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Last Updated on: 14 November, 2024
Author: Getaka|Social: Getaka Financial Services X (Earlier Twitter) Profile Getaka Financial Services LinkedIn Logo

Pennar Industries Ltd: Intrinsic Value and Fundamental Analysis

Share Price and Basic Stock Data

Last Updated: November 10, 2024, 11:10 am

Market Cap 2,615 Cr.
Current Price 194
High / Low215/102
Stock P/E25.4
Book Value 65.0
Dividend Yield0.00 %
ROCE15.7 %
ROE11.8 %
Face Value 5.00
PEG Ratio1.71

Stock P/E, Current Price, and Intrinsic Value Over Time

View Share Price Target for Pennar Industries Ltd

Competitors of Pennar Industries Ltd

Stock NameMarket CapCurrent PriceHigh / LowStock P/EBook ValueDividend YieldROCEROEFace Value
Heera Ispat Ltd 5.17 Cr. 8.8212.2/5.70 0.170.00 %150 %% 10.0
Pennar Industries Ltd 2,615 Cr. 194215/10225.4 65.00.00 %15.7 %11.8 % 5.00
Mahamaya Steel Industries Ltd 366 Cr. 223229/75.272.0 86.00.00 %7.04 %4.24 % 10.0
Industry Average1,490.50 Cr141.9448.7050.390.00%57.58%8.02%8.33

All Competitor Stocks of Pennar Industries Ltd

Quarterly Result

MonthDec 2020Mar 2021Jun 2021Sep 2021Dec 2021Mar 2022Jun 2022Sep 2022Dec 2022Mar 2023Jun 2023Sep 2023Dec 2023
Sales412557488552533693700834692668749814745
Expenses379511451511490642655788634600687744669
Operating Profit33463840435145465868627076
OPM %8%8%8%7%8%7%6%6%8%10%8%9%10%
Other Income52933471116821266
Interest22181820192122252223283031
Depreciation12121313131516161617161718
Profit before tax345911142219222831293033
Tax %20%25%30%26%24%23%25%24%23%22%26%25%23%
Net Profit33468111714162124222225
EPS in Rs0.192.360.450.570.751.161.001.241.581.731.621.671.88

Last Updated: Unknown

Quarterly Chart

Profit & Loss - Annual Report

Last Updated: Unknown

MonthMar 2013Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023Mar 2024
Sales1,1151,1251,3131,3561,5411,7682,1332,1071,5252,2662,8953,131
Expenses1,0021,0351,1951,2081,3871,5621,9591,9371,4322,0942,6732,858
Operating Profit1139011814815420617516993171221273
OPM %10%8%9%11%10%12%8%8%6%8%8%9%
Other Income5433829252039173340
Interest3126363862677583807891115
Depreciation181918192529284348546566
Profit before tax6948679475138976345698131
Tax %34%36%35%38%33%34%31%15%22%25%23%25%
Net Profit46314358509067533427598
EPS in Rs3.432.152.983.642.877.435.523.650.182.945.597.29
Dividend Payout %29%0%0%0%0%0%0%0%0%0%0%0%

Profit & Loss Yearly Chart

YoY Net Profit Growth

Year2013-20142014-20152015-20162016-20172017-20182018-20192019-20202020-20212021-20222022-20232023-2024
YoY Net Profit Growth (%)-32.61%38.71%34.88%-13.79%80.00%-25.56%-20.90%-94.34%1300.00%78.57%30.67%
Change in YoY Net Profit Growth (%)0.00%71.32%-3.83%-48.68%93.79%-105.56%4.66%-73.44%1394.34%-1221.43%-47.90%

Pennar Industries Ltd has shown an inconsistent trend in YoY Net Profit Growth (%) in the last 11 years from 2013-2014 to 2023-2024.

Growth

Compounded Sales Growth
10 Years:11%
5 Years:8%
3 Years:27%
TTM:4%
Compounded Profit Growth
10 Years:14%
5 Years:8%
3 Years:119%
TTM:21%
Stock Price CAGR
10 Years:11%
5 Years:45%
3 Years:77%
1 Year:68%
Return on Equity
10 Years:8%
5 Years:7%
3 Years:9%
Last Year:12%

Last Updated: Unknown

Balance Sheet

Last Updated: Unknown

MonthMar 2013Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023Mar 2024
Equity Capital616060606076767371716767
Reserves278311342454416528591628625664711809
Borrowings172161198267299355445490618646685785
Other Liabilities243300332644709553631663579760855978
Total Liabilities7548329311,4251,4841,5121,7441,8531,8932,1412,3182,640
Fixed Assets235268282464441342454626603644721697
CWIP171333122711833617618218
Investments32626333569524518452722
Other Assets4995266209259961,0731,1201,1491,2111,3761,5521,704
Total Assets7548329311,4251,4841,5121,7441,8531,8932,1412,3182,640

