Scripscan:Siyaram Silk Mills Ltd
BSE Code:503811
Cmp:230
Story:Siyaram Silk Mills is a part of Siyaram Poddar group. This is a vertically integrated textile company. This company has got in-house facilities for spinning, dyeing, weaving, finishing and also garmenting. The brand Siyaram is available at over 40,000 retail outlets all across the country. Besides that the company is also opening its own exclusive stores where it will sell Siyaram besides other brands, which the company has. Beside Siyaram the company also has Oxemberg and J Hamstead as the other brands under which their garments are sold.Increasing brand consciousness coupled with rising per capita income has stimulated demand for its various products. Vast distribution network facilitates further penetration to have pan-India presence giving it a competitive edge. Increasing capacities coupled with higher utilization is likely to further drive the volume growth.In a highly competitive market the company has successfully differentiated itself amidst both organised and unorganised players through effective branding of its products.The company expects robust demand growth to be aided by higher utilisation and increased capacities across all segments of the company.Siyaram"s vast distribution network of 1,500 dealers and 500 provides it with a competitive advantage. A network this extensive helps it make early inroads with new product lines and styles before competition can bring similar products to the market.At CMP of Rs230, the stock is trading at a very attractive valuation of 4 times its fy12 earnings of 58.The company also has got a 20 year track record of uninterrupted dividends.Given its strong brand portfolio, vast distribution network, fairly healthy balance sheet and strong dividend track record,the stock should give 30-50% return in the next 3-5 quarters.A strong buy altogether.
Saturday, December 24, 2011
Bannari Amman Spinning Mills Ltd:-Buy/sell/,growth prospects and recommendation,news and results,target and analysis,views and outlook,multibagger
Scripscan:Bannari Amman Spinning Mills Ltd
Code:501209
Cmp:55
Story:Bannari Amman Spinning Mills Limited (BASM), established in 1995 is a reputed player & a leader in cotton yarn segment in South India. BASM is a part of the Rs. 1,200 crs. Coimbatore based Bannari Amman group.Since inception BASM has evolved to be a leader in cotton yarn spinning in South India,Commanding a premium in the market for its products.Spinning and weaving units were expanded/modernized during 2008-09.About 25% of production is exported to countries such as Israel, Mauritius, Egypt, Taiwan, South Korea etc.The company operates in a niche segment and is a focused quality player earning higher than industry margins.It has two spinning units near Dindigul with installed capacity of 1.37,232 spindles, weaving division near Palladam with installed capacity of 135 looms, processing and technical textiles near Annur with capacity to produce 24 lakh meters of coated fabric per year and 27 windmills with installed capacity 23.40 MW of power all in Tamil Nadu.The expansion of its spinning unit, and integration into fabrics and home textiles has enabled the company to compete in the export markets with larger scale of operations.The higher value addition insulates the company from pricing pressures in the highly commoditised cotton yarn industry.Bannari came with its ipo in 2005 at 135 bucks and since then have been struggling to find attention from the retail fraternity.Valuations are pretty cheap with company quoting at a forward PE of less than 2.Low discounting suggests lack of investor confidence in the company.Investors who are stuck on this scrip should hold at the moment.Any inspiring announcement or some aggressive developments may just be the order of the day for the company.
Code:501209
Cmp:55
Story:Bannari Amman Spinning Mills Limited (BASM), established in 1995 is a reputed player & a leader in cotton yarn segment in South India. BASM is a part of the Rs. 1,200 crs. Coimbatore based Bannari Amman group.Since inception BASM has evolved to be a leader in cotton yarn spinning in South India,Commanding a premium in the market for its products.Spinning and weaving units were expanded/modernized during 2008-09.About 25% of production is exported to countries such as Israel, Mauritius, Egypt, Taiwan, South Korea etc.The company operates in a niche segment and is a focused quality player earning higher than industry margins.It has two spinning units near Dindigul with installed capacity of 1.37,232 spindles, weaving division near Palladam with installed capacity of 135 looms, processing and technical textiles near Annur with capacity to produce 24 lakh meters of coated fabric per year and 27 windmills with installed capacity 23.40 MW of power all in Tamil Nadu.The expansion of its spinning unit, and integration into fabrics and home textiles has enabled the company to compete in the export markets with larger scale of operations.The higher value addition insulates the company from pricing pressures in the highly commoditised cotton yarn industry.Bannari came with its ipo in 2005 at 135 bucks and since then have been struggling to find attention from the retail fraternity.Valuations are pretty cheap with company quoting at a forward PE of less than 2.Low discounting suggests lack of investor confidence in the company.Investors who are stuck on this scrip should hold at the moment.Any inspiring announcement or some aggressive developments may just be the order of the day for the company.
