Mehabe score: 5 G Factor: 2 Piotski Score: 5 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 5.
Description
Incorporated in 2017, S.M. Gold Ltd is in the business of manufacturing and wholesale trading of jewellery [1] Site:SMGOLD Main Symbol:SMGOLD
Stock trades at 349.0, above its 50dma 274.18. It also trades above its 200dma 180.07. The stock remains bullish on techicals
The 52 week high is at 359.00 and the 52week low is at 19.00
Price Chart
P/E Chart
Sales and Margin
Strengths
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Weakness
– Stock is trading at 25.19 times its book value
-Though the company is reporting repeated profits, it is not paying out dividend
– has low interest coverage ratio.
– has a low return on equity of 1.03% for last 3 years.
Competition
– The industry trades at a mean P/E of 32.8x. S.M. Gold trades at the industry’s max P/E of 1668.37x. SMGOLD trades at a P/E of 1668.0x
– Industry’s mean G-Factor is 2.9 while the mean Piotski score is 7.0. SMGOLD has a G-Factor of 2 and Piotski scoreof 5.
– Average 1 month return for industry is -5.3%. The max 1- month return was given by S.M. Gold: a return of 31.59 %
Quarterly Results
Sales for period ended Dec 2021 is Rs 20.91 cr compared to Rs 0.24 cr for period ended Jun 2020, a rise of 8612.5% .
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Company reported operating profit of Rs 0.31 cr for period ended Dec 2021 and operating profit margin at 1.5 % for same period.
The EPS for quarter ended Dec 2021 is Rs 0.09 compared to Rs 0.24 for previous quarter ended Sep 2021 and Rs -0.09 for Jun 2020.
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 61.22 cr for period ended TTM vis-vis sales of Rs 33.4 cr for the period ended Mar 2021, a healthy growth of 45.4%. The 3 year sales cagr stood at 32.5%.
Operating margins shrank to 0.05% for period ended TTM vis-vis 2.07% for period ended Mar 2021, contraction of 202.0 bps.
Net Profit reported at Rs 0.1 cr for period ended TTM vis-vis sales of Rs 0.6 cr for the period ended Mar 2021, falling 500.0%.
Company recorded a healthy Net Profit CAGR of 71.0% 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 2.0% compared to 1.0% over the last 3 Years. – The stock has given a return of 1737% on a 1 Year basis vis-vis a return of 169% over the last 3 Years. – The compounded sales growth on a TTM bassis is 15% vis-vis a compounded sales growth of 35% over the last 3 Years. – The compounded profit growth on a TTM basis is 62% vis-vis a compounded profit growth of 5% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Dec 2021 fii holding stood at 0.1% vis-vis 0.1% for Sep 2021 – Public shareholding has remained largely constant. The Dec 2021 public holding stood at 40.91% vis-vis 40.91% for Sep 2021
Conclusion
– – Stock is trading at 25.19 times its book value
-Though the company is reporting repeated profits, it is not paying out dividend
– has low interest coverage ratio.
– has a low return on equity of 1.03% 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 274.18 and is trading at 349.0 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
