Mehabe score: 1 G Factor: 1 Piotski Score: 4 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 4.
Description
Vikas Ecotech is an emerging player in the global arena engaged in the business of high-end specialty chemicals. It is an integrated, multi-specialty product solutions company, producing a wide variety of superior quality, eco-friendly additives and rubber-plastic compounds.Site:VIKASECOMain Symbol:VIKASECO
Stock trades at 2.0, above its 50dma 1.98. However it is trading below its 200dma 2.38. The stock remains weak though short term bullish momentum supports price action. It needs to close above 2.38 for bullish price action to continue
The 52 week high is at 8.40 and the 52week low is at 1.16
Price Chart
P/E Chart
Sales and Margin
Strengths
– Stock is trading at 0.90 times its book value
Weakness
– has low interest coverage ratio.
-Promoter holding has decreased over last quarter: -7.67%
-The company has delivered a poor sales growth of -17.67% over past five years.
-Promoter holding is low: 9.42%
– has a low return on equity of -1.17% for last 3 years.
-Earnings include an other income of Rs.4.56 Cr.
– has high debtors of 339.36 days.
Competition
– The industry trades at a mean P/E of 28.6x. Astral trades at the industry’s max P/E of 104.23x. VIKASECO trades at a P/E of x
– Industry’s mean G-Factor is 4.4 while the mean Piotski score is 9.0. VIKASECO has a G-Factor of 1 and Piotski scoreof 4.
– Average 1 month return for industry is 0.8%. The max 1- month return was given by Jai Corp: a return of 13.86 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 37.0 cr compared to Rs 36.0 cr for period ended Mar 2020, a rise of 2.8%
Company reported negative operating profit of Rs -4.0 cr for period ended Mar 2021. For same period last year, operating profit was -2.0
The EPS for Mar 2021 was Rs -0.17 compared to Rs 0.0 for previous quarter ended Dec 2020 and Rs -0.11 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 116.0 cr for period ended Mar 2021 vis-vis sales of Rs 192.0 cr for the period ended Mar 2020, a fall of 65.5%. The 3 year sales cagr stood at -20.7%.
Operating margins shrank to 4.0% for period ended Mar 2021 vis-vis 6.0% for period ended Mar 2020, contraction of 200.0 bps.
Net Profit reported at Rs -14.0 cr for period ended Mar 2021 vis-vis sales of Rs 1.0 cr for the period ended Mar 2020, falling 0%.
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 worsened on its Return on Equity (RoE) metric. The RoE on Last Year basis was -10.0% compared to -1.0% over the last 3 Years. – The stock has given a return of -34% on a 1 Year basis vis-vis a return of -47% over the last 3 Years. – The compounded sales growth on a TTM bassis is -40% vis-vis a compounded sales growth of -21% over the last 3 Years. – The compounded profit growth on a TTM basis is -158% vis-vis a compounded profit growth of % over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has fallen for the period ended Mar 2021. The Mar 2021 fii holding stood at 8.68% vis-vis 21.35% for Dec 2020 – Public shareholding has risen for the period ended Mar 2021. The Mar 2021 public holding stood at 79.6% vis-vis 61.56% for Dec 2020
Conclusion
– Stock is trading at 0.90 times its book value – has low interest coverage ratio.
-Promoter holding has decreased over last quarter: -7.67%
-The company has delivered a poor sales growth of -17.67% over past five years.
-Promoter holding is low: 9.42%
– has a low return on equity of -1.17% for last 3 years.
-Earnings include an other income of Rs.4.56 Cr.
– has high debtors of 339.36 days.
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 1.98 and is trading at 2.0 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
