Lahoti Overseas - Turnaround or Opportunity?

Lahoti overseas is primarily in the business of yarns, it exports quality Cotton Yarns from India’s leading spinning mills. Company’s range covers a wide variety of Cotton Yarns including carded, combed & compact ring spun yarns of coarse & fine counts, ply yarns and special yarns, it also expanded to other fibers and offering yarns like Viscose Spun, Polyester Spun, Polyester DTY, Linen, PVA, Blended Yarns and Slubs. They have over 100,000 spindles under their control to produces high quality yarns.
1990: Company established as a cotton yarn exporting firm in partnership.
1995: It became a Public Listed company in just 5 years and also won the award for the Highest Export Performance in Cotton Yarns.
2000: Our portfolio expanded to include Fabrics, Polyester, Viscose, DTY and Dyed Yarns.
1995-2016: Almost every year company is being awarded from Texprocil in Merchant Exports (Gold, Silver, Bronze), Non-quota Exports etc.
2014: Started with the idea of having commission spinners to have full control on quality & production.

Product range
• Yarns
Cotton, Synthetic Ring Spun, Filament and Texturized, Dyed and Melange, Bamboo, Blended, Core Spun, Recycled,Eli Twist
• Fabrics
Woven, Knitted, Denim, Numbers Ducks, Plain, Drill, Twill, Drop Cloths, Sheeting
• Organic & BCI Cotton Yarns
• Raw Cotton

Market cap: 88.18 Cr
Revenue FY17: 565.97 cr
Net profit FY17: 11.23 Cr

Current Price: 30.25
Book Value: 35

Stock P/E: 7.85
Price/Book Value 0.80
Dividend Yield 1.32%

In last quarter Company posted highest quarterly sales, PAT, EPS in recent years.
Company is treading dirt cheap @ P/B 0.8, P/S 0.15, P/E: 7.85 despite of excellent result throughout the year.
Company is continuously paying dividend every year.
Company has expanded its international markets successfully, and exports across the globe now.
D/E ratio much improved recently.
Poor ROE and PAT margin.
Slowdown in demand could impact their export business.

disc: have minor tracking position.

I was studying the last annual report of this company.

Management forayed into wind power which is not the core business and as per the annual report they expect to do better in wind power and the margins in core business hasn’t improved and no positive guidance from the management. Hence, i gave up on this. Will re look into this again. Can you please revisit the annual reports if I am missing something.

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and net profit also includes other income of around 7 cr. excluding that if we look at it, it does not look cheap.

Yes, correct, if we remove the other income (mostly from their investing activity, I guess), then the result is not extra ordinary.