Amarjothi spinning mill ltd is Tirupur based speciality yarn manufacturers promoted by Mr.rajan very good reputed person in Tirupur it started in 1992 and been consistently growing. There speciality is in supply of colour melange yarn and special purpose dyed yarn like anti bacterial fire retardant and oil and water repellent and in blended segment they have huge options which even includes bamboo soya model and various blend combination.
They are basically serving to large garment manufacturers and hosiery manufacturers in Tirupur area with organic certification as per Oeko-Tex standard they are able to even increase there export market in fy 14 export stood around 27 cr around 13% of the revenue and they have very good brand name among the local hosiery and garment manufacturers in Tirupur
Fy 15 Rev around 200 cr EBITA of 44 cr and net profit of 14 cr and debt is around 85 cr half of it taken from the promoters they have shown consistent OPM OF greater than 20% the fy 14 npm 9% and fy 15 6.5% there capex of installing the imported machinery is completed in fy 14 and fy 15 which will be seen in improving revenue in fy 16 they are paying dividend regulary and avg ROE above 22% and ROCE above 28% available at around 5 PE
Compared to others in this sector this seems undervalued with the niche area in value added colour blended yarn they will be able maintain a good NPM
Also in the share holding pattern we can see Mr Anil Kumar Goel holding around 4.2% increased from 2.5% to 4.2% in fy 15 this information is posted only for awareness and not to be considered as any sort of recommendations from Mr.anil Kumar Goel.
Also off late there is huge increase in volume of shares with high delivery volume as regards the valuation part please post your suggestion
Disclosure. Iam invested a tracking qty.
I am a newbie here so please treat my response for what it is worth. 
I took a cursory glance at the numbers and here’s my take:
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This is a microcap of 69cr market cap only. So we need to be careful.
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Some of the profitability ratios in the recent past look good. However, the profit numbers tend to swing a bit, so I’d exercise caution. For instance, FY11 EPS was 14.5 but 5 in FY12. Again FY EPS was 30 in FY14 but 19.5 (trailing) in FY15. Maybe the profits need to be consistent.
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I am wary of companies with Debt/Equity of close to 1 or beyond. In previous years (FY14 onward) the Debt/Equity is 1.7 and beyond and that is concerning for me.
We might be able to make a quick buck if cotton prices and the rest help in keeping costs low but I am not sure of the predictability and consistency of earnings.
This is my first post here, so please excuse the errors, if any. 
first of the all the tail winds are in favour of textile sector and this company has consistent in maintaining operating profit margin and cash flow from operations
secondly if you read the annual report the 53 cr loan was taken from the promoters and not from the bank even that was used for the installing dye machine fong in the 12 acre campus in perundurai which is very modern coloring plant
there speciality is in blended yarn pre coloured which is mainly preferred by garment manufactures and inner garment manufactures
also the 5 yr cagr growth in revenue is 22% and profit growth 40%
the average return on equity 5 yr 22% and growth in return on equity on 5 yr is 21% the roce avg 16% This year they have reduced the long term debt and they have very good interest coverage ratio also note the last three year cash flow from fy 12 to fy 14 is 125 cr and fy 14 is 30 cr promoters has not pledged any shares and paying diviedend regularly with opm and npm set to improve we can expect the market to rate it along with it peers
http://www.indiantextilemagazine.in/spinning/amarjothi-emerging-global-leader-melange-yarn/
The above article speaks well about the company and its future prospects.
Did some digging on this point and below table shows the interest cost which the firm is paying out to promoters. Interest paid is on higher side and comes across as a negative point.
We still need to identify what would trigger the growth. The historical data which was provided in AR do not indicate a strong growth in production numbers so far. Please refer below table:
Still trying to figure out if ASML is a regional player/regional Leader or has a considerate market share to be qualified as a big melange yarn maker.
Disclosure: Not Invested.
Sharing the Corporate Video
Disclosure: Invested.
Increasing interest is a worry, thus I had not invested some6 months back in this.
Coming from Apparel background - Company enjoys good reputation in market as suppler. If I am correct they still hold Mills in prime location of Tirupur which can be assets play in long run.
But still need to watch closely.
Disc: Not invested
@brajeshrawat yes, interest rate is a concerning point…specially when loans can be availed by them at lower rate…given their good business.
Can you also help throw some more light on the position that co. enjoys in the melange yarn segment…is it a leading player in just that region or in the melange yarn segment itself? What is the driver for that?
