 3 Years. – The compounded profit growth on a TTM basis is 5443% vis-vis a compounded profit growth of -24% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Dec 2021 public holding stood at 43.44% vis-vis 43.44% for Sep 2021
Conclusion
– is expected to give good quarter
– has been maintaining a healthy dividend payout of 58.99% – The company has delivered a poor sales growth of 0.62% over past five years.
– has a low return on equity of 6.70% for last 3 years.
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 12.15 and is trading at 93.8 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
