Mehabe score: 3 G Factor: 1 Piotski Score: 6 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 1 and Piotski score of 6.
Description
Vesuvius India Ltd is primarily engaged in manufacturing and trading of refractory goods. It also provides services in relation to refractory goods. It has operations in India and caters to both domestic and international markets.[1] Site:VESUVIUS Main Symbol:VESUVIUS
Stock trades at 1043.0, above its 50dma 1038.58. However it is trading below its 200dma 1084.31. The stock remains weak though short term bullish momentum supports price action. It needs to close above 1084.31 for bullish price action to continue
The 52 week high is at 1364.00 and the 52week low is at 900.00
Price Chart
P/E Chart
Sales and Margin
Strengths
– is almost debt free.
– is expected to give good quarter
– has been maintaining a healthy dividend payout of 23.76%
Weakness
– The company has delivered a poor sales growth of 4.97% over past five years.
– has a low return on equity of 8.39% for last 3 years.
Competition
– The industry trades at a mean P/E of 22.7x. RHI Magnesita trades at the industry’s max P/E of 49.57x. VESUVIUS trades at a P/E of 31.1x
– Industry’s mean G-Factor is 2.3 while the mean Piotski score is 8.0. VESUVIUS has a G-Factor of 1 and Piotski scoreof 6.
– Average 1 month return for industry is 5.1%. The max 1- month return was given by RHI Magnesita: a return of 22.46 %
Quarterly Results
Sales for period ended Dec 2021 is Rs 259.0 cr compared to Rs 234.0 cr for period ended Dec 2020, a rise of 10.7% .
vis-vis 25.0 for period ended Dec 2020 .
Operating Margins contracted -296.2 bps for period ended Dec 2021 vis-vis Dec 2020.
Company reported operating profit of Rs 20.0 cr for period ended Dec 2021 and operating profit margin at 7.7 % for same period.
The EPS for quarter ended Dec 2021 is Rs 6.47 compared to Rs 9.56 for previous quarter ended Sep 2021 and Rs 8.0 for Dec 2020.
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 1047.0 cr for period ended Dec 2021 vis-vis sales of Rs 792.0 cr for the period ended Dec 2020, a healthy growth of 24.4%. The 3 year sales cagr stood at 4.2%.
Operating margins shrank to 9.0% for period ended Dec 2021 vis-vis 10.0% for period ended Dec 2020, contraction of 100.0 bps.
Net Profit reported at Rs 68.0 cr for period ended Dec 2021 vis-vis sales of Rs 53.0 cr for the period ended Dec 2020, rising 22.1%.
Company reported a poor Net Profit CAGR of -9.9% 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 had stable/constant Return on Equity (RoE) metric. The RoE on Last Year basis was 8.0% compared to 8.0% over the last 3 Years. – The stock has given a return of 4% on a 1 Year basis vis-vis a return of -4% over the last 3 Years. – The compounded sales growth on a TTM bassis is 32% vis-vis a compounded sales growth of 4% over the last 3 Years. – The compounded profit growth on a TTM basis is 28% vis-vis a compounded profit growth of -10% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Dec 2021 fii holding stood at 0.65% vis-vis 1.94% for Sep 2021 – Public shareholding has remained largely constant. The Dec 2021 public holding stood at 18.61% vis-vis 18.63% for Sep 2021
Conclusion
– is almost debt free.
– is expected to give good quarter
– has been maintaining a healthy dividend payout of 23.76% – The company has delivered a poor sales growth of 4.97% over past five years.
– has a low return on equity of 8.39% for last 3 years.
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 1038.58 and is trading at 1043.0 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