Regards,
Yogansh Jeswani
Disclosure: Invested
yogansh this qtr dec shareholding pattern shows promoter reduced holding by 3% any idea why they have reduced there holding and also there is no sast disclosure. kindly post feed back if you come across the details pl.
http://www.bseindia.com/corporates/shpSecurities.aspx?scripcd=521097&qtrid=92.00
regards
disl invested thinking of reducing because of reduction in promoter holding
Yes indira they have sold nearly 3,40,000 shares even without disclosing under SAST regulations to the exchange. Can it be because they expect this qtr to be on the negative side like March or something more I don’t know looks fishy though.
Regards
Adrian This time when I was in Tirupur I happened to meet premChander wife nandini who has sold the holding they have sold the shares to tie some cash problem arised by demonitisation and nothing to worry and they still command the top position in the speciality melange yarn segment in this part also as you worried this qtr results are good nothing to worry.
The dec qtr normally are on the lower side but this time it is 46 cr sales 10 cr Ebita and 3.5 cr net profit on 9 month basis it is 161 cr sales and 33 cr Ebita and 15 cr net profit and 21 rs eps with cash on hand around 29 cr.
With Anil kumar Goel still holding a large chunk we can think of a good appreciation from here.
Even I did not notice they have given the disclosure it is available in there website but the bse has not uploaded it. But even there some HNI has bought a big chunk.
http://www.bseindia.com/corporates/anndet_new.aspx?newsid=83c4818a-cbe7-4284-88b1-cac325cfa798
Hello indira ji long time two of your hidden gems has turned 5x thank u.
I went to perundurai sipcot for my work with Britannia ind there Amarjothi textiles has a huge fabric processing factory around 12 acres specialists in unquie natural colour dyes. I also met with the local textile guys they say Amarjothi speciality is in there colour shades the kind of colour shades produced by them is very difficult to replicate there only competitors is Sulochana textiles an unlisted player there buyers are manufactures of niche knitting companies with some big names in the list. Also the installed capacity of there mill is around 12000 tpa so the scaling up will not be a problem they even outsource the regular yarn from other manufactures recently they have introduced fancy yarn variety in the market which is actually in huge demand.
They have had a tie up Italian Mnc for quality enchantment of melange yarn by training there work force also the md is fore seeing oppurtunity in fany fabric. The mill in gobi instead of capacity addition has under gone a huge modernistation whereby reducing the labour dependany.
This fy they have mostly reduced there external debt and it fully on promoter loan with operating cash improving hugely and 30 cr as cash in hand on dec 16 balance sheet there is Chance of some debt reduction also.
There working capital seems to be high but the Roce metric is improving for the last three years we are seeing the average np improving and stabilising I think Npm will be around 10% to 12% and Opm above 20% to 22 % is quite good which looks on the cards. Even if they are able to scale up by another 2000 tons there will be huge improvement in top line and bottom line
Secondly the market cap around 100 cr I think is 60% of the assets combined the mill in globI and processing unit in sipcot around 15/20 cr profit 45 cr Ebita and 13 cr depricituon cost this is available at less than 4 EVEBITA at the CMP
I think you have found another good one thank once again and regards
Prakash
2 .Also I went to the temple in near Coimbatore in then Tirupathi in Karamadai and had a chance to speak with my friend working in KG DENIM this is also an excellent company even though there main is from denim manufacturing there home textile division is growing very nicely at more than 25% cagr and the retail brand trigger has a good retail presence in th local market does around 100 cr. The specialty is stone washed denim they don’t use the regular sand blasting technique which is not accepted for exports they use some vapur process which has very good export market the financials are improving the power division is also perfroming well and they have huge land bank in Karamadai even this temple is built in there premises.
Looks promising here also I see Anil kumar Goel and rajiv khanna holding above 1%. What is you talke on this.