Reserves and Borrowings Chart

Cash Flow

MonthMar 2013Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023Mar 2024
Cash from Operating Activity 888430205-19-2174191-43195244225
Cash from Investing Activity -27-72-30-26841-39-204-72-6-98-26-256
Cash from Financing Activity -43-35-4115-211613-9543-92-113-22
Net Cash Flow19-23-3511-26-1824-54105-53

Free Cash Flow

MonthMar 2013Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023Mar 2024
Free Cash Flow-59.00-71.00-80.00-119.00-145.00-149.00-270.00-321.00-525.00-475.00-464.00-512.00

Free Cash Flow = Income Generated from Operational Activities - Borrowings - Capital Work in Progress (CWIP)

Consistent positive free cash flow is crucial for businesses as it indicates their ability to generate cash from their core operations. It provides financial flexibility, allowing companies to invest in growth opportunities, pay dividends to shareholders, reduce debt, and weather economic downturns more effectively.

Free Cash Flow Chart

Financial Efficiency Indicators

MonthMar 2013Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023Mar 2024
Debtor Days76819410382837969102684658
Inventory Days829388116157147122128193167159155
Days Payable548885196173125125139176142118149
Cash Conversion Cycle104869824661047657120948664
Working Capital Days7879915465957356137835963
ROCE %19%13%17%18%16%21%17%13%5%10%13%

Financial Efficiency Indicators Chart

Share Holding Pattern

MonthDec 2021Mar 2022Jun 2022Sep 2022Dec 2022Mar 2023Jun 2023Sep 2023Dec 2023Mar 2024Jun 2024Sep 2024
Promoters37.69%37.71%38.20%39.75%39.75%39.75%39.75%39.75%39.75%39.62%39.63%39.67%
FIIs0.36%0.20%0.14%0.65%4.08%4.86%4.25%4.69%4.31%4.62%4.86%4.81%
DIIs0.00%0.00%0.00%0.00%0.00%0.03%0.00%0.10%0.35%0.27%0.32%1.48%
Public61.94%62.09%61.66%59.60%56.18%55.37%56.01%55.47%55.59%55.48%55.18%54.04%
No. of Shareholders62,54062,30659,59455,53155,14660,97564,18483,31887,16593,94093,68485,000

Shareholding Pattern Chart

No. of Shareholders

This stock is not held by any mutual fund

ROCE Trend

EPS Trend

Key Financial Ratios

MonthMar 24Mar 23Mar 22Mar 21Mar 20
FaceValue5.005.005.005.005.00
Basic EPS (Rs.)7.295.492.940.183.51
Diluted EPS (Rs.)7.295.492.940.183.51
Cash EPS (Rs.)12.2210.406.763.596.62
Book Value[Excl.RevalReserv]/Share (Rs.)65.0357.7351.7849.0148.26
Book Value[Incl.RevalReserv]/Share (Rs.)65.0357.7351.7849.0148.26
Revenue From Operations / Share (Rs.)232.00214.51159.38107.30145.04
PBDIT / Share (Rs.)23.2218.8713.257.8413.04
PBIT / Share (Rs.)18.2914.059.454.4610.09
PBT / Share (Rs.)9.747.293.930.254.35
Net Profit / Share (Rs.)7.295.592.950.193.68
NP After MI And SOA / Share (Rs.)7.295.592.940.173.65
PBDIT Margin (%)10.008.798.317.318.99
PBIT Margin (%)7.886.555.924.156.95
PBT Margin (%)4.193.402.460.232.99
Net Profit Margin (%)3.142.601.840.182.53
NP After MI And SOA Margin (%)3.142.601.840.162.51
Return on Networth / Equity (%)11.219.695.680.367.57
Return on Capital Employeed (%)23.1119.9814.697.2416.70
Return On Assets (%)3.723.251.950.132.86
Long Term Debt / Equity (X)0.150.120.130.160.14
Total Debt / Equity (X)0.830.790.790.760.57
Asset Turnover Ratio (%)1.261.301.010.811.17
Current Ratio (X)1.041.091.121.161.13
Quick Ratio (X)0.510.520.590.680.67
Inventory Turnover Ratio (X)2.422.482.422.002.70
Interest Coverage Ratio (X)2.722.792.401.402.27
Interest Coverage Ratio (Post Tax) (X)1.851.831.530.781.64
Enterprise Value (Cr.)2389.311400.21992.68708.76544.57
EV / Net Operating Revenue (X)0.760.480.430.460.25
EV / EBITDA (X)7.635.505.276.352.88
MarketCap / Net Operating Revenue (X)0.570.320.210.150.09
Price / BV (X)2.051.220.660.330.29
Price / Net Operating Revenue (X)0.570.320.210.150.09
EarningsYield0.050.070.080.010.26

