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
Incorporated in 1972, Tanfac Industries Ltd is a joint sector company promoted by Aditya Birla Group, which holds 25% stake in the company, and Tamil Nadu Industrial Development Corporation (TIDCO). The company began commercial production in March 1985 and is amongst the leading producers of Hydrofluoric Acid and its derivatives. Site:TANFACIND Main Symbol:TANFACIND
Stock trades at 705.0, above its 50dma 580.05. It also trades above its 200dma 458.77. The stock remains bullish on techicals
The 52 week high is at 779.00 and the 52week low is at 178.00
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
– is almost debt free.
– is expected to give good quarter
– has delivered good profit growth of 48.47% CAGR over last 5 years
– has a good return on equity (ROE) track record: 3 Years ROE 41.37%
Weakness
– The company has delivered a poor sales growth of 2.10% over past five years.
Competition
– The industry trades at a mean P/E of 29.7x. Clean Science trades at the industry’s max P/E of 129.09x. TANFACIND trades at a P/E of 15.2x
– Industry’s mean G-Factor is 3.4 while the mean Piotski score is 8.0. TANFACIND has a G-Factor of 6 and Piotski scoreof 6.
– Average 1 month return for industry is 18.2%. The max 1- month return was given by Gujarat Fluoroch: a return of 29.1 %
Quarterly Results
Sales for period ended Dec 2021 is Rs 90.0 cr compared to Rs 47.0 cr for period ended Dec 2020, a rise of 91.5% .
vis-vis 18.0 for period ended Dec 2020 .
Operating Margins contracted -1496.5 bps for period ended Dec 2021 vis-vis Dec 2020.
Company reported operating profit of Rs 21.0 cr for period ended Dec 2021 and operating profit margin at 23.3 % for same period.
The EPS for quarter ended Dec 2021 is Rs 15.01 compared to Rs 10.05 for previous quarter ended Sep 2021 and Rs 10.23 for Dec 2020.
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 292.0 cr for period ended TTM vis-vis sales of Rs 148.0 cr for the period ended Mar 2021, a healthy growth of 49.3%. The 3 year sales cagr stood at 9.6%.
Operating margins expanded to 23.0% for period ended TTM vis-vis 22.0% for period ended Mar 2021, expansion of 100.0 bps.
Net Profit reported at Rs 46.0 cr for period ended TTM vis-vis sales of Rs 17.0 cr for the period ended Mar 2021, rising 63.0%.
Company recorded a Net Profit CAGR of 8.5% 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 37.0 cr for period ended Mar 2021 vis-vis Rs 22.0 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 worsened on its Return on Equity (RoE) metric. The RoE on Last Year basis was 24.0% compared to 41.0% over the last 3 Years. – The stock has given a return of 260% on a 1 Year basis vis-vis a return of 48% over the last 3 Years. – The compounded sales growth on a TTM bassis is 106% vis-vis a compounded sales growth of -3% over the last 3 Years. – The compounded profit growth on a TTM basis is 118% vis-vis a compounded profit growth of 22% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Dec 2021 fii holding stood at 0.0% vis-vis 0.19% for Sep 2021 – Public shareholding has remained largely constant. The Dec 2021 public holding stood at 48.96% vis-vis 48.78% for Sep 2021
Conclusion
– has reduced debt.
– is almost debt free.
– is expected to give good quarter
– has delivered good profit growth of 48.47% CAGR over last 5 years
– has a good return on equity (ROE) track record: 3 Years ROE 41.37% – The company has delivered a poor sales growth of 2.10% over past five years.
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 580.05 and is trading at 705.0, thus bullish price action wise.