Discl . Invested
thank u prakash.
as far amarjothi is concerned i have personally seen there shade cards they have made some huge investments for that which you will notice in the bl as intangible assets recently i had a chat with there management they are optimistic about there fancy fabric if they repay the promoter loan we could see a good improvement in the bottom line. the good thing they are in niche product as far as the tri and mullti modal melange yarn.
i do hold kg denim mr.sriramlu is a textile gradutate and very good person there family is very reputted in coimbatore the product mix is excellent even in denim they have bottom fabric low hugh weight also they have shirting fabric home textiles and terry towel. the interest cost is on the higher side but they will able to reduce the debt in coming years even now the debt is reduced by 30 cr this fy now around 110 cr good thing is at the present capex level they can achieve 800 cr there retial divisin is yet to become cash postive but opm wise they should be able improve another 200 basis point and the net ptofit can go upto 40 cr.
now days iam hesitant to start new thread in vp other wise since you asked iam giving the followin
hinduja global solutions looks good
sharda motors there exhaust products will get a boost
samkrg pistons small but excellent pistons and ring play
sandesh ltd good in gujarat media gujarat elections and hidden real estate value
hmvl slow and steady
there are some two three micro caps which i will mail u later.
have a nice day once again thanks for your ground work.
regards
with the competitor sulchona not able to supply multi modal glow variety of melange yarn amarjothi melange is in huge demand in the local market exxpect a very good quarter result with np above 23/25 cr and eps of 33/35 even at historical pe 0f 7/8 it should be trading at 210/225
Indira madam and Ayushji for the last two three weeks a huge accumaltion is happening at 90% delivery volume in a very narrow price range of 152/155 any idea who is buying and selling technical narrow band inflection seen on the upper side
Company :AMARJOTHI SPINNING MILLS LTD. 521097
Period: 15-Feb-2017 to 30-Mar-2017
All Prices in
Date Open High Low Close WAP No. of
Shares No. of
Trades Total Turnover Deliverable Quantity % Deli. Qty to Traded Qty * Spread
H-L C-O
30/03/17 152.60 156.00 152.60 154.00 155.07 28,154 100 43,65,871 27,270 96.86 3.40 1.40
29/03/17 152.00 155.00 151.15 152.00 152.40 24,324 77 37,06,953 22,605 92.93 3.85 0.00
28/03/17 152.00 154.00 150.10 152.00 152.00 2,783 66 4,23,011 1,761 63.28 3.90 0.00
27/03/17 154.90 155.00 151.00 152.50 153.65 8,695 66 13,35,987 7,530 86.60 4.00 -2.40
24/03/17 152.70 155.00 150.70 153.70 153.07 6,346 84 9,71,410 4,489 70.74 4.30 1.00
23/03/17 154.00 154.00 150.00 152.70 152.21 8,061 96 12,26,936 5,887 73.03 4.00 -1.30
22/03/17 152.60 154.00 150.80 153.60 152.81 2,791 48 4,26,501 2,394 85.78 3.20 1.00
21/03/17 153.80 154.50 150.00 151.55 151.82 5,317 73 8,07,229 3,508 65.98 4.50 -2.25
20/03/17 153.90 154.05 150.50 153.50 153.10 6,069 64 9,29,161 4,667 76.90 3.55 -0.40
17/03/17 152.00 153.95 150.25 151.15 151.61 4,270 74 6,47,385 2,758 64.59 3.70 -0.85
16/03/17 154.00 155.00 150.55 152.20 153.17 7,229 79 11,07,300 6,371 88.13 4.45 -1.80
15/03/17 154.70 155.00 152.00 153.60 154.53 14,728 51 22,75,940 14,159 96.14 3.00 -1.10
14/03/17 155.00 155.00 152.30 153.95 154.75 18,208 147 28,17,662 16,531 90.79 2.70 -1.05
10/03/17 154.95 155.00 151.50 154.95 154.30 18,268 91 28,18,738 16,178 88.56 3.50 0.00
9/03/17 152.30 155.00 152.00 152.55 152.89 2,677 34 4,09,284 2,407 89.91 3.00 0.25
8/03/17 151.80 159.40 151.75 154.80 155.44 38,547 173 59,91,680 30,342 78.71 7.65 3.00
7/03/17 150.10 154.75 150.10 152.95 152.49 1,651 34 2,51,768 1,463 88.61 4.65 2.85
6/03/17 153.00 155.00 151.00 151.70 152.64 4,739 70 7,23,339 4,031 85.06 4.00 -1.30
3/03/17 150.00 153.90 149.10 152.30 152.27 2,762 51 4,20,564 2,205 79.83 4.80 2.30
2/03/17 151.00 154.00 149.00 151.35 151.42 7,077 90 10,71,632 5,598 79.10 5.00 0.35
1/03/17 148.00 155.00 148.00 153.50 153.32 18,100 143 27,75,002 14,136 78.10 7.00 5.50
28/02/17 148.00 148.00 145.30 145.70 146.06 2,002 41 2,92,422 1,435 71.68 2.70 -2.30
27/02/17 146.05 150.00 146.00 147.15 147.41 2,664 39 3,92,702 2,315 86.90 4.00 1.10
23/02/17 145.35 152.90 145.35 148.00 148.47 948 27 1,40,754 758 79.96 7.55 2.65
22/02/17 151.00 153.80 148.10 149.30 151.05 3,633 68 5,48,766 3,226 88.80 5.70 -1.70
21/02/17 151.50 154.00 148.15 152.50 152.12 4,498 173 6,84,233 3,046 67.72 5.85 1.00
20/02/17 147.55 152.00 147.55 148.50 149.92 6,619 38 9,92,293 6,417 96.95 4.45 0.95
17/02/17 145.95 147.00 144.00 145.80 145.91 1,912 32 2,78,988 1,549 81.01 3.00 -0.15
16/02/17 140.00 145.00 140.00 144.50 142.72 3,304 48 4,71,531 2,191 66.31 5.00 4.50
15/02/17 145.00 145.00 138.00 142.65 140.38 3,280 85 4,60,437 2,440 74.39 7.00 -2.35
indira ji thank u very much multibagger for me excellent qtr result on consolidated basis 9.79 cr net profit and 14 rupee eps
Extraordinary consolidates profits of last two quarters seems to be coming from power cost.