Suryalata Spinning Mills Ltd:-Buy/sell/,growth prospects and recommendation,news and results,target price and analysis,views and outlook,multibagger
Scripscan:Suryalata Spinning Mills Ltd
cmp:50
code:514138
Story:Hyderabad-based Suryalata Spinning is engaged in production of Poly/Viscose blended yarns in different counts and blends for domestic as well as exports markets. Company is exporting to over 30 countries including North America South America, Middle East, Canada etc.It has installed capacity of 72,000 spindles.Its equity is just 3.27 crores with excellent profit margins and current marketcap is very low.Company is installing another 35000 spindles at capex of Rs 65 crores which will be funded by way of 40 cr debt and 25 crores Internal accruals and preferential offer money.PROMOTERS HAVE TAKEN 4 LAC CONVERTIBE WARRANTS @ Rs 110/.In Phase-II,Company plans to add another 60,000 spindles at capex of Rs 120 crores which will take its total capacity to 1,67,000 and Suryalata is targetting topline of Rs 500 cr in 2014.Suryalata has been reporting superb results due to robust demand in domestic as well as export market which resulted in higher selling realization whereas raw-material prices are under check.Current market cap of company is just Rs 17 crores as against 2011 sales of 249 crores and 2011E NP of 20 crores. Stock is trading at less than 1x FY11Eps which is really cheap considering that textile industry's prospects have brightened considerably. It may be noted that Suryalata Spinning is producing Pol/Viscose yarn and hence is not affected by sharp rise in raw cotton prices.Suryalata can definitely deliver 35% returns in the next 12-15 months period.
cmp:50
code:514138
Story:Hyderabad-based Suryalata Spinning is engaged in production of Poly/Viscose blended yarns in different counts and blends for domestic as well as exports markets. Company is exporting to over 30 countries including North America South America, Middle East, Canada etc.It has installed capacity of 72,000 spindles.Its equity is just 3.27 crores with excellent profit margins and current marketcap is very low.Company is installing another 35000 spindles at capex of Rs 65 crores which will be funded by way of 40 cr debt and 25 crores Internal accruals and preferential offer money.PROMOTERS HAVE TAKEN 4 LAC CONVERTIBE WARRANTS @ Rs 110/.In Phase-II,Company plans to add another 60,000 spindles at capex of Rs 120 crores which will take its total capacity to 1,67,000 and Suryalata is targetting topline of Rs 500 cr in 2014.Suryalata has been reporting superb results due to robust demand in domestic as well as export market which resulted in higher selling realization whereas raw-material prices are under check.Current market cap of company is just Rs 17 crores as against 2011 sales of 249 crores and 2011E NP of 20 crores. Stock is trading at less than 1x FY11Eps which is really cheap considering that textile industry's prospects have brightened considerably. It may be noted that Suryalata Spinning is producing Pol/Viscose yarn and hence is not affected by sharp rise in raw cotton prices.Suryalata can definitely deliver 35% returns in the next 12-15 months period.
Bombay Rayon Fashions Ltd:-Buy/sell/,growth prospects and recommendation,news and results,target price and analysis,views and outlook,multibagger
Scripscan:Bombay Rayon Fashions Ltd
cmp:270
Traded in:Nse-bse
Story:A textile company may be an unlikely candidate to beat market returns, but the stock of Bombay Rayon Fashions has had a comparatively better run.The company manufactures fabric and garments for the domestic and export markets, allowing it to make the most of opportunities in the global and burgeoning domestic markets.Further, even while concerns over slowing developed economies loomed large, Bombay Rayon had used its large manufacturing capacities to its advantage during the previous slowdown.Retailers and manufacturers overseas had looked to consolidate suppliers to lower costs.Another factor aiding the stock was an open offer at Rs 300 for 2.84 crore (20 per cent) of the company's shares.The open offer price was at a premium of 7.5 per cent to the market price at the time of announcement.The open offer was initially meant to close by June 18 this year. It, however, faced delays, with offer eventually closed on November 23.Revenues have been steadily growing over the past two years. The company has kept up revenue growth in the current fiscal too, growing 21 per cent in the first six months.However, rising interest costs emerged a damper on profits spiralling 45 per cent for the half-year ending September. Net profits, as a result, declined by three per cent.
