PRICOL LTD - FUNDAMENTAL & TECHNICAL - WONDERFUL OPPORTUNITY
Pricol Limited is engaged in the business of manufacturing and selling of instrument clusters and other allied automobile components to OEMs and replacement markets. Presently, the company operates 9 manufacturing facilities across India and 1 in Indonesia. The company has high concentration in 2W industry as it derives ~70% of revenues from this segment alone. Company's product portfolio includes Driver information system (DIS) clusters, sensors & switches, pumps & mechanicals products, telematics (connected vehicle solutions) & auto electrical products. The business was started in 1974 and is headquartered in Coimbatore, Tamil Nadu.
FUNDAMENTALS:
> It is a Small Cap company with a market cap of just Rs.1,251 Cr.
> The ROCE and ROE is at 15% and 9% respectively which is good. Positive.
> Book Value to Market Value ratio is 2.4 which means the company have overall stable fundamentals.
> Stock P/E is at 30 which makes the valuation attractive as compared to the sector P/E at 33. Positive.
> Higher than Industry Revenue Growth: Over the last 5 years, revenue has grown at a yearly rate of 63.3%, vs industry avg of 6.31%. Positive.
> Increasing Market Share: Over the last 5 years, market share increased from 0.09% to 0.81%. Positive.
> Higher than Industry Net Income: Over the last 5 years, net income has grown at a yearly rate of 35.93%, vs industry avg of -8.67%. Positive.
> Stable Topline and Bottomline, continuously increasing on QoQ basis.
> Debts: The company have Debts of Rs . 186 Cr as per Mar 21 Balance Sheet which is much below the acceptable limits as compared to Reserves.
> Reserves: It is Rs.511 Cr as per Mar 21 Balance Sheet.
> OPM is consistently growing in last 3 years, it is at 12% as per Mar 21 Balance Sheet.
> Promoters holding is intact at 36.53% since last 10 years, like they trust their own business and staying invested.
> One thing very amazing about this company is FIIs are heavily invested in the company and they are constantly increasing the stake.
TECHNICALS:
> The stock has taken long 3.5 years to make a wonderful rounding bottom pattern after taking support at Rs.23 levels. It has given breakout recently with huge volume.
> On the chart stock is continuously in UPTREND since March 2020 Covid fall.
> Increasing Long Volume towers as indicated by blue arrows at the bottom indicates that lot of accumulation is going on in the stock continuously.
> Trading above 100 and 200 DMAs this talks about the strength in the bull run of this stock.
Company's massive client base includes all big and small names in the industry. Few of them are Hero Motocorp, TVS Motors, Bajaj Auto, Ashok Leyland, Tata Motors, Suzuki, Volkswagen, Eicher, Tata, Toyota, TVS, Bajaj, BMW, Harley-Davidson, Mercedes-Benz, Mahindra, JCB, L&T and many others.
Company financials are not very strong on YoY basis but if we look closely at the QoQ basis it looks like a turnaround story. The company is making come back with a big bang. Now if we look at the market from broader perspective, Automobile industry is in good momentum specially all small and midcap Auto Ancillary business. The company have massive client base.
Fresh Buy - AT CMP i.e. Rs.102
Old Buy – Hold
Target – Hold for at least 2X, i.e. more than Rs.200.
Risk Management Tip: Never invest more than 5% of your capital in any single stock.
Happy Investing!
ShareMktSchool
FUNDAMENTALS:
> It is a Small Cap company with a market cap of just Rs.1,251 Cr.
> The ROCE and ROE is at 15% and 9% respectively which is good. Positive.
> Book Value to Market Value ratio is 2.4 which means the company have overall stable fundamentals.
> Stock P/E is at 30 which makes the valuation attractive as compared to the sector P/E at 33. Positive.
> Higher than Industry Revenue Growth: Over the last 5 years, revenue has grown at a yearly rate of 63.3%, vs industry avg of 6.31%. Positive.
> Increasing Market Share: Over the last 5 years, market share increased from 0.09% to 0.81%. Positive.
> Higher than Industry Net Income: Over the last 5 years, net income has grown at a yearly rate of 35.93%, vs industry avg of -8.67%. Positive.
> Stable Topline and Bottomline, continuously increasing on QoQ basis.
> Debts: The company have Debts of Rs . 186 Cr as per Mar 21 Balance Sheet which is much below the acceptable limits as compared to Reserves.
> Reserves: It is Rs.511 Cr as per Mar 21 Balance Sheet.
> OPM is consistently growing in last 3 years, it is at 12% as per Mar 21 Balance Sheet.
> Promoters holding is intact at 36.53% since last 10 years, like they trust their own business and staying invested.
> One thing very amazing about this company is FIIs are heavily invested in the company and they are constantly increasing the stake.
TECHNICALS:
> The stock has taken long 3.5 years to make a wonderful rounding bottom pattern after taking support at Rs.23 levels. It has given breakout recently with huge volume.
> On the chart stock is continuously in UPTREND since March 2020 Covid fall.
> Increasing Long Volume towers as indicated by blue arrows at the bottom indicates that lot of accumulation is going on in the stock continuously.
> Trading above 100 and 200 DMAs this talks about the strength in the bull run of this stock.
Company's massive client base includes all big and small names in the industry. Few of them are Hero Motocorp, TVS Motors, Bajaj Auto, Ashok Leyland, Tata Motors, Suzuki, Volkswagen, Eicher, Tata, Toyota, TVS, Bajaj, BMW, Harley-Davidson, Mercedes-Benz, Mahindra, JCB, L&T and many others.
Company financials are not very strong on YoY basis but if we look closely at the QoQ basis it looks like a turnaround story. The company is making come back with a big bang. Now if we look at the market from broader perspective, Automobile industry is in good momentum specially all small and midcap Auto Ancillary business. The company have massive client base.
Fresh Buy - AT CMP i.e. Rs.102
Old Buy – Hold
Target – Hold for at least 2X, i.e. more than Rs.200.
Risk Management Tip: Never invest more than 5% of your capital in any single stock.
Happy Investing!
ShareMktSchool