Mehabe score: 6 G Factor: 5 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 5 and Piotski score of 6.
Description
Vardhman Acrylics is a leading manufacturer and supplier of Acrylic Fibre and Tow.Site:VARDHACRLCMain Symbol:www.nseindia.com
Stock trades at 62.8, above its 50dma 51.01. It also trades above its 200dma 41.12. The stock remains bullish on techicals
The 52 week high is at 67.50 and the 52week low is at 27.40
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
– is almost debt free.
Weakness
– Though the company is reporting repeated profits, it is not paying out dividend
-The company has delivered a poor sales growth of -7.96% over past five years.
– has a low return on equity of 11.80% for last 3 years.
Competition
– The industry trades at a mean P/E of 17.5x. SRF trades at the industry’s max P/E of 37.87x. VARDHACRLC trades at a P/E of 11.8x
– Industry’s mean G-Factor is 5.4 while the mean Piotski score is 7.0. VARDHACRLC has a G-Factor of 5 and Piotski scoreof 6.
– Average 1 month return for industry is 20.9%. The max 1- month return was given by Surat Textile: a return of 87.47 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 47.46 cr compared to Rs 33.97 cr for period ended Jun 2020, a rise of 39.7%
Operating Profits reported at Rs 10.69 cr for period ended Jun 2021 vis-vis 2.01 for period ended Jun 2020 .
Operating Margins expanded 1660.7 bps for period ended Jun 2021 vis-vis Jun 2020 .
The EPS for Jun 2021 was Rs 0.95 compared to Rs 2.85 for previous quarter ended Mar 2021 and Rs 0.06 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 309.0 cr for period ended TTM vis-vis sales of Rs 296.0 cr for the period ended Mar 2021, a growth of 4.2%. The 3 year sales cagr stood at -7.6%.
Operating margins expanded to 23.0% for period ended TTM vis-vis 21.0% for period ended Mar 2021, expansion of 200.0 bps.
Net Profit reported at Rs 50.0 cr for period ended TTM vis-vis sales of Rs 43.0 cr for the period ended Mar 2021, rising 14.0%.
Company recorded a healthy Net Profit CAGR of 13.7% 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 39.0 cr for period ended Mar 2021 vis-vis Rs 4.0 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 had stable/constant Return on Equity (RoE) metric. The RoE on Last Year basis was 11.0% compared to 12.0% over the last 3 Years. – The stock has given a return of 109% on a 1 Year basis vis-vis a return of 13% over the last 3 Years. – The compounded sales growth on a TTM bassis is -12% vis-vis a compounded sales growth of -3% over the last 3 Years. – The compounded profit growth on a TTM basis is -7% vis-vis a compounded profit growth of 4% over the last 3 Years.
Ratios
Conclusion
– has reduced debt.
– is almost debt free. – Though the company is reporting repeated profits, it is not paying out dividend
-The company has delivered a poor sales growth of -7.96% over past five years.
– has a low return on equity of 11.80% for last 3 years.
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 51.01 and is trading at 62.8, thus bullish price action wise.
