This is my first topic in VP group…Thanx to all members and moderators…
Recently I came across an interesting company DCM Nouvelle Limited. DNL is a Hissar based cotton yarn manufacturer with spindle capacity of 1,15,000. This textile unit has been operational since 1991. Till March 31, 2019 the unit was part of DCM Limited (rated CRISIL D/CRISIL D) post which it was demerged into DCM Nouvelle Limited via NCLT order.
Company has posted excellent result H1 FY 22…
Pros
Revenues during H1 fy 22 almost doubled … H1 Fy 22 - 433 vs H1 FY 21- 223 crore…PBT increased to 94 crores from loss of 8 cr corresponding year…Capacity expansion carried out for 25 cr… At the same time reduced borrowing by 98 crores…Inventories also reduced by 70 crore…
Crisil has upgraded rating to BBB positive from stable in Aug this year…
DNL is expanding its spindle capacities by 44000 (~40% of existing capacity). The entire project is expected to cost Rs 195 crore and is expected to be funded by 75% debt and 25% equity. The enhanced capacities are expected to operationalize from third quarter of fiscal 2023.
The textile unit has continued to be operated by the same family members since its inception in 1991. Long track record of presence in the cotton textile industry has helped promoters to not only understand the dynamics of various markets (both domestic and export) but also establish relations with its customers and suppliers. This is reflected in length of relationship with few customers ranging beyond 2 decades.
DNL’s manufacturing unit is located in Hissar which is a major cotton-growing belt. DNL procures majority of its raw material requirements from various traders and ginners situated locally which help it reduce the logistics cost and also ensure timely availability of raw materials for continuous business operations.
Technical
Last 05 months trading volumes increased multifold and is trading at ATH…
Cons
Negative found is increase of receivable by 34 crore this half year.
Cyclical business.
Ravi Vira Gupta has stepped down from the .position of the Independent Director of
the Company with effect from October 16, 2021 due to personal reasons.
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