Mehabe score: 7 G Factor: 5 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 5 and Piotski score of 6.
Description
SMS Pharmaceuticals is a global player in API manufacturing industry. The company’s products include Anti-Ulcer, Anti-fungal, Anti-migraine, Anti- Hypertensive,etc.Site:SMSPHARMAMain Symbol:SMSPHARMA
Stock trades at 193.0, above its 50dma 175.72. It also trades above its 200dma 139.62. The stock remains bullish on techicals
The 52 week high is at 199.15 and the 52week low is at 76.00
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 -1.63% over past five years.
– has a low return on equity of 13.19% for last 3 years.
– might be capitalizing the interest cost
-Debtor days have increased from 44.04 to 68.49 days.
Competition
– The industry trades at a mean P/E of 23.4x. Sequent Scien. trades at the industry’s max P/E of 70.79x. SMSPHARMA trades at a P/E of 26.1x
– Industry’s mean G-Factor is 3.8 while the mean Piotski score is 8.0. SMSPHARMA has a G-Factor of 5 and Piotski scoreof 6.
– Average 1 month return for industry is 7.4%. The max 1- month return was given by Hikal: a return of 20.33 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 171.0 cr compared to Rs 96.0 cr for period ended Mar 2020, a rise of 78.1%
Operating Profits reported at Rs 41.0 cr for period ended Mar 2021 vis-vis 14.0 for period ended Mar 2020 .
Operating Margins expanded 939.3 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 2.73 compared to Rs 2.53 for previous quarter ended Dec 2020 and Rs 0.75 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 563.0 cr for period ended Mar 2021 vis-vis sales of Rs 412.0 cr for the period ended Mar 2020, a healthy growth of 26.8%. The 3 year sales cagr stood at 6.7%.
Operating margins expanded to 22.0% for period ended Mar 2021 vis-vis 19.0% for period ended Mar 2020, expansion of 300.0 bps.
Net Profit reported at Rs 63.0 cr for period ended Mar 2021 vis-vis sales of Rs 32.0 cr for the period ended Mar 2020, rising 49.2%.
Company recorded a healthy Net Profit CAGR of 25.3% 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 90.0 cr for period ended Mar 2021 vis-vis Rs 40.0 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 126% on a 1 Year basis vis-vis a return of 39% over the last 3 Years. – The compounded sales growth on a TTM bassis is 37% vis-vis a compounded sales growth of 7% over the last 3 Years. – The compounded profit growth on a TTM basis is 98% vis-vis a compounded profit growth of 25% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Jun 2021 fii holding stood at 0.91% vis-vis 0.56% for Mar 2021 – Public shareholding has remained largely constant. The Jun 2021 public holding stood at 31.79% vis-vis 32.15% for Mar 2021
Conclusion
– is expected to give good quarter – The company has delivered a poor sales growth of -1.63% over past five years.
– has a low return on equity of 13.19% for last 3 years.
– might be capitalizing the interest cost
-Debtor days have increased from 44.04 to 68.49 days.
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 175.72 and is trading at 193.0, thus bullish price action wise.
