Mehabe score: 5 G Factor: 3 Piotski Score: 5 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 5.
Description
Uttam Sugar Mills is engaged in the manufacture of Sugar, Industrial Alcohol and Generation of Power.
Main Points
Company has a Distillery with an installed capacity of 150 KLPD. Company is establishing incineration boiler of 60TPH capacity. This will enable the company to produce ethanol throughout the year as against 270 days at present and will lead to higher production of Ethanol by 33% (appx.).Site:UTTAMSUGAR
Market Cap:
Rs 686 cr
Price:
180.0
Trading pe:
10.3x
Book-value:
80.2/share
Div yield:
0.00 %
Earning yield:
14.74%
Face-value:
10.0/share
52week high:
180.85
52week low:
71.10
Technical Analysis
Stock trades at 180.0, above its 50dma 136.79. It also trades above its 200dma 108.24. The stock remains bullish on techicals
The 52 week high is at 180.85 and the 52week low is at 71.10
Price Chart
P/E Chart
Sales and Margin
Strengths
– is expected to give good quarter
– has a good return on equity (ROE) track record: 3 Years ROE 19.58%
Weakness
– Though the company is reporting repeated profits, it is not paying out dividend
-Promoters have pledged 33.16% of their holding.
Competition
– The industry trades at a mean P/E of 14.5x. Bannari Amm.Sug. trades at the industry’s max P/E of 24.86x. UTTAMSUGAR trades at a P/E of 10.3x
– Industry’s mean G-Factor is 3.4 while the mean Piotski score is 8.0. UTTAMSUGAR has a G-Factor of 3 and Piotski scoreof 5.
– Average 1 month return for industry is 24.8%. The max 1- month return was given by Sh.Renuka Sugar: a return of 69.15 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 553.0 cr compared to Rs 557.0 cr for period ended Mar 2020, a fall of 0.7%
Operating Profits reported at Rs 84.0 cr for period ended Mar 2021 vis-vis 81.0 for period ended Mar 2020 .
Operating Margins expanded 64.8 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 7.3 compared to Rs 3.07 for previous quarter ended Dec 2020 and Rs 9.16 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 1819.0 cr for period ended Mar 2021 vis-vis sales of Rs 1645.0 cr for the period ended Mar 2020, a growth of 9.6%. The 3 year sales cagr stood at 13.5%.
Operating margins expanded to 12.0% for period ended Mar 2021 vis-vis 11.0% for period ended Mar 2020, expansion of 100.0 bps.
Net Profit reported at Rs 60.0 cr for period ended Mar 2021 vis-vis sales of Rs 52.0 cr for the period ended Mar 2020, rising 13.3%.
Company recorded a healthy Net Profit CAGR of 52.3% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has had stable/constant Return on Equity (RoE) metric. The RoE on Last Year basis was 20.0% compared to 20.0% over the last 3 Years. – The stock has given a return of 132% on a 1 Year basis vis-vis a return of 30% over the last 3 Years. – The compounded sales growth on a TTM bassis is 28% vis-vis a compounded sales growth of 15% over the last 3 Years. – The compounded profit growth on a TTM basis is 54% vis-vis a compounded profit growth of -23% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Mar 2021 public holding stood at 24.99% vis-vis 24.99% for Dec 2020
Conclusion
– is expected to give good quarter
– has a good return on equity (ROE) track record: 3 Years ROE 19.58% – Though the company is reporting repeated profits, it is not paying out dividend
-Promoters have pledged 33.16% of their holding.
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 136.79 and is trading at 180.0 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