cmp:270
Traded in:Nse-bse
Story:A textile company may be an unlikely candidate to beat market returns, but the stock of Bombay Rayon Fashions has had a comparatively better run.The company manufactures fabric and garments for the domestic and export markets, allowing it to make the most of opportunities in the global and burgeoning domestic markets.Further, even while concerns over slowing developed economies loomed large, Bombay Rayon had used its large manufacturing capacities to its advantage during the previous slowdown.Retailers and manufacturers overseas had looked to consolidate suppliers to lower costs.Another factor aiding the stock was an open offer at Rs 300 for 2.84 crore (20 per cent) of the company's shares.The open offer price was at a premium of 7.5 per cent to the market price at the time of announcement.The open offer was initially meant to close by June 18 this year. It, however, faced delays, with offer eventually closed on November 23.Revenues have been steadily growing over the past two years. The company has kept up revenue growth in the current fiscal too, growing 21 per cent in the first six months.However, rising interest costs emerged a damper on profits spiralling 45 per cent for the half-year ending September. Net profits, as a result, declined by three per cent.
Sudar Garments Ltd:-Buy/sell/,growth prospects and recommendation,news and results,target price and analysis,view and outlook,multibagger
Scripscan:Sudar Garments Ltd
cmp:100
Code:533332
Story:Sudar Garments is engaged in the business of manufacture of garments for men's wear, women wear and kids wear. It has manufacturing facility at Khalapur Taluk, Raigad District, Maharashtra. The company is an apparel manufacturer with capability of designing and manufacturing involving cutting, body stitching, washing, Ironing and finishing.Limited experience in handling retail or franchise business and existence of already strong retail chains and various brands in the market is a major threat to the company to establish and strengthen its retail share.Highly competitive retail market and spike in yarn and fabric prices exert pressure on margins.Despite having own brand "Glory to Glory", major part of the sales were to wholesalers and Merchant exporters.The company also lacks long-term export contracts.The Operations are subjected to high working capital requirements.It is fully dependent on the external suppliers for fabrics, which constitute 90% of the total raw material cost.Any material shortage or interruption in supply of raw materials and volatility in the prices will impact the business.The company's manufacturing operations are labor intensive and depend on the availability of the personal.Nearly 95% of the company's employees are employed on contract basis.The company derives 99% its revenues from just 5 customers.So any loss of one or more customers or reduction in their demand could adversely impact the business of the company.On the other hand, significant portion of the company sales (more than 95%) were on cash credit.Delays associated with the collection of receivables from the customers or receivables turning bad will adversely impact the business operations.The company has negative cash flows from operating activities in FY 2006, FY 2007, FY 2010 and HI FY 2011 due to increase in the trade debtors and Inventories.The company ended fy11 with 115crs in sales and 7.7crs in profit which gaves an eps figure of only 4rs.There are two basic issues here.Relative to smaller scale of operations, the company has disproportionately higher equity.Secondly, non-integrated apparel players (without own yarn / fabric manufacture) are witnessing fall in margins.Uninspiring numbers and high valuations makes me wary of the counter.Sell at rallies.
