BSE:521240

Stock Analysis Report

Sambandam Spinning Mills

Executive Summary

Sambandam Spinning Mills Limited manufactures and sells cotton yarns in India.

Rewards

Trading at 72.3% below its fair value

Risk Analysis

Interest payments are not well covered by earnings

Does not have a meaningful market cap (₹264M)

Unstable dividend track record



Snowflake Analysis

Undervalued with adequate balance sheet.


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Share Price & News

How has Sambandam Spinning Mills's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 521240 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

0%

521240

-0.5%

IN Luxury

-1.5%

IN Market


1 Year Return

-24.7%

521240

18.2%

IN Luxury

10.7%

IN Market

Return vs Industry: 521240 underperformed the Indian Luxury industry which returned 18.2% over the past year.

Return vs Market: 521240 underperformed the Indian Market which returned 10.7% over the past year.


Shareholder returns

521240IndustryMarket
7 Day0%-0.5%-1.5%
30 Day-8.6%3.0%-2.7%
90 Day2.2%9.2%1.3%
1 Year-22.6%-24.7%19.0%18.2%12.7%10.7%
3 Year-33.5%-38.4%52.2%48.8%22.0%15.1%
5 Year12.3%-1.6%106.9%100.1%34.5%22.0%

Price Volatility Vs. Market

How volatile is Sambandam Spinning Mills's share price compared to the market and industry in the last 5 years?


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Valuation

Is Sambandam Spinning Mills undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: 521240 (₹64) is trading below our estimate of fair value (₹230.74)

Significantly Below Fair Value: 521240 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: 521240 is good value based on its PE Ratio (7.4x) compared to the Luxury industry average (11.2x).

PE vs Market: 521240 is good value based on its PE Ratio (7.4x) compared to the Indian market (13.1x).


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate 521240's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: 521240 is good value based on its PB Ratio (0.3x) compared to the IN Luxury industry average (0.5x).


Next Steps

Future Growth

How is Sambandam Spinning Mills forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

19.9%

Forecasted Consumer Durables industry annual growth in earnings


In this section we usually present revenue and earnings growth projections based on the consensus estimates of professional analysts to help investors understand the company’s ability to generate profit. But as Sambandam Spinning Mills has not provided enough past data and has no analyst forecast, its future earnings cannot be reliably calculated by extrapolating past data or using analyst predictions.

This is quite a rare situation as 97% of companies covered by SimplyWall St do have past financial data.


Next Steps

Past Performance

How has Sambandam Spinning Mills performed over the past 5 years?

17.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 521240 has high quality earnings.

Growing Profit Margin: 521240's current net profit margins (1.9%) are lower than last year (2.1%).


Past Earnings Growth Analysis

Earnings Trend: 521240's earnings have grown by 17.9% per year over the past 5 years.

Accelerating Growth: 521240's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 521240 had negative earnings growth (-15.6%) over the past year, making it difficult to compare to the Luxury industry average (5.6%).


Return on Equity

High ROE: 521240's Return on Equity (3.9%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Sambandam Spinning Mills's financial position?


Financial Position Analysis

Short Term Liabilities: 521240's short term assets (₹923.7M) exceed its short term liabilities (₹882.4M).

Long Term Liabilities: 521240's short term assets (₹923.7M) exceed its long term liabilities (₹247.1M).


Debt to Equity History and Analysis

Debt Level: 521240's debt to equity ratio (66.3%) is considered high.

Reducing Debt: 521240's debt to equity ratio has reduced from 135.5% to 66.3% over the past 5 years.

Debt Coverage: 521240's debt is well covered by operating cash flow (22.5%).

Interest Coverage: 521240's interest payments on its debt are not well covered by EBIT (1.5x coverage).


Balance Sheet

Inventory Level: 521240 has a high level of physical assets or inventory.

Debt Coverage by Assets: 521240's debt is covered by short term assets (assets are 1.5x debt).


Next Steps

Dividend

What is Sambandam Spinning Mills's current dividend yield, its reliability and sustainability?

