Mehabe score: 5 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
TVS Srichakra, incorporated in 1982, is part of the TVS automotive-ancillary group. It is a manufacturer and exporter of Two and Three-Wheeler tyres and Off-Highway tyres. It is a major OEM supplier to TVS motors and many other leading brands. #
Main Points
Business Segment
The company’s product portfolio includes tyres for 2/3-wheeler, Industrial Pneumatic, Farm and Implement, Skid-steer, Multi-purpose, etc. #Site:TVSSRICHAKMain Symbol:TVSSRICHAK
Stock trades at 2258.0, above its 50dma 2104.04. It also trades above its 200dma 1887.28. The stock remains bullish on techicals
The 52 week high is at 2394.00 and the 52week low is at 1324.80
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
– has been maintaining a healthy dividend payout of 26.52%
Weakness
– The company has delivered a poor sales growth of -2.36% over past five years.
– has a low return on equity of 11.76% for last 3 years.
-‘s cost of borrowing seems high
Competition
– The industry trades at a mean P/E of 19.3x. Balkrishna Inds trades at the industry’s max P/E of 41.5x. TVSSRICHAK trades at a P/E of 23.4x
– Industry’s mean G-Factor is 5.3 while the mean Piotski score is 8.0. TVSSRICHAK has a G-Factor of 6 and Piotski scoreof 6.
– Average 1 month return for industry is 3.9%. The max 1- month return was given by JK Tyre & Indust: a return of 13.72 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 495.26 cr compared to Rs 212.14 cr for period ended Jun 2020, a rise of 133.5%
Company reported operating profit of Rs 26.26 cr for period ended Jun 2021, operating profit margin at 5.3 %.
Operating profit was negative for the same period last year thus company has improved its margins this year
The EPS for Jun 2021 was Rs 1.45 compared to Rs 45.75 for previous quarter ended Mar 2021 and Rs -48.62 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 2222.0 cr for period ended TTM vis-vis sales of Rs 1939.0 cr for the period ended Mar 2021, a healthy growth of 12.7%. The 3 year sales cagr stood at -3.0%.
Net Profit reported at Rs 112.0 cr for period ended TTM vis-vis sales of Rs 74.0 cr for the period ended Mar 2021, rising 33.9%.
Company recorded a Net Profit CAGR of 2.8% 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 307.0 cr for period ended Mar 2021 vis-vis Rs 298.0 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 59% 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 -8% vis-vis a compounded sales growth of -3% over the last 3 Years. – The compounded profit growth on a TTM basis is -10% vis-vis a compounded profit growth of -14% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Jun 2021 fii holding stood at 1.97% vis-vis 1.49% for Mar 2021 – Public shareholding has remained largely constant. The Jun 2021 public holding stood at 49.7% vis-vis 47.88% for Mar 2021
Conclusion
– has reduced debt.
– has been maintaining a healthy dividend payout of 26.52% – The company has delivered a poor sales growth of -2.36% over past five years.
– has a low return on equity of 11.76% for last 3 years.
-‘s cost of borrowing seems high
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 2104.04 and is trading at 2258.0, thus bullish price action wise.