cmp:100
Code:533332
Story:Sudar Garments is engaged in the business of manufacture of garments for men's wear, women wear and kids wear. It has manufacturing facility at Khalapur Taluk, Raigad District, Maharashtra. The company is an apparel manufacturer with capability of designing and manufacturing involving cutting, body stitching, washing, Ironing and finishing.Limited experience in handling retail or franchise business and existence of already strong retail chains and various brands in the market is a major threat to the company to establish and strengthen its retail share.Highly competitive retail market and spike in yarn and fabric prices exert pressure on margins.Despite having own brand "Glory to Glory", major part of the sales were to wholesalers and Merchant exporters.The company also lacks long-term export contracts.The Operations are subjected to high working capital requirements.It is fully dependent on the external suppliers for fabrics, which constitute 90% of the total raw material cost.Any material shortage or interruption in supply of raw materials and volatility in the prices will impact the business.The company's manufacturing operations are labor intensive and depend on the availability of the personal.Nearly 95% of the company's employees are employed on contract basis.The company derives 99% its revenues from just 5 customers.So any loss of one or more customers or reduction in their demand could adversely impact the business of the company.On the other hand, significant portion of the company sales (more than 95%) were on cash credit.Delays associated with the collection of receivables from the customers or receivables turning bad will adversely impact the business operations.The company has negative cash flows from operating activities in FY 2006, FY 2007, FY 2010 and HI FY 2011 due to increase in the trade debtors and Inventories.The company ended fy11 with 115crs in sales and 7.7crs in profit which gaves an eps figure of only 4rs.There are two basic issues here.Relative to smaller scale of operations, the company has disproportionately higher equity.Secondly, non-integrated apparel players (without own yarn / fabric manufacture) are witnessing fall in margins.Uninspiring numbers and high valuations makes me wary of the counter.Sell at rallies.
Shekhawati Poly-Yarn Ltd:-Buy/sell/,growth prospects and recommendation,news and results,target price and analysis,view and outlook,multibagger
Calls review:Shekhawati Poly-Yarn Ltd
Suggested sell price:47(12.1.11)
Present price:23
Returns:50%%
Link:http://www.arunthestocksguru.com/2011/01/shekhawati-poly-yarn-ltd-blind-sell-at.html
Scripscan:Shekhawati Poly-Yarn Ltd
Cmp:47
Fair value:15rs
Traded in:Nse-bse
Story:Started in 1990 Mumbai based Shekhawati Poly-Yarn Ltd (SPY) is into manufacturing of Polyester Texturised Yarn & Twisted Yarn.Polyester Texturised Yarn (PTY) mainly used for manufacturing apparels i.e. suiting, shirting, dress materials, saris,hosiery, knitted fabric, zipper fastener, curtain & industrial cloth as also to manufacture fancy yarn for high value dress materials and upholstery. Polyester Texturised Yarn is obtained after further processing of POY.Presently, Shekhawati has 20 Texturising Machines with an installed capacity of 13,200 MTPA to produce PTY. It also has installed 5 TFO machines to produce Twisted Yarn with installed capacity of 600 MTPA. Company has implemented an integrated facility at Silvassa for manufacturing PTY with a total project cost of Rs. 40.15 Crores.Under this Company has established Yarn Texturising Facility of 14200 MTPA with 20 Texturising Machines.SPYL has client base in Mumbai, Bhiwandi, Surat, Ludhiana, Secunderabad, Meerut, Panipat, Delhi, Bhilwara, Erode, Salem, Coimbatore, Ichalkaranji, Malegaon and Calcutta markets. Shekhawati's manufacturing units is located at Silvassa, which is near to Bhiwandi and Surat, the major consumption centres of Texturised Yarn.Textile is stagnant industry not only in India, but also globally. The margins are low in the industry is a whole.Shekhawati Poly-Yarn listed today in the bourses and ended at 47rs with massive volumes.At present prices its quoting at over 30 times its fy11 earnings which is terribly over expensive.To me the fair value is at 15rs.
Present update:Still dont like the valuation and maintain my price target of 15 bucks.Investors having it should sell at rally.
