Our 37th company in the Series of Best Stocks to Buy in India for Short term 2022 is Rain Industries Ltd.
This company is good for investing purpose or not ?
Let’s start with the Company profile
Company Profile :
Rain Industries Limited is engaged in the business of manufacture and sale of carbon products, chemicals and cement.
Now Let’s check the important fundamental figures of this company. This is a small cap company with Market Cap ₹6,451cr. We can check more fundamental details below in depth:
Company Fundamental Detail :
PE Ratio: 11.12
Sector PE Ratio: 13.38
PE Ratio of this company is low than Sector’s PE. So it’s a Good PE than the peers of this company.
PB Ratio : 1.01
Sector PB Ratio : 2.70
PB Ratio of this company is low than Sector’s PB ratio. So it’s Good PB than the peers of this company.
Dividend Yield : 0.52%
Sector Dividend Yield : 2.31%
Dividend Yield of this company is low than Sector. Dividend of this is Below Average than the peers of this company.
ROE: 3.42%
ROCE: 4.45%
ROE (Return on equity) and ROCE (Return on capital equity) is Below Average.
According to above data, this company is looking fundamentally average. Now We’ll check the company Financially data:
Company Financial Detail
| Year | Revenue(cr.) | Profit(cr.) |
| 2021 | 14,719.90 | 580.18 |
| 2020 | 10,920.53 | 558.18 |
| 2019 | 12,517.03 | 391.40 |
| 2018 | 14,090.65 | 581.61 |
We should check now liabilities of company also in the below table
Total Current & Non Current Liabilities
| 2021 | 2020 | 2019 | 2018 |
| 12,097.30 | 12,158.32 | 10,842.35 | 10,933.33 |
Liabilities of a company refers to the debt of that company. We should also aware the debt of company. In 2021 ,Company have 12,097.30Cr. debt.
Let’s check the Free Cash flow of the company
Free Cash flow
| 2021 | 2020 | 2019 | 2018 |
| 285.79 | 742.01 | 1,046.31 | 542.46 |
Debt Level: 500339’s net debt to equity ratio (89.9%) is considered high.
Reducing Debt: Rain Industries debt to equity ratio has reduced from 198.1% to 112.3% over the past 5 years.
Debt Coverage: Rain Industries debt is not well covered by operating cash flow (7.2%).
Interest Coverage: interest payments on its debt are well covered by EBIT (5.8x coverage).
Share Holding Pattern
| Promotor Holding | Foreign Institution | Mutual Fund | Other Domestic Institutions | Retail & Others | |
| Jun 2022 | 41.14% | 15.70% | 1.51% | 0.12% | 41.52% |
| Mar 2022 | 41.14% | 14.36% | 1.27% | 0.08% | 43.15% |
| Dec 2021 | 41.14% | 14.08% | 0.23% | 0.07% | 44.48% |
| Sep 2021 | 41.14% | 12.26% | 0.23% | 0.05% | 46.32% |
Above table showing there is no big change in Promotor Holding which is 41.14% in June 2022. FIIs invested in June 2022 with 15.70% and retail investor is 41.52% .
Investment Checklist for Rain Industries Ltd.
-
The company is currently profitable
-
Debt is not well covered by operating cash flow
-
Dividend of 0.52% is not well covered by earnings
-
Earnings have grown by 3.9% per year over past 5 years
-
Share price has been stable over the past 3 months
-
The company’s earnings are high quality
-
Profit margins decreased but not substantially
-
At least 3 years of financial data is available
-
Shareholders have not been meaningfully diluted in the past year or recently listed
-
Revenue is meaningful (₹179B)
-
Market cap is meaningful (₹65B)
-
Rain Indus does not have negative shareholders equity.
According to its historical performance we can predict stock target.
[membership_protected_content user=non-member]
Entry Buying Zone : Premium members can see only
Target: Premium members can see only
Time Horizon:Premium members can see only
Risk Profile: Premium members can see only
[/membership_protected_content]
[membership_protected_content]
Entry Buying Zone : 150 to 175
Target: 240 (60% Upside)
Time Horizon: 6-8 Months
Risk Profile: Low Risk (Stock is 1.88x as volatile as Nifty)
[/membership_protected_content]
Hope you liked Our 37th company in the Series of Best stocks to buy in India for short term 2022. We tried to cover many important things about this company, if you think anything left to cover, you can comment us and we’ll try to cover those things also.
Disclaimer: This is an Educational Initiative and is NOT registered under any SEBI regulations. All the information that we provide is just for Educational purposes and you should consult your financial adviser before taking any investment decision. Also we do NOT provide any form of Stock Tips or Advise on stocks or portfolios. My All Trades Only Education Purpose. All trades will be at your risk. You have the responsibility of any trade or any benefit or loss