Mehabe score: 6 G Factor: 5 Piotski Score: 7 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 7.
Description
Tata Metaliks incorporated in 1990 as a subsidiary of Tata Steel, is one of India’s leading producers of high-quality Pig Iron (PI) and Ductile Iron Pipes (DIP).
Co. products find use in the water infrastructure industry and partly cast into PI for use in foundries. #
Main Points
Product Overview
Pig Iron (48%)
Company produces 14 primary grades and a few customized options as raw material for different types of casting applications. It is used for casting in various industries like Automotive, Agriculture, Power, Railways.Site:TATAMETALIMain Symbol:TATAMETALI
Stock trades at 1218.0, above its 50dma 1076.09. It also trades above its 200dma 849.31. The stock remains bullish on techicals
The 52 week high is at 1374.00 and the 52week low is at 462.00
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
– is almost debt free.
– has a good return on equity (ROE) track record: 3 Years ROE 23.58%
Weakness
– The company has delivered a poor sales growth of 6.63% over past five years.
Competition
– The industry trades at a mean P/E of 15.2x. Tata Metaliks trades at the industry’s max P/E of 17.5x. TATAMETALI trades at a P/E of 17.5x
– Industry’s mean G-Factor is 3.8 while the mean Piotski score is 7.0. TATAMETALI has a G-Factor of 5 and Piotski scoreof 7.
– Average 1 month return for industry is 15.9%. The max 1- month return was given by Mideast Int. Stl: a return of 32.82 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 661.0 cr compared to Rs 522.0 cr for period ended Mar 2020, a rise of 26.6%
Operating Profits reported at Rs 143.0 cr for period ended Mar 2021 vis-vis 120.0 for period ended Mar 2020 .
Operating Margins contracted -135.5 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 23.75 compared to Rs 23.81 for previous quarter ended Dec 2020 and Rs 27.43 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 1917.0 cr for period ended Mar 2021 vis-vis sales of Rs 2051.0 cr for the period ended Mar 2020, a fall of 7.0%. The 3 year sales cagr stood at 0.4%.
Operating margins expanded to 20.0% for period ended Mar 2021 vis-vis 14.0% for period ended Mar 2020, expansion of 600.0 bps.
Net Profit reported at Rs 220.0 cr for period ended Mar 2021 vis-vis sales of Rs 166.0 cr for the period ended Mar 2020, rising 24.5%.
Company recorded a healthy Net Profit CAGR of 11.4% 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 281.0 cr for period ended Mar 2021 vis-vis Rs 70.0 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 20.0% compared to 24.0% over the last 3 Years. – The stock has given a return of 138% on a 1 Year basis vis-vis a return of 22% over the last 3 Years. – The compounded sales growth on a TTM bassis is -7% vis-vis a compounded sales growth of 0% over the last 3 Years. – The compounded profit growth on a TTM basis is 32% vis-vis a compounded profit growth of 11% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2021 fii holding stood at 0.95% vis-vis 1.24% for Dec 2020 – Public shareholding has remained largely constant. The Mar 2021 public holding stood at 25.02% vis-vis 24.44% for Dec 2020
Conclusion
– has reduced debt.
– is almost debt free.
– has a good return on equity (ROE) track record: 3 Years ROE 23.58% – The company has delivered a poor sales growth of 6.63% 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 1076.09 and is trading at 1218.0, thus bullish price action wise.
