hi friends,
sorry for bumping in here’s the link for mayur edelweiss report complete
Hello brijwanth,
It is not ok to share paid reports of brokerage houses using Dropbox/similar links. Please do not share what is not free without the express permission of issuing authorities in a public forum.
Folks,
If you see the price action on this stock, it did not move much after the result was announced but there was a mild surge after the con call. Please listen to the con call (available at research bytes). This Edelweiss report would just be rehash of that and no need for any research reports. I entered this stock at 172 level, then bought again at 275 and now accumulating again at CMP.
The management seemed bullish. Poddarji says they’re trying hard and looking at revenues of around Rs 800 Cr once all the six lines are fully operational.
@Rudra, Brijwanth,
One just needs to create a login (free) on Edelweiss site to access this report and many more. So there is no need to uploading it to dropbox and create a private copy ?
hi friends,
sorry for bumping in here’s the link for mayur edelweiss report complete
(in crs)
| Q1 14 | Q1 13 | Growth | |
|---|---|---|---|
| Revenue | 123 | 106 | 17% |
| NP | 14.98 | 11.47 | 30% |
| EPS (rs) | 3.45 | 2.65 | 30% |
interim Div of .70/- per share (14% ).
Emp exp jump of 40%
Depreciation almost doubled.
Other expenses include Forex gain of 49 lakhs and finance cost include Forex gain of 5.81 lakhs
Wholly owned subsidiary in U.S
Mayur Uniquoters Ltd has informed the Exchange that the Board of Directors at its meeting held on August 12, 2014 has considered and approved the opening of the Wholly Owned subsidiary in US.
I dont know why there was such a huge negative reaction. Perhaps the stock is going to undergo some time correction. Obviously at 30times earnings stock has moved ahead of itself a bit. Long term fundamental story obviously remains intact. Question is - what is the opportunity cost?
Don’t forget that the market is also a place for short term activity. The negative reaction is from those people. If it corrects significantly, than it would be a buying opportunity.
Salient points from today’s concall
)- Line 5 was running with 1 shift till last qtr now running with 2 shifts n will run with 3 shifts from Dec 14.
)- Line 6 will start from November 1 2014
)- may go for line 7 also if there is a delay in approval proces for PU plant.
)- Realisation improves to Rs 222/ m from 204/ m 1 year back.
)- supply started to MNC auto producers like GM India,Ford India , XUV from mahindra for expensive model at realisation of 300-350 / m as its stil cheaper then importing from China n local availability
)- min 20% growth assured in qtrs to come
)- only Asian co other than LG chemical to supply to OEMS in USA
)- Talks in advance stage with GM USA expect to clOse the deal by Dec approaching thru Magna the supplier to GM
)- this qtr profit impacted to the tune of Rs 2 Cr due to commission costs in raising PE
)- exports shown a fabulous growth of 40-50 % y on Y
)- Subsidairy being opened in US to give further fillip to exports as local distributor was constrained. Own warehouse will boost the exports
)- furnishing focus being give in India as margins are much better then OEMs n Footwear n huge response of 700 visitors per day at exclusive showroom in Delhi
)- For Footwear industry Q 1 is a traditionally weak qtr n sales are v brisk
)- PU realisation 20% more then PVC
)- exports now 27% of turnover n growing v fast
Good response from Reputed research houses like Ambit,HSBC,CIMB,Equirus, Sundaram MF, Valuequest
Mayur Uni. is expected to undergo time correction for short time but long term story is still widely open.
**I remember WB’s quote here,
**“The stock market is a device for transferring money from the impatient to the patient”
http://media-cache-ak0.pinimg.com/236x/17/99/e3/1799e31167498fe7c3eb4c577874873f.jpg
Mayur is slowly getting into export areas where there is much more competition from European majors, so growth cannot be taken for granted. Also, as it does not have any major distinct competitive advantage, it will find it difficult to sustain a 30% plus growth yoy for many years, which is required for the current valuation to sustain. The silver lining here is that the furnishings space can open up a new growth option for the company.
Edelweiss remains positive on Mayur post results
Mayur Uniquoters Ltd. (MUL) has reported good set of numbers for Q1FY15. Revenues and EBITDA grew by 17% each and PAT jumped by 30% to INR 15 cr, lending credence to its growth story. MUL has been consistently increasing its share in the domestic synthetic leather pie for Auto OEMs, with approvals from major Auto companies. Capacity constraints are expected to ease in FY15, positively impacting the topline. MULâs strong revenue visibility, RoE in excess of 40% supported by strong cost control, better working capital management and negligible debt-equity ratio are positives for the stock. We believe that MUL can sustain CAGR of 23% in revenue and 24% in PAT over FY14-FY16E. We continue to remain bullish on MULâs long-term growth story.
