Mehabe score: 6 G Factor: 3 Piotski Score: 7 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 3 and Piotski score of 7.
Description
Trident Texofab is an India-based company engaged in manufacturing and supplying of a range of garments and textile fabrics. Site:TTFL Main Symbol:TTFL
Stock trades at 54.0, above its 50dma 51.82. It also trades above its 200dma 33.94. The stock remains bullish on techicals
The 52 week high is at 70.90 and the 52week low is at 12.55
Price Chart
P/E Chart
Sales and Margin
Strengths
– is expected to give good quarter
Weakness
– Stock is trading at 4.48 times its book value
-Though the company is reporting repeated profits, it is not paying out dividend
– has low interest coverage ratio.
-Promoter holding has decreased over last quarter: -0.40%
-The company has delivered a poor sales growth of -5.42% over past five years.
– has a low return on equity of 7.33% for last 3 years.
-Earnings include an other income of Rs.1.87 Cr.
– has high debtors of 221.35 days.
Competition
– The industry trades at a mean P/E of 47.5x. Adani Enterp. trades at the industry’s max P/E of 176.36x. TTFL trades at a P/E of 50.4x
– Industry’s mean G-Factor is 3.2 while the mean Piotski score is 8.0. TTFL has a G-Factor of 3 and Piotski scoreof 7.
– Average 1 month return for industry is 10.5%. The max 1- month return was given by Trident Texofab: a return of 19.34 %
Quarterly Results
Sales for period ended Dec 2021 is Rs 23.85 cr compared to Rs 13.96 cr for period ended Dec 2020, a rise of 70.8% .
vis-vis 0.85 for period ended Dec 2020 .
Operating Margins expanded 62.0 bps for period ended Dec 2021 vis-vis Dec 2020.
Company reported operating profit of Rs 1.6 cr for period ended Dec 2021 and operating profit margin at 6.7 % for same period.
The EPS for quarter ended Dec 2021 is Rs 0.15 compared to Rs 0.02 for previous quarter ended Sep 2021 and Rs 0.08 for Dec 2020.
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 78.86 cr for period ended TTM vis-vis sales of Rs 49.93 cr for the period ended Mar 2021, a healthy growth of 36.7%. The 3 year sales cagr stood at -3.2%.
Operating margins expanded to 6.45% for period ended TTM vis-vis 5.77% for period ended Mar 2021, expansion of 68.0 bps.
Net Profit reported at Rs 1.18 cr for period ended TTM vis-vis sales of Rs 0.35 cr for the period ended Mar 2021, rising 70.3%.
Company reported a poor Net Profit CAGR of -2.4% 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 1.96 cr for period ended Mar 2021 vis-vis Rs -2.85 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 3.0% compared to 7.0% over the last 3 Years. – The stock has given a return of 105% on a 1 Year basis vis-vis a return of 8% over the last 3 Years. – The compounded sales growth on a TTM bassis is 17% vis-vis a compounded sales growth of -16% over the last 3 Years. – The compounded profit growth on a TTM basis is 1100% vis-vis a compounded profit growth of -19% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Dec 2021 public holding stood at 32.96% vis-vis 32.56% for Sep 2021
Conclusion
– is expected to give good quarter – Stock is trading at 4.48 times its book value
-Though the company is reporting repeated profits, it is not paying out dividend
– has low interest coverage ratio.
-Promoter holding has decreased over last quarter: -0.40%
-The company has delivered a poor sales growth of -5.42% over past five years.
– has a low return on equity of 7.33% for last 3 years.
-Earnings include an other income of Rs.1.87 Cr.
– has high debtors of 221.35 days.
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 51.82 and is trading at 54.0 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
