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:-
General is 5%
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.
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