3.13%

Current Dividend Yield


Dividend Yield vs Market

company3.1%marketbottom25%0.6%markettop25%2.6%industryaverage0.6%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: 521240's dividend (3.13%) is higher than the bottom 25% of dividend payers in the Indian market (0.6%).

High Dividend: 521240's dividend (3.13%) is in the top 25% of dividend payers in the Indian market (2.58%)


Stability and Growth of Payments

Stable Dividend: 521240 has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: 521240 has only been paying a dividend for 9 years, and since then payments have fallen.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (23.3%), 521240's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years and that it will be covered by earnings.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

17.3yrs

Average management tenure


CEO

S. Devarajan (70yo)

17.3yrs

Tenure

₹6,600,000

Compensation

Mr. S. Devarajan, B.Sc., has been the Chairman and Managing Director of Sambandam Spinning Mills Ltd. since May 29, 2008 and October 23, 2002 respectively and serves as its Chief Executive Officer. Mr. Dev ...


CEO Compensation Analysis

Compensation vs Market: S.'s total compensation ($USD92.50K) is above average for companies of similar size in the Indian market ($USD50.34K).

Compensation vs Earnings: S.'s compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
S. Devarajan
Chairman17.3yrs₹6.60m12.23% 32.2m
S. Dinakaran
Joint MD & Executive Director14.8yrs₹3.66m9.74% 25.7m
S. Jegarajan
Joint MD & Executive Director14.8yrs₹6.33m11.34% 29.9m
J. Sakthivel
Chief Technical Officer0yrsno data0.35% 915.4k
S. Natarajan
Company Secretary & Compliance Officer0yrs₹1.20mno data
D. Kumar
Chief Marketing Officer0.7yrs₹2.25m0.14% 358.7k
P. Boopalan
Chief Financial Officer0.7yrsno datano data

17.3yrs

Average Tenure

65yo

Average Age

Experienced Management: 521240's management team is seasoned and experienced (17.3 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
S. Devarajan
Chairman17.3yrs₹6.60m12.23% 32.2m
S. Dinakaran
Joint MD & Executive Director14.8yrs₹3.66m9.74% 25.7m
S. Jegarajan
Joint MD & Executive Director14.8yrs₹6.33m11.34% 29.9m
D. Sudharsan
Non-Executive Director24.7yrs₹55.00k2.08% 5.5m
S. Gnanasekharan
Independent Director6yrs₹300.00kno data
Kameshwar Bhat
Independent Director5.4yrs₹300.00kno data
V. Sekar
Independent Director2.9yrs₹300.00kno data
D. Balasundaram
Independent Director2.8yrs₹235.00kno data
Annapoorani Venugopalan
Additional Non-Executive Independent Director1.3yrs₹25.00kno data

6.0yrs

Average Tenure

63yo

Average Age

Experienced Board: 521240's board of directors are considered experienced (6 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Sambandam Spinning Mills Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Sambandam Spinning Mills Limited
  • Ticker: 521240
  • Exchange: BSE
  • Founded: 1973
  • Industry: Textiles
  • Sector: Consumer Durables
  • Market Cap: ₹263.766m
  • Shares outstanding: 4.26m
  • Website: https://sambandam.com

Number of Employees


Location

  • Sambandam Spinning Mills Limited
  • Kamaraj Nagar Colony
  • Post Bag No. 1
  • Salem
  • Tamil Nadu
  • 636014
  • India

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
521240BSE (Mumbai Stock Exchange)YesEquity SharesININRFeb 2002

Biography

Sambandam Spinning Mills Limited manufactures and sells cotton yarns in India. The company offers cotton autoconed/siro cleared yarns; single/multi ply yarns; carded/combed weaving and knitting yarns; ring doubled wet spliced/TFO yarns; and value added products, including gassed yarns/compact yarns/slub yarns. It also generates and sells wind power. The company also exports its products. Sambandam Spinning Mills Limited was founded in 1973 and is headquartered in Salem, India. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/19 12:49
End of Day Share Price2020/02/19 00:00
Earnings2019/12/31
Annual Earnings2019/03/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.