Suggested sell price:47(12.1.11)
Present price:23
Returns:50%%
Link:http://www.arunthestocksguru.com/2011/01/shekhawati-poly-yarn-ltd-blind-sell-at.html
Scripscan:Shekhawati Poly-Yarn Ltd
Cmp:47
Fair value:15rs
Traded in:Nse-bse
Story:Started in 1990 Mumbai based Shekhawati Poly-Yarn Ltd (SPY) is into manufacturing of Polyester Texturised Yarn & Twisted Yarn.Polyester Texturised Yarn (PTY) mainly used for manufacturing apparels i.e. suiting, shirting, dress materials, saris,hosiery, knitted fabric, zipper fastener, curtain & industrial cloth as also to manufacture fancy yarn for high value dress materials and upholstery. Polyester Texturised Yarn is obtained after further processing of POY.Presently, Shekhawati has 20 Texturising Machines with an installed capacity of 13,200 MTPA to produce PTY. It also has installed 5 TFO machines to produce Twisted Yarn with installed capacity of 600 MTPA. Company has implemented an integrated facility at Silvassa for manufacturing PTY with a total project cost of Rs. 40.15 Crores.Under this Company has established Yarn Texturising Facility of 14200 MTPA with 20 Texturising Machines.SPYL has client base in Mumbai, Bhiwandi, Surat, Ludhiana, Secunderabad, Meerut, Panipat, Delhi, Bhilwara, Erode, Salem, Coimbatore, Ichalkaranji, Malegaon and Calcutta markets. Shekhawati's manufacturing units is located at Silvassa, which is near to Bhiwandi and Surat, the major consumption centres of Texturised Yarn.Textile is stagnant industry not only in India, but also globally. The margins are low in the industry is a whole.Shekhawati Poly-Yarn listed today in the bourses and ended at 47rs with massive volumes.At present prices its quoting at over 30 times its fy11 earnings which is terribly over expensive.To me the fair value is at 15rs.
Present update:Still dont like the valuation and maintain my price target of 15 bucks.Investors having it should sell at rally.
Hindoostan Mills Ltd:-Buy/sell/,growth prospects and recommendation,news and results,target price and analysis,view and outlook,multibagger
Scripscan:Hindoostan Mills Ltd
Code:509895
cmp:330
Story:This is probably one of the oldest spinning and weaving mills in India. Incorporated way back in 1873, even 138 years on, it has managed to keep up with the times and that too, while making profits. The textile mill, with facilities in Karad, Maharashtra, for Q1FY12, posted a topline of Rs.22 crore, which YoY was a jump of over 15 times. Thus one would have expected the company to end the first quarter with a bumper profit but no such luck; it ended with a net profit of Rs.56 lakh, which was 14% higher on a YoY. The robust topline did not get translated into an equally robust bottomline on account of raw material costs, which was up 20 times at Rs.16 crore.The company’s equity is small at Rs.1.66 crore and it is sitting on a huge reserves of Rs.93 crore as at 31st March 2011. The Rs.10 face value stock, has an EPS of Rs.3.37 for the quarter, which on an annualised stands at Rs.13.49.Promoters hold 50.77% stake.
Code:509895
cmp:330
Story:This is probably one of the oldest spinning and weaving mills in India. Incorporated way back in 1873, even 138 years on, it has managed to keep up with the times and that too, while making profits. The textile mill, with facilities in Karad, Maharashtra, for Q1FY12, posted a topline of Rs.22 crore, which YoY was a jump of over 15 times. Thus one would have expected the company to end the first quarter with a bumper profit but no such luck; it ended with a net profit of Rs.56 lakh, which was 14% higher on a YoY. The robust topline did not get translated into an equally robust bottomline on account of raw material costs, which was up 20 times at Rs.16 crore.The company’s equity is small at Rs.1.66 crore and it is sitting on a huge reserves of Rs.93 crore as at 31st March 2011. The Rs.10 face value stock, has an EPS of Rs.3.37 for the quarter, which on an annualised stands at Rs.13.49.Promoters hold 50.77% stake.
Friday, December 23, 2011
Textile sector:-Industry outlook/prospects/competition/high and low prices/beneficiaries/listed stocks/recommendation/manufacturers/views/potential
India, once considered the leader in textile exports to the US, is now lagging behind Bangladesh, China and Vietnam, reveals the data from US Department of Commerce, Office of Textiles and Apparel (OTEXA). In fact, the country has lost a bigger share of the textile export market pie to Vietnam over the past three years.
Indian textile exporters are increasingly finding it difficult to match lower prices offered by Southeast Asian companies because of relatively higher labour and operating costs. The competition is more intense in the garment segment, which accounts for three-fourth of the total textile exports to the US. The garment segment offers better realisations compared to total textile exports.
According to the data, players in the other regions charge 11-22% lesser per square metre equivalent (SME) of apparels to US buyers when compared with Indian billing rates. For instance, in the first seven months of this year, India earned $3.6 per SME from garment exports to the US. This compares with $2.8 per SME for Bangladesh, $3 per SME for China, and $3.2 for Vietnam.
