AMD industries breakout
تم تحديثه
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 Amount/(Buy Price-Initial Stop Loss Price)
4. Sell on initial stop loss hit or daily RSI closing below 40
5. Some other ways to sell stocks can be
a. 25% or 50% up in three weeks or less
b. Weekly tailing tops with high volume
c. Exhaustion gaps
d. Heavy daily volume without further upside
e. Largest one day price drop
after a consolidation since November 2017,
AMDIND has given a high-volume breakout today. It is a buy with a stop just below Rs.51.50. In December quarter the company posted quarterly sales growth of 70%, quarterly profit growth of 84%, TTM sales growth of 46% and TTM in profit growth of 155%.
Other fundamentals:
1. Stock is trading at 0.78 times its book value.
2. The company has three product lines which include crown caps - metallic closures for glass bottles, PET Preforms and plastic closures. It provides packaging solutions to most of the successful and well established companies engaged in beverages, liquor and processed foods ranging from small ventures to industry majors.
3. The Company supplies finished products to MNC’s like Coca Cola, Pepsi, South African Breweries (SAB), United Breweries(UB) Dabur, HLL, Hamdard etc. as well as numerous large indigenous beverage Pharma and healthcare companies.
4. The company through its related company, AMD Estates & Developers Private Limited is developing a Commercial Complex at Sector-114, Gurgaon, Haryana in collaboration with VSR Infratech Private Limited, New Delhi. The said project is at its last leg to complete. During FY21, the company has received revenue of Rs. 86.44 Lakhs from this project.
5. Excerpts from the credit rating report: -
Brickwork Ratings believes that AMD Industries Ltd.’s (AMDIL) business risk profile will be maintained over the medium term. The ‘Stable’ outlook indicates a low likelihood of rating change over the medium term on account of sustained scale of operations in the past and above Rs 160 Crs and enhanced capacity which can increase scale of operations in the medium term due to stable demand. (+ve)
The company has a long track record since 1983 and promoters have extensive experience of more than three decades in running the company. (+ve)
The company has a moderate tangible net worth indicated by equity and reserves of Rs.131.86 crores in FY21 as against Rs 128.67 crores as in FY20. Company’s Gearing ratio viz TD/TNW is comfortable at 0.40 x in FY21 (PY: 0.37x). AMDIL’s debt stood at Rs 53.20Cr as on end-FY21 (came down to 46 Crs in September 2021), translating into a debt to EBITDA ratio of 0.23x. (+ve)
The company’s cash conversion cycle (CCC) of the company has increased to 150 days in FY21 from 85 days in FY20. The increase is on account of increased receivable days of 356 days in FY21 from 292 days in FY20 impacted due to COVID 19 related disruption. (-ve)
However, CCC is projected to truncate to 123 days in the near term.
The company is exposed to raw material fluctuation risks which is likely to affect the profitability margins further as raw material prices are linked to crude oil prices. AMDIL’s EBITDA margin was 8.30% in H1FY21, as against 10.215 in FY21 and 11.37% in FY20. (-ve)
Company's scale of operations may witness a decline if there is a significant shift towards newer packaging products, such as tetra packs, sachets, strips, and other flexible packaging, by end-user industries in the medium term.
2. Don't risk more than 1%-2% of your capital as stop loss
3. Position Size formula:- Stop Loss Amount/(Buy Price-Initial Stop Loss Price)
4. Sell on initial stop loss hit or daily RSI closing below 40
5. Some other ways to sell stocks can be
a. 25% or 50% up in three weeks or less
b. Weekly tailing tops with high volume
c. Exhaustion gaps
d. Heavy daily volume without further upside
e. Largest one day price drop
after a consolidation since November 2017,
AMDIND has given a high-volume breakout today. It is a buy with a stop just below Rs.51.50. In December quarter the company posted quarterly sales growth of 70%, quarterly profit growth of 84%, TTM sales growth of 46% and TTM in profit growth of 155%.Other fundamentals:
1. Stock is trading at 0.78 times its book value.
2. The company has three product lines which include crown caps - metallic closures for glass bottles, PET Preforms and plastic closures. It provides packaging solutions to most of the successful and well established companies engaged in beverages, liquor and processed foods ranging from small ventures to industry majors.
3. The Company supplies finished products to MNC’s like Coca Cola, Pepsi, South African Breweries (SAB), United Breweries(UB) Dabur, HLL, Hamdard etc. as well as numerous large indigenous beverage Pharma and healthcare companies.
4. The company through its related company, AMD Estates & Developers Private Limited is developing a Commercial Complex at Sector-114, Gurgaon, Haryana in collaboration with VSR Infratech Private Limited, New Delhi. The said project is at its last leg to complete. During FY21, the company has received revenue of Rs. 86.44 Lakhs from this project.
5. Excerpts from the credit rating report: -
Brickwork Ratings believes that AMD Industries Ltd.’s (AMDIL) business risk profile will be maintained over the medium term. The ‘Stable’ outlook indicates a low likelihood of rating change over the medium term on account of sustained scale of operations in the past and above Rs 160 Crs and enhanced capacity which can increase scale of operations in the medium term due to stable demand. (+ve)
The company has a long track record since 1983 and promoters have extensive experience of more than three decades in running the company. (+ve)
The company has a moderate tangible net worth indicated by equity and reserves of Rs.131.86 crores in FY21 as against Rs 128.67 crores as in FY20. Company’s Gearing ratio viz TD/TNW is comfortable at 0.40 x in FY21 (PY: 0.37x). AMDIL’s debt stood at Rs 53.20Cr as on end-FY21 (came down to 46 Crs in September 2021), translating into a debt to EBITDA ratio of 0.23x. (+ve)
The company’s cash conversion cycle (CCC) of the company has increased to 150 days in FY21 from 85 days in FY20. The increase is on account of increased receivable days of 356 days in FY21 from 292 days in FY20 impacted due to COVID 19 related disruption. (-ve)
However, CCC is projected to truncate to 123 days in the near term.
The company is exposed to raw material fluctuation risks which is likely to affect the profitability margins further as raw material prices are linked to crude oil prices. AMDIL’s EBITDA margin was 8.30% in H1FY21, as against 10.215 in FY21 and 11.37% in FY20. (-ve)
Company's scale of operations may witness a decline if there is a significant shift towards newer packaging products, such as tetra packs, sachets, strips, and other flexible packaging, by end-user industries in the medium term.
ملاحظة
Bounce from support levels, another opportunity to buy.
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