Mehabe score: 8 G Factor: 7 Piotski Score: 8 The stock has a rating STRONG BUY. 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 7 and Piotski score of 8.
Description
Tata Steel Long Products is engaged in the Business of Manufacture of basic iron & steel.Site:TATASTLLPMain Symbol:TATASTLLP
Stock trades at 1120.0, above its 50dma 937.62. It also trades above its 200dma 729.29. The stock remains bullish on techicals
The 52 week high is at 1106.05 and the 52week low is at 245.00
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
– is expected to give good quarter
– has delivered good profit growth of 77.79% CAGR over last 5 years
Weakness
– has a low return on equity of 6.96% for last 3 years.
Competition
– The industry trades at a mean P/E of 10.2x. Lloyds Metals trades at the industry’s max P/E of 11714.15x. TATASTLLP trades at a P/E of 4.88x
– Industry’s mean G-Factor is 5.4 while the mean Piotski score is 8.0. TATASTLLP has a G-Factor of 7 and Piotski scoreof 8.
– Average 1 month return for industry is 10.4%. The max 1- month return was given by Jai Balaji Inds.: a return of 37.67 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 1688.0 cr compared to Rs 653.0 cr for period ended Jun 2020, a rise of 158.5%
Operating Profits reported at Rs 520.0 cr for period ended Jun 2021 vis-vis 7.0 for period ended Jun 2020 .
Operating Margins expanded 2973.4 bps for period ended Jun 2021 vis-vis Jun 2020 .
The EPS for Jun 2021 was Rs 73.53 compared to Rs 75.36 for previous quarter ended Mar 2021 and Rs -29.12 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 5784.0 cr for period ended TTM vis-vis sales of Rs 4750.0 cr for the period ended Mar 2021, a healthy growth of 17.9%. The 3 year sales cagr stood at 80.0%.
Operating margins expanded to 28.0% for period ended TTM vis-vis 23.0% for period ended Mar 2021, expansion of 500.0 bps.
Net Profit reported at Rs 1035.0 cr for period ended TTM vis-vis sales of Rs 572.0 cr for the period ended Mar 2021, rising 44.7%.
Company recorded a healthy Net Profit CAGR of 102.8% 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 1690.0 cr for period ended Mar 2021 vis-vis Rs -336.0 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 improved its Return on Equity (RoE) metric. The RoE on Last Year basis was 25.0% compared to 7.0% over the last 3 Years. – The stock has given a return of 330% on a 1 Year basis vis-vis a return of 11% over the last 3 Years. – The compounded sales growth on a TTM bassis is 68% vis-vis a compounded sales growth of 81% over the last 3 Years. – The compounded profit growth on a TTM basis is 339% vis-vis a compounded profit growth of 60% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2021 fii holding stood at 0.42% vis-vis 0.32% for Dec 2020 – Public shareholding has remained largely constant. The Mar 2021 public holding stood at 19.12% vis-vis 19.69% for Dec 2020
Conclusion
– has reduced debt.
– is expected to give good quarter
– has delivered good profit growth of 77.79% CAGR over last 5 years – has a low return on equity of 6.96% for last 3 years.
Fundamentally, the stock remains a Strong ‘BUY’ in our long term portoflio.
Technically too, the stock is a Strong ‘BUY’ in our long term portoflio.The stock remains above its 50 DMA 937.62 and is trading at 1120.0
Thus, overall, we retain a STRONG BUY on the stock. Any dips can be used to build positions.
