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