Sazgar Engineering Works Ltd. (SAZEW) Stock Recommendation | Score, Valuation, Technicals & Financial Trend

Score

Click here to find our call on this stock

Strong Sell

Sell

Hold

Buy

Strong Buy

Comparison

Company

Score

Quality

Valuation

Financial

Technical

Sazgar Engineering Works Ltd.

Atlas Honda Ltd.

Ghandhara Industries Ltd.

Indus Motor Co. Ltd.

Honda Atlas Cars (Pakistan) Ltd.

Dewan Farooque Motors Ltd.

Pak Suzuki Motors Co. Ltd.

Why is Sazgar Engineering Works Ltd. ?

Strong Long Term Fundamental Strength with a 103.42% CAGR growth in Net Sales

Company's ability to service its debt is strong with a healthy EBIT to Interest (avg) ratio of 36.81

With a growth in Net Profit of NAN%, the company declared Very Positive results in Mar 25

The company has declared positive results for the last 9 consecutive quarters
INTEREST COVERAGE RATIO(Q) Highest at 20,947.27
DIVIDEND PAYOUT RATIO(Y) Highest at 11.64%
RAW MATERIAL COST(Y) Fallen by -12.8% (YoY)

With ROE of 77.7, it has a attractive valuation with a 3.3 Price to Book Value

The stock is trading at a discount compared to its peers' average historical valuations
Over the past year, while the stock has generated a return of 0%, its profits have risen by 232.2% ; the PEG ratio of the company is 0
At the current price, the company has a high dividend yield of 3.8

Real-Time Research Report

Verdict Report

How much should you buy?

Overall Portfolio exposure to Sazgar Engineering Works Ltd. should be less than 10%
Overall Portfolio exposure to Automobiles should be less than 30%

(If sector exposure > 30%, please use optimiser tool to see which are the best stocks to hold in Automobiles)

When to exit? - We will constantly monitor the company and suggest at the appropriate time to exit from the stock

Is Sazgar Engineering Works Ltd. for you?

High Risk, Low Return

Absolute

Risk Adjusted

Volatility

Sazgar Engineering Works Ltd.

33.52%

1.04

45.48%

Pakistan KSE 100 Share

26.26%

2.81

22.77%

Quality

Management Risk

Growth

Capital Structure

Quality grade scale :

Below Average, Average, Good, Excellent

Quality key factors

Factor

Value

Sales Growth (5y)

106.73%

EBIT Growth (5y)

205.66%

EBIT to Interest (avg)

36.81

Debt to EBITDA (avg)

0.52

Net Debt to Equity (avg)

-0.50

Sales to Capital Employed (avg)

5.09

Tax Ratio

39.06%

Dividend Payout Ratio

19.24%

Pledged Shares

Institutional Holding

ROCE (avg)

78.94%

ROE (avg)

35.47%

Valuation

Valuation Scorecard

Valuation grade scale :

Very Risky, Risky, Very Expensive, Expensive, Fair, Attractive, Very Attractive

Valuation Key Factors

Factor

Value

P/E Ratio

Industry P/E

Price to Book Value

4.27

EV to EBIT

2.97

EV to EBITDA

2.94

EV to Capital Employed

-19.46

EV to Sales

0.72

PEG Ratio

0.16

Dividend Yield

3.37%

ROCE (Latest)

Negative Capital Employed

ROE (Latest)

61.44%

Technicals

Technical key factors

Indicator

Weekly

Monthly

MACD

Mildly Bearish

Bullish

RSI

No Signal

Bollinger Bands

Bearish

Mildly Bullish

Moving Averages

Mildly Bullish (Daily)

KST

Bullish

Mildly Bearish

Dow Theory

Mildly Bearish

Bullish

OBV

Mildly Bearish

Bullish

Technical Indicator Scale: Bearish, Mildly Bearish, Sideways, Mildly Bullish, Bullish Turned

Technical Movement

Analyse All Technical Factors

Financial Trend

Financial Trend Scorecard

Financial Trend scale:

Very Negative, Negative, Flat, Positive, Very Positive, Outstanding

10What is working for the Company

OPERATING CASH FLOW(Y)

Highest at PKR 22,337.96 MM

NET SALES(HY)

At PKR 67,845.86 MM has Grown at 51.8%

CASH AND EQV(HY)

Highest at PKR 56,562.6 MM

DEBTORS TURNOVER RATIO(HY)

Highest at 741.02 times

DIVIDEND PER SHARE(HY)

Highest at PKR 741.02

-5What is not working for the Company

RAW MATERIAL COST(Y)

Grown by 15.24% (YoY

INTEREST(Q)

Highest at PKR 120.25 MM

OPERATING PROFIT MARGIN(Q)

Lowest at 19.38 %

Here's what is working for Sazgar Engineering Works Ltd.

Operating Cash Flow

Highest at PKR 22,337.96 MM and Grown

In each year in the last three years

MOJO Watch

The company has generated higher cash revenues from business operations

Operating Cash Flows (PKR MM)

Net Sales

At PKR 67,845.86 MM has Grown at 51.8%

Year on Year (YoY)

MOJO Watch

Near term sales trend is positive

Net Sales (PKR MM)

Cash and Eqv

Highest at PKR 56,562.6 MM

in the last six Semi-Annual periods

MOJO Watch

Short Term liquidity is improving

Cash and Cash Equivalents

Debtors Turnover Ratio

Highest at 741.02 times

in the last five Semi-Annual periods

MOJO Watch

Company has been able to sell its Debtors faster

Debtors Turnover Ratio

Dividend per share

Highest at PKR 741.02

in the last five years

MOJO Watch

Company is distributing higher dividend from profits generated

DPS (PKR)

Depreciation

Highest at PKR 94.68 MM

in the last five periods

MOJO Watch

The expenditure on assets done by the company may have gone into operation

Depreciation (PKR MM)

Here's what is not working for Sazgar Engineering Works Ltd.

Interest

At PKR 120.25 MM has Grown at 51.78%

period on period (QoQ)

MOJO Watch

Rising interest cost signifies increased borrowings

Interest Paid (PKR MM)

Interest

Highest at PKR 120.25 MM

in the last five periods and Increased by 51.78% (QoQ)

MOJO Watch

Rising interest cost signifies increased borrowings

Interest Paid (PKR MM)

Operating Profit Margin

Lowest at 19.38 %

in the last five periods

MOJO Watch

Company's profit margin has deteriorated

Operating Profit to Sales

Raw Material Cost

Grown by 15.24% (YoY)

MOJO Watch

The company's ability to pass on the cost of raw materials to customers has deteriorated; this may lead to a fall in profit margin

Raw Material Cost as a percentage of Sales