MUL reports impressive growth in Revenue, EBITDA and PAT
MUL recorded an impressive 17% expansion in Q1FY15 topline at INR 125 cr. Exports to global Auto OEMs registered a healthy 40.3% growth at INR 25.84 cr. General Exports saw a 50% growth at INR 7.23 cr. Q1FY15 average realization stood at INR 222/meter, a YoY increase of 8.8%. Volume for the quarter stood at 54.69 lac linear meters, serviced completely from 4 lines and partially from the 5th line. In value terms, Footwear contributed 51% to Q1FY15 revenues and Exports 27%; within Auto OEMs, Exports contributed 21%, Domestic Auto OEMs 10% and Replacement Auto OEMs 7%.
EBITDA in Q1FY15 grew by 17% to INR 24 cr, with EBITDA margins of 19.5%. Gross margins grew by 193bps on the back of a decline in raw material costs. One-off expenditure of INR 2 cr was reported this quarter, adjusting for which EBITDA margins would be 20.9%. PAT for the quarter grew by 30.5% YoY to INR 15 cr.
MULâs growth story intact
MUL commands a 7-8% market share in the Indian PVC market. MUL has steadily increased its exposure to big Auto OEM players. MUL has received approvals and featured in the supplier list of Auto OEMs such as Ford India, GM India and Mahindra SUV500 etc. It is also part of the approval list of suppliers to Ford Worldwide along with Chrysler (USA). It intends to expand its presence in the global market as a key synthetic leather supplier.
Capacity expansion to ease constraints
MULâs current capacity stood at 2.45mn linear meters/month. The 6th line is expected to commence operations from November 2014. This line is expected to produce 600,000 linear meters per month, taking the total installed capacity to 3.05mn linear meters per month post November 2014. The 5th line which is operational on two shifts since July 2014 is expected to operate on a 3-shift basis by December 2014. With this, constraints on capacity would ease materially. The company would consider setting up of the 7th line going forward, keeping in mind future demand.
Foray into PU to drive growth going forward
MUL has planned a foray into PU manufacturing. Global PU suppliers are dominated by Chinese manufacturers, which is 10 times bigger than the Indian industry. PU is the preferred choice of synthetic leather users globally (excluding Auto OEMs). PU realization at INR 250-300 per meter is much higher than PVC realisation of INR 215 per meter. MUL is currently scouting for land for its PU plant as its existing PVC plant faces capacity constraints and would not be able to host the PU plant. Capex for the PU plant stands at ~INR 70-80 cr and would be financed partly by funds raised and rest through debt. As PU production requires lots of water, the company is awaiting approval from Govt. of Rajasthan to use waste water for this purpose.
Financials
| Year to March | Q1FY15 | Q1FY14 | % change | Q4FY14 | % change | FY14 | FY15E | FY16E |
|---|---|---|---|---|---|---|---|---|
| Net sales | 125 | 106 | 17.2% | 122 | 1.7% | 470 | 590 | 708 |
| EBITDA | 24 | 21 | 17.2% | 27 | -11.1% | 93 | 123 | 150 |
| PAT | 15 | 12 | 30.5% | 19 | -19.3% | 57 | 73 | 87 |
| Dil. EPS (INR) | 13 | 17 | 19 | |||||
| Diluted P/E (x) | 31 | 24 | 22 | |||||
| EV/EBITDA (x) | 19 | 14 | 13 | |||||
| ROAE (%) | 41 | 32 | 27 |
We are planning to attend Mayur AGM on Tuesday, 16th Sept. 2014. Any interested VP member from nearby area (Delhi/Gurgaon/Noida etc.) is most welcome to join. Please drop a message here or PM me / Vivek Gautam for co-ordination. Also if you have any question / query which we should ask from Management, please share.
Regards
Mayur AGM updates.
5th line is operational for three shifts starting september start. So Q3 onwards, full effect from that would be visible.
2. OEM Export to Chrysler(85%) and ford (15%). Mayur supplies 60% needs of Chrysler. Management is aware of the fact and working to diversify. In advanced talks with GM for same. Rejection in export stands at2.5% (which from management’s expressions seemed quite low ??)
3. Going forward, emphasis is on OEM export, General export & furnishing
4. General Export: Three Solid guys looking after three geographies of US, Europe and RoW.
5. Furnishing: Plan to create semi distributors under the primary distributor in delhi and take the sale from current 25K linear meter/month to 2 lacs linear meter/month.