Cost arbitrage helped Bangladesh, which exports garments to the US at the lowest rates among the four competing nations, to increase its share in dollar terms by 220 basis points (bps) to 6.4% between 2007 and 2011. Vietnam increased its share by 270 bps to 8.7% and China by a whopping 640 bps to 50.6%. In comparison, India's share improved by a meagre 145 bps to 8.4%.
So far in 2011, sales volumes dwindled for China and India, while Bangladesh continued to report a healthy 10% growth in apparel exports to the US. For Vietnam, exports grew at a robust 12.4% during the review period from the year-ago level. This makes it difficult to ascertain the impact of a possible fall in the US consumption due to the current economic uncertainties. What is also intriguing is that per unit rates have increased handsomely for all the four players during the seven months ended July 2011. Except for Vietnam, which saw a single digit growth in garment realisation, other countries reported a double digit jump.
Indian textile exporters are increasingly finding it difficult to match lower prices offered by Southeast Asian companies because of relatively higher labour and operating costs. The competition is more intense in the garment segment, which accounts for three-fourth of the total textile exports to the US. The garment segment offers better realisations compared to total textile exports.
According to the data, players in the other regions charge 11-22% lesser per square metre equivalent (SME) of apparels to US buyers when compared with Indian billing rates. For instance, in the first seven months of this year, India earned $3.6 per SME from garment exports to the US. This compares with $2.8 per SME for Bangladesh, $3 per SME for China, and $3.2 for Vietnam.
Cost arbitrage helped Bangladesh, which exports garments to the US at the lowest rates among the four competing nations, to increase its share in dollar terms by 220 basis points (bps) to 6.4% between 2007 and 2011. Vietnam increased its share by 270 bps to 8.7% and China by a whopping 640 bps to 50.6%. In comparison, India's share improved by a meagre 145 bps to 8.4%.
So far in 2011, sales volumes dwindled for China and India, while Bangladesh continued to report a healthy 10% growth in apparel exports to the US. For Vietnam, exports grew at a robust 12.4% during the review period from the year-ago level. This makes it difficult to ascertain the impact of a possible fall in the US consumption due to the current economic uncertainties. What is also intriguing is that per unit rates have increased handsomely for all the four players during the seven months ended July 2011. Except for Vietnam, which saw a single digit growth in garment realisation, other countries reported a double digit jump.
Morarjee Textiles Ltd:-Buy/sell/growth prospects and recommendation,news and results,target price and analysis,view and outlook,multibagger
Scripscan:Morarjee Textiles Ltd
cmp:13
Code:532621
Story:Morarjee Textiles Limited engages in the manufacture and sale of textile products in India. It primarily offers cotton shirting fabrics and printed fabrics. The company also provides woven tops, casual shirts, and garments for women. In addition, it offers fashion fabrics, which include satin, cambric, poplin, lawn, and silk; voiles; guthra, a square head cloth; and embroidered fabrics. The company primarily exports its products to the United States and Europe, as well as Australia, Russia, Colombia, and China.The company posted a set of disappointing numbers for Q2FY12. Net profit, sequentially was down 56% and down 87% on a YoY at Rs.36 lakh. A NPM of less than 0.5%. And this was despite the fact that total operating expenses were down 8%. Obviously the drop in revenue was much more and the drop in costs did not thus really help much, except maybe help keep the company in the black. Forex loss of Rs.2.35 crore too further compounded the matter.The company has a working capital FCCB worth US$ 5 million due for repayment in Jan 2012. Clearly, current fiscal could be very troublesome for the company. The first two quarters have not been good and this FCCN liability vis-à-vis dollar/rupee volatility will only make things tough. For H1FY12, the company’s topline stands at Rs.179 crore, v/s Rs.353 crore for FY11 and net profit was at Rs.1.18 crore v/s Rs.4.65 crore. It seems certain that FY12 will be rocky, unless the company adds on with some ‘extraordinary’ income in the second half.