Profitability Ratios (%)

Liquidity Ratios

Liquidity Ratios (%)

Interest Coverage Ratios (%)

Valuation Ratios

Fair Value

Fair Value of Pennar Industries Ltd as of November 14, 2024 is: 198.71

Calculation basis:

  • Fair value = P/E Ratio * (Return on Equity / 100) * Book Value * (1 + Dividend Yield / 100)
  • P/E Ratio (Price-to-Earnings Ratio): Represents the price of the stock relative to its earnings per share. A higher P/E ratio indicates that investors are willing to pay a higher price for the stock.
  • Return on Equity (ROE): Measures a company's profitability relative to its shareholder equity. It showcases the company's ability to generate profits using the investment made by its shareholders, offering valuable insight into its operational efficiency and financial performance.
  • Book Value: Represents the net asset value of the company per share. It is calculated as the total assets minus intangible assets and liabilities, divided by the number of outstanding shares.
  • Dividend Yield: The ratio of the annual dividend per share to the current market price per share. It offers valuable insights into the profitability of an investment through dividends.

This formula allows us to gauge the fair value of the stock by analyzing its fundamental indicators.

As of November 14, 2024, Pennar Industries Ltd is Undervalued by 2.43% compared to the current share price 194.00

Intrinsic Value of Pennar Industries Ltd as of November 14, 2024 is: 228.20

Calculation basis:

  • Intrinsic value = P/E Ratio * (Return on Equity / 100) * Book Value * (1 + Dividend Yield / 100) * (1 + EPS CAGR for Last 5 Years)
  • P/E Ratio (Price-to-Earnings Ratio): Represents the price of the stock relative to its earnings per share. A higher P/E ratio indicates that investors are willing to pay a higher price for the stock.
  • Return on Equity (ROE): Measures a company's profitability relative to its shareholder equity. It showcases the company's ability to generate profits using the investment made by its shareholders, offering valuable insight into its operational efficiency and financial performance.
  • Book Value: Represents the net asset value of the company per share. It is calculated as the total assets minus intangible assets and liabilities, divided by the number of outstanding shares.
  • Dividend Yield: The ratio of the annual dividend per share to the current market price per share. It offers valuable insights into the profitability of an investment through dividends.
  • EPS CAGR (Compound Annual Growth Rate): Represents the geometric mean growth rate of earnings per share over the last 5 years. It provides insight into the historical growth trajectory of the company's earnings.

This formula allows us to gauge the intrinsic value of the stock by analyzing its fundamental indicators along with EPS growth.

As of November 14, 2024, Pennar Industries Ltd is Undervalued by 17.63% compared to the current share price 194.00

Last 5 Year EPS CAGR: 14.84%

*Investments are subject to market risks

Strength and Weakness

StrengthWeakness
  1. The company has higher reserves (529.75 cr) compared to borrowings (426.75 cr), indicating strong financial stability.
  2. The company has shown consistent growth in sales (1.50 cr) and profit (78.33 cr) over the years.
  1. The stock has a low average ROCE of 13.50%, which may not be favorable.
  2. The stock has a high average Working Capital Days of 77.75, which may not be favorable.
  3. The stock has a high average Cash Conversion Cycle of 81.58, which may not be favorable.

Stock Analysis

  • Considering all of the following key financial indicators, prospective investors are encouraged to conduct thorough research and seek professional guidance before considering any investment in Pennar Industries Ltd:
    1. Net Profit Margin: 3.14%
      • Net Profit Margin: This metric indicates the percentage of profit a company makes from its total revenue. A higher net profit margin is generally desirable as it reflects better profitability.
    2. ROCE: 23.11% (Industry Average ROCE: 57.58%)
      • ROCE (Return on Capital Employed): ROCE measures a company's profitability and the efficiency with which its capital is employed. A higher ROCE indicates efficient use of capital.
    3. ROE%: 11.21% (Industry Average ROE: 8.02%)
      • ROE (Return on Equity): ROE measures a company's profitability relative to shareholders' equity. A higher ROE indicates efficient use of shareholders' funds.
    4. Interest Coverage Ratio (Post Tax): 1.85
      • Interest Coverage Ratio: The interest coverage ratio measures a company's ability to cover its interest payments on outstanding debt. A ratio greater than 2 is generally considered healthy as it indicates the company can meet its interest obligations comfortably.
    5. Quick Ratio: 0.51
      • Quick Ratio: The quick ratio assesses a company's ability to cover its short-term liabilities with its most liquid assets. A ratio higher than 1 suggests the company can meet its short-term obligations without relying heavily on inventory.
    6. Stock P/E: 25.4 (Industry average Stock P/E: 48.7)
      • Stock P/E (Price-to-Earnings) Ratio: The P/E ratio compares a company's current share price to its earnings per share. A lower P/E ratio relative to industry peers or historical values may indicate that the stock is undervalued.
    7. Total Debt / Equity: 0.83
      • Total Debt / Equity: This ratio measures a company's financial leverage by comparing its total debt to its total equity. A lower ratio indicates lower financial risk and greater financial stability.
    The current analysis is available for review. It's important to conduct thorough research and consider consulting with financial professionals before making any investment decisions.
    Stock Rating:

