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.
