Mehabe score: 4 G Factor: 3 Piotski Score: 3 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 3.
Description
Valiant Organics is engaged in the business of Manufacturing of chemicals for Agro Intermediate and Pharma.Site:VALIANTORGMain Symbol:VALIANTORG
Stock trades at 1425.0, above its 50dma 1398.23. It also trades above its 200dma 1402.09. The stock remains bullish on techicals
The 52 week high is at 1991.00 and the 52week low is at 1121.00
Price Chart
P/E Chart
Sales and Margin
Strengths
– has delivered good profit growth of 62.03% CAGR over last 5 years
– has a good return on equity (ROE) track record: 3 Years ROE 38.95%
-‘s median sales growth is 25.07% of last 10 years
Weakness
– Stock is trading at 7.70 times its book value
-Promoter holding has decreased over last quarter: -1.09%
– might be capitalizing the interest cost
Competition
– The industry trades at a mean P/E of 27.2x. Clean Science trades at the industry’s max P/E of 113.21x. VALIANTORG trades at a P/E of 33.2x
– Industry’s mean G-Factor is 3.4 while the mean Piotski score is 8.0. VALIANTORG has a G-Factor of 3 and Piotski scoreof 3.
– Average 1 month return for industry is 5.0%. The max 1- month return was given by Solar Industries: a return of 27.17 %
Quarterly Results
Sales for period ended Sep 2021 is Rs 213.0 cr compared to Rs 132.0 cr for period ended Sep 2020, a rise of 61.4%
Operating Profits reported at Rs 37.0 cr for period ended Sep 2021 vis-vis 36.0 for period ended Sep 2020 .
Operating Margins contracted -990.2 bps for period ended Sep 2021 vis-vis Sep 2020 .
The EPS for Sep 2021 was Rs 7.92 compared to Rs 9.81 for previous quarter ended Jun 2021 and Rs 11.14 for Sep 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 727.0 cr for period ended TTM vis-vis sales of Rs 574.0 cr for the period ended Mar 2021, a healthy growth of 21.0%. The 3 year sales cagr stood at 6.3%.
Operating margins shrank to 21.0% for period ended TTM vis-vis 27.0% for period ended Mar 2021, contraction of 600.0 bps.
Net Profit reported at Rs 107.0 cr for period ended TTM vis-vis sales of Rs 115.0 cr for the period ended Mar 2021, falling 7.5%.
Company reported a poor Net Profit CAGR of -4.0% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
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 26.0% compared to 39.0% over the last 3 Years. – The stock has given a return of -14% on a 1 Year basis vis-vis a return of 36% over the last 3 Years. – The compounded sales growth on a TTM bassis is 21% vis-vis a compounded sales growth of 68% over the last 3 Years. – The compounded profit growth on a TTM basis is 9% vis-vis a compounded profit growth of 93% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Sep 2021 fii holding stood at 1.93% vis-vis 1.85% for Jun 2021 – Public shareholding has remained largely constant. The Sep 2021 public holding stood at 55.58% vis-vis 54.59% for Jun 2021
Conclusion
– has delivered good profit growth of 62.03% CAGR over last 5 years
– has a good return on equity (ROE) track record: 3 Years ROE 38.95%
-‘s median sales growth is 25.07% of last 10 years – Stock is trading at 7.70 times its book value
-Promoter holding has decreased over last quarter: -1.09%
– might be capitalizing the interest cost
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 1398.23 and is trading at 1425.0 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