About the Company - Qualitative Analysis

Pennar Industries Ltd. is a Public Limited Listed company incorporated on 08/08/1975 and has its registered office in the State of Andhra Pradesh, India. Company’s Corporate Identification Number(CIN) is L27109TG1975PLC001919 and registration number is 001919. Currently Company is involved in the business activities of Manufacture of hot-rolled and cold-rolled products of steel. Company’s Total Operating Revenue is Rs. 1994.75 Cr. and Equity Capital is Rs. 71.08 Cr. for the Year ended 31/03/2022.
INDUSTRYADDRESSCONTACT
Steel - CR/HR Strips2-91/14/8/PIl/10 & 11, 7th Floor, Whitefields, Kondapur, Hyderabad Telangana 500084corporatecommunications@pennarindia.com
http://www.pennarindia.com
Management
NamePosition Held
Mr. RVS RamakrishnaChairman & Ind.Director
Mr. Aditya RaoVice Chairman & Mng.Director
Mr. K Lavanya KumarWhole Time Director
Mr. P V RaoNon Executive Director
Mr. Eric James BrownNon Executive Director
Mr. Chandrasekhar SripadaIndependent Director
Ms. Virginia SharmaIndependent Director
Mr. Parthasarathy Vankipuram SrinivasaIndependent Director

FAQ

What is the latest intrinsic value of Pennar Industries Ltd?

The latest intrinsic value of Pennar Industries Ltd as on 13 November 2024 is ₹198.71, which is 2.43% higher than the current market price of ₹194.00.

What is the Market Cap of Pennar Industries Ltd?

The Market Cap of Pennar Industries Ltd is 2,615 Cr..

What is the current Stock Price of Pennar Industries Ltd as on 13 November 2024?

The current stock price of Pennar Industries Ltd as on 13 November 2024 is ₹194.

What is the High / Low of Pennar Industries Ltd stocks in FY 2024?

In FY 2024, the High / Low of Pennar Industries Ltd stocks is 215/102.

What is the Stock P/E of Pennar Industries Ltd?

The Stock P/E of Pennar Industries Ltd is 25.4.

What is the Book Value of Pennar Industries Ltd?

The Book Value of Pennar Industries Ltd is 65.0.

What is the Dividend Yield of Pennar Industries Ltd?

The Dividend Yield of Pennar Industries Ltd is 0.00 %.

What is the ROCE of Pennar Industries Ltd?

The ROCE of Pennar Industries Ltd is 15.7 %.

What is the ROE of Pennar Industries Ltd?

The ROE of Pennar Industries Ltd is 11.8 %.

What is the Face Value of Pennar Industries Ltd?

The Face Value of Pennar Industries Ltd is 5.00.

About the Author

Author Avatar
Getaka

Getaka, CFA, a financial analyst with 15 years of experience in the industry. Getaka holds an MBA degree and the Chartered Financial Analyst designation, demonstrating his profound understanding of financial analysis and investment management. Throughout his career, he has conducted numerous financial analyses and due diligence processes for companies in the industry, and has a strong track record of identifying key trends and opportunities. He leverages his expertise to deliver a thorough financial analysis of a company, encompassing its financial performance, key ratios, future prospects, and risks. Getaka is committed to providing accurate, reliable, and trustworthy information to help readers make informed decisions about their finances and investments.

Disclaimer: This article is for informational purposes only and should not be construed as financial advice. The author is not a SEBI registered financial advisor and does not have any vested interest in Pennar Industries Ltd. Investors are advised to conduct their own due diligence and consult with a financial professional before making any investment decisions. The information provided in this article is based on publicly available data and the author's analysis, but it may not be comprehensive or up-to-date. The author and getaka.co.in are not responsible for any errors or omissions in the content. This article is not intended to promote any particular investment strategy or recommendation, and readers should consult with their own financial advisors before making any investment decisions. Data Source: NSE