Since I could not find any dedicated thread on Indocount, I am posting my AR notes here.
The AR is HUGE. Lots of info. Here goes.
*Expanding into newer geographies like UK, Australia, Middle East, Japan & EU.
*Focused on inventory management whereby our company tracks the client’s inventory to keep goods at optimal levels.
*Aims to increase share of high margin bed linens from 5% to 25% in next 2 years.
*Have patented technology for bed sheets (Which explains their earnings growth and moat. This could keep rising. This is not a commodity player like Nitin).
*Company is focused on maintaining growth and increasing ROA in coming quarters.
On capacity expansion-
*The company was working at near optimal capacity levels during the year. Hence the company has undertaken capex which would increase capacity by nearly 50% (from 45mln mt to 68mln mts). The additional capacity is available in this year and we shall see improved results over the coming year.
*Promoter shareholding rose from 54.33% to 58.95% over the last 12 months.
*Cash from operating activities remains strong at 197crs Vs 102crs YoY.
*85crs spent on capex (fixed assets and capital advances).
***Conclusion- The company is in a good position. New capex has been completed and it will reflect in FY16 revenues and PAT (only issue is that they have not mentioned or given a topline and PAT guidance post new capex). If we assume a 50% capex should atleast result in 25-30% growth (conservatively), then also we should be very happy.
The AR certainly says that they expect growth they way they are opening sales offices across the world. Also their patents and relationships with major US retailers should help them sign new clients.
Disclosure - Holding Indocount since a long time. Vested interest.