Prime Stock recommendation: From Tonnage to Technology

1. 

   mewadasheetal2013

   June 24, 2022 at 7:09 pm

   Dear Sir
   Very nice article

   I have one query Average working day is 90 but in 2022 it increases 178 days as per screener.
   1. 

      N V Chandrachoodamani

      June 24, 2022 at 11:38 pm

      Welcome your query sir

      It appears like the methodology on inventory days in the database you are looking at is a bit different (Cost of goods sold instead of sales).

      Kindly look at the balance sheet data on actual inventory with FY19 numbers as base (when Co did same sales as in FY22)

      Closing inventory in FY22 is 40% high from that base, but as we know metal prices were high in March/April and this may be passed on to sales in next two quarters. We will see normalization in FY23

      Thank you
      1. 

         mewadasheetal2013

         June 25, 2022 at 1:40 pm

         Thanks Sir
2. 

   Jaydeep Kulkarni

   June 22, 2022 at 12:01 pm

   Hello Sir. But in your stock rankings, you have given as low ranking as 20, 35 and 60.
   1. 

      N V Chandrachoodamani

      June 22, 2022 at 12:17 pm

      Welcome your query sir

      Here you can see that the valuation score is quite good while the growth and quality scores are poor
      This is because of the slump in sales and profit growth during the last 3 years due to cyclical down turn in auto and also due to Covid
      (pl see the parameters used for those scores)

      The company has recovered fully from this slump in FY22 where it just surpassed its peak sales and profitability that it achieved in FY19
      As earnings for FY23 comes, these scores (growth and quality) will get much better for the company while we are making the stock call early.

      Also refer to the Dupont analysis in report where the Co has maintained healthy RoE record during the last 10 years, barring these two tough years

      Thank you

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