As per Annual Report 2017
Consolidates Power & Fuel Cost is Rs. 7.69 cr.
Standalone Power & Fuel Cost is Rs. 13.15 cr.
Extra profits seems to be coming from Wind Mills.
Notes from AGM
Textile Sector
60% of our turnover is value added yarn. Realisations in value added yarn is around Rs.300 while deposit yarn (normal yarn) is around 170.
We want to go more into value added. Though the competition is everywhere, the margins are better in value added.
We are among the top 5 players in melange yarn. Winsome, Arvind, Vardhaman and others all are in it.
All the best companies are our customers. Tirupur is the hub for textiles. We have customers from HnM, M&S to others.
None of the customers contribute the bulk of turnover. The revenues are highly spread out.
We supply even in very small quantities, say 100 kg or 30 kg. No one does that. We are able to do that because of the infrastructure we have.
We shifted from exports to domestic as we didn’t want to lose the domestic market. All our customers are 100% export oriented. We were getting better margins here.
Producing melange yarn is employee extensive. It requires double the number of employees compared to single shade yarns.
Currently the capacities utilised is around 80%. We can do 20% more volumes from current capacities.
We do need to keep upgrading the spindles for better production. The sale of 9.45 crores was of old spindles.
Amarjothi Color Melange Spinning Mills Ltd was incorporated as a selling arm. However, it didn’t succeed and is closed down.
The sale in promoters of 6.551% was of daughter and wife. It was for personal reasons.
We are reducing the loans. Over 2 years, we would want to reduce it to 0. We have reduced it further.
GST is beneficial for us. We will be saving 2% because of GST.
Recent duty drawback reduction will affect us indirectly as most of our customers are export oriented.
On growth and expansion: Too much competition in the yarn business. No plans of expansion as of now. Tough to maintain existing business. Will utilize the proceeds to repay loan over next 2 years.
Mr. Jaichand looks after the mixing of shades and he devotes his whole time into it.
Power Segment
The units generated from wind mills are tough to sell. We are paid by government after 2 years. The over production is not paid for. Government dosent buy every year, we were lucky this year.
Windmills are functional only in the first quarter.
Wind farms are very old. They are near their end of life cycle. To create same capacity we will have to invest 80-90cr.
Company holds 27% share in the three wind farms partnerships, rest share is owned by promoters.
Hi,
While going thru (AR 2016-17 Page 81), Number of spindles has been reduced to 29K from 37K, any reason for this?
Does anyone know revenue break-up of export versus domestic?
Amarjothi gave a decent June 2018 quarter working.
- YOY Sales growth of 7.42%.
- After bad results in March 2018 qtr, company came back on track with 19% EBITDA margin. YOY margins decreased from 22% to 19% though.
- Other income of Rs. 4 cr. Looks to be profits from asset sale, management hinted about sale of non core assets in last year’s agm.
- One interesting thing is that management increased the Authorised Capital from 9.75 cr. to 10 cr. (NSE listing, capital raising)?
https://www.bseindia.com/xml-data/corpfiling/AttachLive/571ae2e7-1537-4698-a44d-c952d70e8114.pdf