Investment Memo: SLSTLQ

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Our Rating: HOLD

Mehabe score: 6
G Factor: 6
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 6 and Piotski score of 6.

Description

Sri Lakshmi Saraswathi (Arni) is also engaged in generation of electricity from its windmills for its captive consumption.(Source : 201903 Annual Report Page No:47)
Site: SLSTLQ
Main Symbol: SLSTLQ

Price Chart

Technical Analysis

• Stock trades at 70.0, above its 50dma 53.53. It also trades above its 200dma 32.47. The stock remains bullish on techicals
• The 52 week high is at 78.80 and the 52week low is at 5.07

Price Chart

P/E Chart

Sales and Margin

Strengths

– is expected to give good quarter

Weakness

– The company has delivered a poor sales growth of -4.61% over past five years.
-‘s cost of borrowing seems high

Competition

– The industry trades at a mean P/E of 10.8x. Arvind Ltd trades at the industry’s max P/E of 17.4x. SLSTLQ trades at a P/E of 3.74x
– Industry’s mean G-Factor is 4.4 while the mean Piotski score is 8.0. SLSTLQ has a G-Factor of 6 and Piotski scoreof 6.
– Average 1 month return for industry is 12.0%. The max 1- month return was given by Sri Lak.Sar.Arni: a return of 35.35 %

Quarterly Results

• Sales for period ended Dec 2021 is Rs 40.62 cr compared to Rs 26.16 cr for period ended Dec 2020, a rise of 55.3% .

vis-vis 1.13 for period ended Dec 2020 .

• Operating Margins expanded 117.0 bps for period ended Dec 2021 vis-vis Dec 2020.
• Company reported operating profit of Rs 2.23 cr for period ended Dec 2021 and operating profit margin at 5.5 % for same period.
• The EPS for quarter ended Dec 2021 is Rs 2.85 compared to Rs 3.15 for previous quarter ended Sep 2021 and Rs -0.3 for Dec 2020.

Profit & Loss Statement

Profit&Loss Comments

• Company reported sales of Rs 141.0 cr for period ended TTM vis-vis sales of Rs 86.0 cr for the period ended Mar 2021, a healthy growth of 39.0%. The 3 year sales cagr stood at 8.0%.
• Operating margins expanded to 8.0% for period ended TTM vis-vis 3.0% for period ended Mar 2021, expansion of 500.0 bps.
• Net Profit reported at Rs 7.0 cr for period ended TTM vis-vis sales of Rs -1.0 cr for the period ended Mar 2021, rising 0%.

Balance Sheet Statement

Cash Flow Statement

Cash Flow comments

• CashFlow from operating activities was positive.
• CashFlow from operating activities: Rs 2.0 cr for period ended Mar 2021 vis-vis Rs -1.0 cr for period ended Mar 2020

Sales Growth

Profit Growth Statement

Profit Growth Statement

Stock Price CAGR

Return of Equity

General Comments

– The stock has given a return of 989% on a 1 Year basis vis-vis a return of 83% over the last 3 Years.
– The compounded sales growth on a TTM bassis is 82% vis-vis a compounded sales growth of -4% over the last 3 Years.
– The compounded profit growth on a TTM basis is 155% vis-vis a compounded profit growth of 21% over the last 3 Years.

Ratios

Shareholding Pattern

– Public shareholding has remained largely constant. The Dec 2021 public holding stood at 44.91% vis-vis 44.91% for Sep 2021

Conclusion

– is expected to give good quarter – The company has delivered a poor sales growth of -4.61% over past five years.
-‘s cost of borrowing seems high

• 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 53.53 and is trading at 70.0, thus bullish price action wise.
• Thus, overall we retain a HOLD on the stock.

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