Mehabe score: 5 G Factor: 6 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 6 and Piotski score of 6.
Description
VST Industries is engaged inter-alia in manufacture and trading of Cigarettes, Tobacco and Tobacco products.(Source : 202003 Annual Report Page No: 93)
Main Points
Leading Cigarette Manufacturer#
Founded in the year 1930, VST Industries got its name through its founder Vazir Sultan and now they are the third-largest player in the Indian Cigarette Market with over 90 years of operations. The market share of VST Industries stands at 9% # in the legal cigarette market and 5% in the overall cigarette market in terms of value.Site:VSTINDMain Symbol:VSTIND
Stock trades at 3613.0, above its 50dma 3451.98. It also trades above its 200dma 3451.4. The stock remains bullish on techicals
The 52 week high is at 4538.20 and the 52week low is at 3119.20
Price Chart
P/E Chart
Sales and Margin
Strengths
– is almost debt free.
-Stock is providing a good dividend yield of 3.16%.
– has a good return on equity (ROE) track record: 3 Years ROE 38.04%
– has been maintaining a healthy dividend payout of 57.87%
Weakness
– The company has delivered a poor sales growth of 4.70% over past five years.
-Promoter holding is low: 32.16%
Competition
– The industry trades at a mean P/E of 13.7x. ITC trades at the industry’s max P/E of 19.05x. VSTIND trades at a P/E of 17.9x
– Industry’s mean G-Factor is 6.0 while the mean Piotski score is 7.0. VSTIND has a G-Factor of 6 and Piotski scoreof 6.
– Average 1 month return for industry is -0.2%. The max 1- month return was given by Godfrey Phillips: a return of 7.57 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 278.0 cr compared to Rs 292.0 cr for period ended Mar 2020, a fall of 4.8%
Operating Profits reported at Rs 98.0 cr for period ended Mar 2021 vis-vis 95.0 for period ended Mar 2020 .
Operating Margins expanded 271.8 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 47.16 compared to Rs 47.73 for previous quarter ended Dec 2020 and Rs 45.73 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 1111.0 cr for period ended Mar 2021 vis-vis sales of Rs 1239.0 cr for the period ended Mar 2020, a fall of 11.5%. The 3 year sales cagr stood at 5.4%.
Operating margins expanded to 37.0% for period ended Mar 2021 vis-vis 33.0% for period ended Mar 2020, expansion of 400.0 bps.
Net Profit reported at Rs 311.0 cr for period ended Mar 2021 vis-vis sales of Rs 304.0 cr for the period ended Mar 2020, rising 2.3%.
Company recorded a healthy Net Profit CAGR of 19.6% 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 36.0% compared to 38.0% over the last 3 Years. – The stock has given a return of 12% on a 1 Year basis vis-vis a return of 8% over the last 3 Years. – The compounded sales growth on a TTM bassis is -10% vis-vis a compounded sales growth of 5% over the last 3 Years. – The compounded profit growth on a TTM basis is 2% vis-vis a compounded profit growth of 20% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2021 fii holding stood at 2.8% vis-vis 3.25% for Dec 2020 – Public shareholding has remained largely constant. The Mar 2021 public holding stood at 47.5% vis-vis 47.32% for Dec 2020
Conclusion
– is almost debt free.
-Stock is providing a good dividend yield of 3.16%.
– has a good return on equity (ROE) track record: 3 Years ROE 38.04%
– has been maintaining a healthy dividend payout of 57.87% – The company has delivered a poor sales growth of 4.70% over past five years.
-Promoter holding is low: 32.16%
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 3451.98 and is trading at 3613.0, thus bullish price action wise.
