SMRUTHI ORGANICS LTD - Q3 FY 21 - RESULTS ANALYSIS

 

SMRUTHI ORGANICS LTD

Q3 FY 21 RESULTS ANALYSIS

 

Who We Are

Smruthi Organics manufactures API products in the anti – diabetic, anti – hypertension and anti – infectives therapeutic categories. It caters to both the Indian domestic as well as rest of the world (ROW) markets, with clients spanning across Asia, Americas and Africa. Its client list of large domestic and international pharma companies is testimony to its high quality and reliable service.

The company has 2 manufacturing facilities in Solapur, India. The API facility is spread across 22-acre land. Our State-of-the-Art R&D Facility based in Hyderabad, India, works on developing novel synthetic routes for API. Its process development laboratory based at the API facility is constantly engaged in improving process efficiency and troubleshooting. 

THEIR USP:

HIGH QUALITY API

TECHNOLOGY iNNOVATION

BACKWARD INTEGRATION

WHO APPROVED

RELIABLE SUPPLY ANYWHERE

COMPLEX CHEMISTRY

REGULATORY SUPPORT

Manufacturing Facilities 

The company has 2 manufacturing facilities in Solapur, Maharashtra.

The flagship API facility is spread across 22 acre land in MIDC Chincholi, Solapur, and is WHO – GMP approved site by CDSCO.

It has 7 manufacturing workshops and 8 clean rooms equipped with class 100000 air handling units.

The current area occupied is about 50%, with ample free land available for future expansion. The second unit is a smaller facility with one workshop manufacturing intermediates for captive consumption.  

The company has more than 100 reactors with a mix of glass lined and SS 316 adding to an installed reactor capacity of more than 300 kilo liter.

The company’s diverse equipment allows it to perform a variety of complex chemical reactions from -50 oC to over 250 oC and from low vacuum (1 mm) to high pressure (30 bar). The company is equally adept at handling both large volume (batch size of 1250 kg) and small volume (batch size 10 kg) manufacturing. The facility is a zero liquid discharge facility with integrated effluent treatment systems for complete recycling of water. 

The company has a state of the art quality control laboratory equipped with all testing facilities to release all our products in house. Our qualified and experienced quality assurance personnel ensure strict adherence to global GMP standards.

 Our strong regulatory affairs team is expert in providing timely documentation support to our clients and regulatory authorities across the globe.

 

Quarterly Results

Smruthi Organics Limited (in Rs. Cr.)	DEC'20	Sep '20	Dec '19	YOY	QOQ
Net Sales	31.59	36.84	30.77	2.66	-14.25
Raw Materials	14.33	21.99	18.41	-22.16	-34.83
Net Profit	5.11	5.84	2.42	111.16	-12.5
Equity	3.82	3.82	3.82	0	0
Basic EPS	13.39	15.31	6.35	110.87	-12.54
Increase/Decrease in Stocks	0.86	-3.49	3.46	-75.14	-124.64
Employees Cost	4.39	4.29	3.69	18.97	2.33
depreciat	0.82	1.12	1.11	-26.13	-26.79
Other Expenses	3.92	4.72	4.41	-11.11	-16.95
Other Income	0.23	0.11	4.12	-94.42	109.09
Interest	0.21	0.22	0.78	-73.08	-4.55
TOTAL EXP	24.54	26.85	31.86	-22.98	-8.6
P/L Before Exceptional Items & Tax	7.28	8.1	3.03	140.26	-10.12
P/L Before Tax	7.28	8.1	3.03	140.26	-10.12
Tax	2.17	2.26	0.61	255.74	-3.98

 

MP  633.15   4.45

PE   11.82     35.57

BONUS SHARES   2 EQUITY SHARES FOR EACH EQUITY SHARE

52 Week Range          

L 65.1          

H 699.75             

Volume        

31,743         

Mkt Cap (Rs. Cr.) 241

 

SHAREHOLDING 

            

Promoters have decreased holdings from 63.97% to 63.5% in Dec 2020 qtr       

 

Management   

    

Purushotham Eaga : Chairman & Managing Director          

             

Swapnil Eaga   :  Whole Time Director & CFO       

 

Cash Flow of Smruthi Organics Limited (in Rs. Cr.)	Mar-20	Mar-19	Mar-18	Mar-17	Mar-16
	12 mths	12 mths	12 mths	12 mths	12 mths
Net Profit/Loss Before Extraordinary Items And Tax	12.09	9.76	-4.68	2.59	1.59
Net Cash Flow From Operating Activities	21.43	11.6	5.14	9.17	13.97
Net Cash Used In Investing Activities	-4.52	-4.02	-3.21	-0.48	0.16
Net Cash Used From Financing Activities	-17.49	-5.15	-1.77	-8.68	-14.19
Net Inc/Dec In Cash And Cash Equivalents	-0.58	2.43	0.16	0.02	-0.06
Cash And Cash Equivalents Begin of Year	4.16	1.73	1.57	1.55	1.69
Cash And Cash Equivalents End Of Year	3.57	4.16	1.73	1.57	1.63

  

STRENGTHS 

Company with high TTM EPS Growth

New 52 Week High

Effectively using its capital to generate profit - RoCE improving in last 2 years

Effectively using Shareholders fund - Return on equity (ROE) improving since last 2 year

Efficient in managing Assets to generate Profits - ROA improving since last 2 year

Growth in Quarterly Net Profit with increasing Profit Margin (YoY)

Company with Low Debt

Strong cash generating ability from core business - Improving Cash Flow from operation for last 2 years

Annual Net Profits improving for last 2 years

Book Value per share Improving for last 2 years

Company with Zero Promoter Pledge

Recent Results : Growth in Operating Profit with increase in operating margins (YoY)

Stock gained more than 20% in one month

Strong Momentum: Price above short, medium and long term moving averages

High Piotroski Score - Companies with strong financials

WEAKNESSES

Negative Breakdown Third Support (LTP < S3)

Bearish Engulfing (Bearish Reversal)

Decline in Net Profit (QoQ)

Promoter decreasing their shareholding

Declining Net Cash Flow : Companies not able to generate net cash

OPPORTUNITIES

Highest Recovery from 52 Week Low

RSI indicating price strength

THREATS

Increasing Trend in Non-Core Income

Strong Performer: Stock with consistent financial performance, quality management, and strong technical momentum indicating good investor enthusiasm. Currently valued at Good to expensive valuation

 

RETURNS SUMMARY (Price + Dividend)

The stock gave a total returns of 402.09% in the last 1 year Outperforming Sensex returns of 17.10%

Investors Returns (3 years) –

Period	6M	1Y	2Y	3Y
Stock (%)	371.75	402.09	358.16	432.8
Sector (%)	28.71	55.80	52.79	43.04
Benchmark (%)	36.01	17.10	35.01	40.73

 

20 Apr : BRIEF-Smruthi Organics Acquires Manufacturing License For APIs HCQ & Chloroquine Sulphate