SHANKARA BLDG PRODUCT LTDPanjang
Breakout coming in Shankara Building?
Telah dikemas kini
1. Buy or Sell at your own risk
2. Don't risk more than 1%-2% of your capital as stop loss
3. Position Size formula:- Stop Loss/(Buy Price-Initial Stop Loss Price)
4. First sell on initial stop loss hit or close below supertrend
SHANKARA made a double top in the Rs.685-Rs.690 zone. Average volume has gone up quite a bit in last few days, and the stock was in a consolidation since Aug' 21. It can give a good volume breakout soon. Only positive for this counter is TTM sales growth of 10% and TTM profit growth of 112%. Debt also coming down since Mar'20.
This view from CRISIL shows the current position and future prospects for the company: -
Strengths:
Established market position and extensive experience of the promoter:
The group's longstanding presence of over three decades in the building materials industry, its wide network of dealers, 90 retail outlets and the in-house pipe and color-coated roofing sheet processing capacity, will continue to support the business risk profile. The promoter has around three decades of experience in the building materials industry and is assisted by a competent second line of management.
Diversified product offering and longstanding association with vendors:
Healthy relationships with suppliers such as JSW Steel Ltd, TATA Steel Ltd, Sintex Industries Ltd, Uttam Galva Steels Ltd, APL Apollo Tubes Ltd ,Kajaria Ceramics Ltd, and Cera Sanitaryware Ltd etc enables the group to offer a diverse range of building materials, and provides a competitive edge.
Moderate financial risk profile:
Networth is strong at Rs 507crore and total outside liabilities to tangible net worth ratio is comfortable at 0.8 times as on March 31, 2021. However financial risk profile is constrained by average debt protection metrics with interest coverage of 2.28 times and net cash accruals to adjusted debt ratio of 0.13 times for fiscal 2021. Financial risk profile is expected to improve over the medium term supported by steady accretion to reserves and gradual reduction in debt levels
Weaknesses:
Susceptibility of demand to economic cycles:
The group remains exposed to fluctuation in demand for real estate and home improvement. Revenues declined to Rs.2048 crore for fiscal 2021 from Rs.2639 crore for fiscal 2020 on account of lockdown led restrictions to curb the spread of Covid-19 resulting in lower footfalls in its retail stores. Nevertheless, turnover is expected to improve gradually from fiscal 2022 aided by improvement in construction activity resulting in improved demand.
Exposure to fluctuations in input prices:
As with any retail business, operating margin remains modest. The operating profitability has been volatile in the range of 3.6 to 7 percent over the last four years ended fiscal 2021 on account of fluctuation in steel prices. The operating profitability for fiscal 2022 is expected to remain in the range of 3.5 to 4 percent.
Liquidity: Adequate
Liquidity remains adequate, characterized by sufficient cushion in the bank lines and low repayment obligations. Bank limit utilization is moderate at around 70 percent for the 9 month ended September 2021. Cash accrual of around Rs.40-45 crore is expected to be adequate to meet repayment obligations of around Rs.7-8 crore. There are no debt funded capital expenditure plans over the medium term. Further, the available cushion in bank limit should be adequate to meet the incremental working capital needs over the medium term.
I guess if breakout happens and market moves up or even if stays rangebound, it will rise and will fetch good returns, so keep an eye on this counter
2. Don't risk more than 1%-2% of your capital as stop loss
3. Position Size formula:- Stop Loss/(Buy Price-Initial Stop Loss Price)
4. First sell on initial stop loss hit or close below supertrend
SHANKARA made a double top in the Rs.685-Rs.690 zone. Average volume has gone up quite a bit in last few days, and the stock was in a consolidation since Aug' 21. It can give a good volume breakout soon. Only positive for this counter is TTM sales growth of 10% and TTM profit growth of 112%. Debt also coming down since Mar'20. This view from CRISIL shows the current position and future prospects for the company: -
Strengths:
Established market position and extensive experience of the promoter:
The group's longstanding presence of over three decades in the building materials industry, its wide network of dealers, 90 retail outlets and the in-house pipe and color-coated roofing sheet processing capacity, will continue to support the business risk profile. The promoter has around three decades of experience in the building materials industry and is assisted by a competent second line of management.
Diversified product offering and longstanding association with vendors:
Healthy relationships with suppliers such as JSW Steel Ltd, TATA Steel Ltd, Sintex Industries Ltd, Uttam Galva Steels Ltd, APL Apollo Tubes Ltd ,Kajaria Ceramics Ltd, and Cera Sanitaryware Ltd etc enables the group to offer a diverse range of building materials, and provides a competitive edge.
Moderate financial risk profile:
Networth is strong at Rs 507crore and total outside liabilities to tangible net worth ratio is comfortable at 0.8 times as on March 31, 2021. However financial risk profile is constrained by average debt protection metrics with interest coverage of 2.28 times and net cash accruals to adjusted debt ratio of 0.13 times for fiscal 2021. Financial risk profile is expected to improve over the medium term supported by steady accretion to reserves and gradual reduction in debt levels
Weaknesses:
Susceptibility of demand to economic cycles:
The group remains exposed to fluctuation in demand for real estate and home improvement. Revenues declined to Rs.2048 crore for fiscal 2021 from Rs.2639 crore for fiscal 2020 on account of lockdown led restrictions to curb the spread of Covid-19 resulting in lower footfalls in its retail stores. Nevertheless, turnover is expected to improve gradually from fiscal 2022 aided by improvement in construction activity resulting in improved demand.
Exposure to fluctuations in input prices:
As with any retail business, operating margin remains modest. The operating profitability has been volatile in the range of 3.6 to 7 percent over the last four years ended fiscal 2021 on account of fluctuation in steel prices. The operating profitability for fiscal 2022 is expected to remain in the range of 3.5 to 4 percent.
Liquidity: Adequate
Liquidity remains adequate, characterized by sufficient cushion in the bank lines and low repayment obligations. Bank limit utilization is moderate at around 70 percent for the 9 month ended September 2021. Cash accrual of around Rs.40-45 crore is expected to be adequate to meet repayment obligations of around Rs.7-8 crore. There are no debt funded capital expenditure plans over the medium term. Further, the available cushion in bank limit should be adequate to meet the incremental working capital needs over the medium term.
I guess if breakout happens and market moves up or even if stays rangebound, it will rise and will fetch good returns, so keep an eye on this counter
Dagangan aktif
Nota
NEWS UPDATE: Shankara Buildcon: Promoter to sell 4.38% to APL Apollo Tubes subsidiary at Rs 755/share.
Penafian
Maklumat dan penerbitan adalah tidak dimaksudkan untuk menjadi, dan tidak membentuk, nasihat untuk kewangan, pelaburan, perdagangan dan jenis-jenis lain atau cadangan yang dibekalkan atau disahkan oleh TradingView. Baca dengan lebih lanjut di Terma Penggunaan.