6. PU plant is still some time away (min. 2 years). PU requires a lot of water for processing. The area nearby Mayur plants is a Dark zone and water can’t be extracted from ground.
Company working with govt. for approvals for using waste water for the purpose.
A waste water treatment plant with a capex of around 4 Cr. needs to be put. The land will be provided by the Govt. All this is in talks and will take months to materialise.
7. In the process of acquiring land for PU plant, facing some challenges here as well in terms of location,size and pricing. Machinery and technical expertise will be imported from China.
8. PU is an opportunity, which Company is trying to capitalise on. However, company is not very dependent on it for growth. In case of delays in PU 7th line will be put up.
9. Management strives to be amongst top 5 companies in the world in next 5 years.
10. Company is in fashion industry indeirectly (footwears, seat covers) So it pays to add value.
11. FY 15 Capex of 25cr for 6th line and part of 40 cr for 5th line.
Mr. Poddar patiently answered all & any query, investors had.
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Jagbir,
Just saw your post while posting mine. Not sure if you made it to AGM. I am also in Delhi area. 'll be good to touch base. 'll drop you a message.
Maybe a very naive qst but can someone tell me where to find the latest annual report of Mayur Uniquoters. I looked on their website as well as BSE/NSE but in vain.
Thanks in advance.
"Yes. At the beginning of this year, our capacity was about 1.85 million meters every month. Now we are adding two lines this year which will enhance our capacity by 1.2 million and within next three years from now, we will be adding our capacity to 50 million meters every year. That means we are talking about 2.5 time capacity add in three years time starting from this year."
This company gives positive surprises often as always.
Thanks Atul for the AGM notes.
Since PU plant is some time away, company will focus on the exports business for now. As management predicts 50 million meters per year by FY17.
FY14 : 4 lines - 1.85 million meters per month.
FY15: 5th and 6th line - additional 1.2 million meters/month, Total: 3.05 million meters/month capacity
FY16-17: Additional 1.2 million meters (possibly line 7 and 8), Total: 4.25 million meters/month or 51 million meters/year.
Overall the margins might be lower as Mr. Poddar underlined that RM price softening now needs to be passed on to customers.
NSE bulk deal on Friday - promoters sold to DSP Black Rock MF.
Crude price fall might result in less RawMaterial cost for Mayur and thus improve margins a bit.
Thanks & Regards,
Anil Konda.
These are rough notes I made
Mayur Uniquoters Concall updates:-
Current capacity 2.45mm capacity
5th line is running on three shifts now
6th line will produce around .5 to .6 mm/month will be operational from December 2014 onwards
Trial production on 6th line to start this month
The company is considering setting up 7th line depending on the future demand(which is strong)
The focus is on exports. They want to double amount of exports in next 3 years. Also, they want to get into PU
Raw material consumption has gone down by 1.63% compared to sales
Impact of raw material softening and cotton prices softening:-
The prices of polyester yarn is softening. We generally carry 30 days inventory. Price is fixed based on inventory. When the prices of the crude goes down we will provide benefit to customers, but it will benefit the company also.
Any new customers added?
Chrysler sales has increased by around 8%. We have two programs coming up with them. The first will start in the first quarter of next year and other in the fourth quarter of FY 2016. We have employed people to explore new markets.
Domestic OEM we have got orders from Ford, GM, MNM. The focus is on high quality and prices are near to what we get from exports.
The fifth line is under full production. It will take around one year for full production in the sixth line as there is shortage of manpower.
From mid Nov to March good sales are expected
The plant is running on 95% capacity
The company is expecting good growth as the economy picks up.
PU production will be a greenfield project
Break up of Sales
Exports as % of revenues:-
OEM 16%
General is 5%
Domestic business:-
50-55% Footwear Sales
18-20% Auto OEM
6-8% Furnishing, leather goods (Now focus on this segment) Tied up with two distributors based from delhi and Hyderabad
During monsoon demand is low.
The proposal has been submitted to Raj Gov for the PU plant. The company is very positive about the plant.
CMP 424.65
PE 29
The company is likely to grow its profits at the rate of 30-35% from next quarter onwards. The opportunity size is large and management is capable of delivering.
They said during the concall that in future they will plan in such a way that they do not have capacity constraint.
At CMP stock looks interesting as the downside could be very limited and the company can surprise on upsides. I think the stock can double from here in 2-3 years. The kicker is expansion in margins.
Disclosure invested and adding at CMP
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