cmp:13
Code:532621
Story:Morarjee Textiles Limited engages in the manufacture and sale of textile products in India. It primarily offers cotton shirting fabrics and printed fabrics. The company also provides woven tops, casual shirts, and garments for women. In addition, it offers fashion fabrics, which include satin, cambric, poplin, lawn, and silk; voiles; guthra, a square head cloth; and embroidered fabrics. The company primarily exports its products to the United States and Europe, as well as Australia, Russia, Colombia, and China.The company posted a set of disappointing numbers for Q2FY12. Net profit, sequentially was down 56% and down 87% on a YoY at Rs.36 lakh. A NPM of less than 0.5%. And this was despite the fact that total operating expenses were down 8%. Obviously the drop in revenue was much more and the drop in costs did not thus really help much, except maybe help keep the company in the black. Forex loss of Rs.2.35 crore too further compounded the matter.The company has a working capital FCCB worth US$ 5 million due for repayment in Jan 2012. Clearly, current fiscal could be very troublesome for the company. The first two quarters have not been good and this FCCN liability vis-à-vis dollar/rupee volatility will only make things tough. For H1FY12, the company’s topline stands at Rs.179 crore, v/s Rs.353 crore for FY11 and net profit was at Rs.1.18 crore v/s Rs.4.65 crore. It seems certain that FY12 will be rocky, unless the company adds on with some ‘extraordinary’ income in the second half.
Sunday, December 11, 2011
Arvind Ltd:-Buy/sell/,growth prospects and recommendation,news and results,target price and analysis,view and outlook,multibagger
Scripscan:Arvind Ltd
cmp:60
Code:500101
Story:As expected, like FY11, the company ended Q1FY12 on a high note, keeping the growth momentum going as others struggle to sustain. The company attributed the growth in profits to a rise in revenues coupled by improvement in operating margins in both textiles, brands and retail businesses. Its consolidated net profit surged over two-fold to Rs.61.05 crore on a YoY. Net sales rose to Rs 1,180.17 crore v/s to Rs 838.97 crore in Q1FY11. Overall growth was led by growth in domestic market on the back of strong B2C business model which Arvind has created. With fall in cotton prices, the demand for fabrics, which has been sluggish for past few months, is expected to only rise.Raw material cost on YoY rose 31% and employee cost was 14%. Interest cost is pretty high at Rs.84 crore, a rise of 29% on YoY. With current spike ups in interest rates, this cost is expected to rise further in the coming quarter. Arvind is banking big on its realty business in current fiscal. It has already formed a JV for a large township project with Tatas for its 134 acres into a SPV. 50% of the value of land, Rs.125 crore is expected to accrue to the company in current fiscal. For FY12, the company hopes to notch up a turnover of around Rs.4800 crore and if it is able to maintain the same margins, then a net profit of around Rs.195 crore. On an equity of Rs.257.81 crore (includes Rs.3.41 crore from merger with Arvind Products) the FY12 EPS of Rs.7.55 discounts the current price by around 8 times. A good bargain for the largest denim making company in the world
cmp:60
Code:500101
Story:As expected, like FY11, the company ended Q1FY12 on a high note, keeping the growth momentum going as others struggle to sustain. The company attributed the growth in profits to a rise in revenues coupled by improvement in operating margins in both textiles, brands and retail businesses. Its consolidated net profit surged over two-fold to Rs.61.05 crore on a YoY. Net sales rose to Rs 1,180.17 crore v/s to Rs 838.97 crore in Q1FY11. Overall growth was led by growth in domestic market on the back of strong B2C business model which Arvind has created. With fall in cotton prices, the demand for fabrics, which has been sluggish for past few months, is expected to only rise.Raw material cost on YoY rose 31% and employee cost was 14%. Interest cost is pretty high at Rs.84 crore, a rise of 29% on YoY. With current spike ups in interest rates, this cost is expected to rise further in the coming quarter. Arvind is banking big on its realty business in current fiscal. It has already formed a JV for a large township project with Tatas for its 134 acres into a SPV. 50% of the value of land, Rs.125 crore is expected to accrue to the company in current fiscal. For FY12, the company hopes to notch up a turnover of around Rs.4800 crore and if it is able to maintain the same margins, then a net profit of around Rs.195 crore. On an equity of Rs.257.81 crore (includes Rs.3.41 crore from merger with Arvind Products) the FY12 EPS of Rs.7.55 discounts the current price by around 8 times. A good bargain for the largest denim making company in the world
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