MoneyWorks4Me

Check Before You Invest : Arunaya Organics Ltd

BSE: 0 NSE: ARUNAYA ISIN: INE0TTG01017
  |   Sector:  Chemicals & Fertilizers   |   Industry:  Dyes & Pigments

Snapshot

Q.1 Which industry/sub-sector does Arunaya Organics Ltd belong to?
Arunaya Organics Ltd belongs to the Chemicals & Fertilizers sector, operating specifically within the Dyes & Pigments segment.
Q.2 Is Arunaya Organics Ltd a good quality company?
Arunaya Organics Ltd is a quality company, based on a multi-year financial track record.

This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q.3 Is Arunaya Organics Ltd undervalued or overvalued?
Arunaya Organics Ltd appears Undervalued, as its key valuation ratios are lower than their past averages.

Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more.

Valuation Ratios Current 3-year
Historic Median
Price to Earnings 5.99 8.26
Price to Book 0.44 1.44
Price to Sales 0.39 0.41
EV to EBITDA 4.99 6.67
Q.4 Is Arunaya Organics Ltd a good buy now?
Arunaya Organics Ltd is not a good buy now, based on weak price trend analysis suggesting prices may fall. However, you need to check its quality and valuation before making a decision

Performance Analysis

We have analysed the performance of the company on the following:

  • How has it performed on generating Profits?

    By checking its Revenue growth, Gross, Operating and Net Margins compared to its last 5-year median.

  • How efficiently has it utilized Capital?

    By checking its ROCE, ROA, ROE and its Cash Conversion Cycle.

  • How is it managing its Debt?

    By checking its Debt to Equity and Cash Flow from Operations.

Q.1 Gross Profit margin of Arunaya Organics Ltd?
Arunaya Organics Ltd Gross profit margin which is the profit after deduction of direct costs, is 9.4% for FY-2024, which is above its 3-year median of 3.5%, indicating increasing margins.

Q.2 Operating Profit Margin of Arunaya Organics Ltd?
Arunaya Organics Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 11.22% for FY-2024, which is above its 3-year median of 4.59% indicating increasing margins.

Q.3 Net Profit Margin of Arunaya Organics Ltd?
Arunaya Organics Ltd Net Profit Margin is 6.56% for FY-2024, is above its 3-year median of 2.3%, indicating increasing margins.
Current Level 3-year
Historic Median
Gross Profit Margin (%) 9.4 3.5
Operating Profit Margin (%) 11.22 4.59
Net Profit Margin (%) 6.56 2.3

B: Does the business utilize capital efficiently?

Q.4 Return on Asset of Arunaya Organics Ltd?
Arunaya Organics Ltd Return on Asset is 9.77%, which is above its 3-year historical median of 4.79%, indicating improved asset utilization efficiency.

Q.5 Return on capital employed (ROCE) of Arunaya Organics Ltd?
Arunaya Organics Ltd Return on capital employed is 32.59% for FY-2024, which is above its 3-year historical median of 21.49%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 14%, indicating value creation.

Q.6 Return on Equity (ROE) of Arunaya Organics Ltd?
Arunaya Organics Ltd Return on equity is 44.13% for FY-2024, which is above its 3-year historical median of 29.11%, indicating the business is making better use of its shareholders capital.

C: How much debt does the business have and is it at a sustainable level?

Q.7 Debt to Equity ratio of Arunaya Organics Ltd?
Arunaya Organics Ltd Debt-to-Equity ratio is 1.18, which is above the industry average of 0.23, indicating higher debt levels in the industry.

Q.8 Debt to cash flow from operations of Arunaya Organics Ltd?
Arunaya Organics Ltd Debt to cash flow from operations is 5.33, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Arunaya Organics Ltd?

Q.1 Promoter shareholding and pledge status of Arunaya Organics Ltd?
Promoters hold 60.79% of the Arunaya Organics Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Arunaya Organics Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Arunaya Organics Ltd vs industry peers?
Arunaya Organics Ltd revenue CAGR is 0.00%, compared to the industry median CAGR of 0.00%, indicating stable growth and maintaining its market share.
Profit Metrics
Current Level 3-year
Industry Median
Revenue Growth (%) - 0
Gross Profit Growth (%) 118.8 8.7
Operating Profit Growth (%) 100.9 10.9
Net Profit Growth (%) 133.1 10.8
Operating Efficiency
Current Level 3-year
Industry Median
Asset Turnover (x) 1.49 0.93
ROE (%) 44.13 7.16
ROCE (%) 32.59 10.03
Cash Conversion Cycle (days) 96.5 87

Valuation & price assessment

Q.1 Stock return of Arunaya Organics Ltd over the last decade?
Over the last 1 year(s), the stock has delivered a CAGR of -38.82% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
- - - -38.8%
Q.2 Valuation ratios of Arunaya Organics Ltd vs historical?
The current P/E ratio of 5.99 is lower than its historical median of 8.26, indicating that the stock is trading below its historical average valuation.
Q.3 How do the current valuation ratios compare with 3-year historical median and industry numbers?
Valuation Ratios Current 3-year
Historic Median
3-year
Industry Median
Price to Earnings 5.99 8.26 22.20
Price to Book 0.44 1.44 1.50
Price to Sales 0.39 0.41 1.39
EV to EBITDA 4.99 6.67 12.03

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