2013 annual report is not available also the 2012 is a not so great one. Have tried to collect information from wherever possible
1.0 Fundamentals
1.1 Business
In 1992, as a
measure of backward integration, the company diversified into the Spinning
Industry by putting up a Spinning Plant at Village Simrai, Mandideep, Distt.
Bhopal. To produce high quality value added Yarn for exports, company also put
up Spinning Units at Village Jalalpur, Distt. S.A.S. Nagar, Village Jodhan,
Distt. Ludhiana and Village Jitwal Kalan, Distt. Sangrur, Punjab. The present
spindlage capacity of the company is 4.42 lacs spindles and 1080 Rotors.
Simultaneously the company also established an
ultra modern facility to manufacture 12.5 million pieces of Hosiery Garments.
Today, Company's products i.e. T-Shirts are being exported to reputed
international brands such as GAP, Arrow, Old Navy, Banana Republic, Chaps â
etc.
As a measure of further value addition in the
Company's product the Company has put up a Mercersing cum dyeing plant with a
capacity of 4.5 M.T. per day at Village Lalru, S.A.S. Nagar, Punjab. The
superfine quality Yarn produced by the unit is being used by the manufacturers
of fine quality Garments for exports. The unit is catering to both, the
domestic hosiery garment market as well as export markets.
An ISO 9002 company, the Company has 7 multi
location plants, a range of products, over 60% of which is aimed at export markets
â USA, UK, France, Brazil, Bangladesh, Mauritius, Hondurus, Argentina,
Colombia, Peru, Chile, Netherlands, Japan, Canada, Korea, Taiwan, Hongkong,
Singapore, Egypt and Russia.
1.2 Market Statistics
|
Div & Yield % |
0.89 |
|
Eps |
31.89 |
|
Book Value |
172.6 |
|
Market Cap(Rs.Cr) |
406.58 |
|
Face Value |
5 |
1.3 Sales
For the last 5 years
|
Particulars |
Mar2013 |
Mar2012 |
Mar2011 |
Mar2010 |
Mar2009 |
|
Sales Turnover |
1961.85 |
1696.48 |
1394.70 |
1055.13 |
962.27 |
|
Other Income |
8.13 |
9.32 |
11.55 |
65.71 |
45.07 |
|
Stock Adjustments |
9.17 |
-80.11 |
133.42 |
-4.38 |
-9.11 |
|
Total Income |
1979.15 |
1625.69 |
1539.67 |
1116.46 |
998.23 |
|
Raw Materials |
1065.96 |
1101.99 |
813.06 |
541.78 |
502.15 |
|
Excise Duty |
0.58 |
0.30 |
0.04 |
0.02 |
0.24 |
|
Power & Fuel Cost |
240.36 |
181.74 |
145.45 |
140.25 |
130.13 |
|
Other Manufacturing Expenses |
108.00 |
102.93 |
90.67 |
72.05 |
68.66 |
|
Employee Cost |
138.60 |
111.71 |
108.17 |
77.77 |
70.71 |
|
Selling and Administration Expenses |
80.38 |
69.42 |
59.23 |
81.83 |
85.82 |
|
Miscellaneous Expenses |
15.16 |
32.43 |
23.13 |
7.26 |
48.10 |
|
Less: Preoperative Expenditure Capitalised |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
|
Profit before Interest, Depreciation & Tax |
330.11 |
25.17 |
299.92 |
195.50 |
92.42 |
|
Interest & Financial Charges |
108.51 |
114.18 |
52.21 |
45.04 |
41.39 |
|
Profit before Depreciation & Tax |
221.60 |
-89.01 |
247.71 |
150.46 |
51.03 |
|
Depreciation |
87.55 |
84.44 |
69.78 |
69.86 |
76.11 |
|
Profit Before Tax |
134.05 |
-173.45 |
177.93 |
80.60 |
-25.08 |
|
Tax |
55.66 |
-56.09 |
56.47 |
27.11 |
-8.45 |
|
Profit After Tax |
78.39 |
-117.36 |
121.46 |
53.49 |
-16.63 |
|
Adjustment below Net Profit |
-0.53 |
0.16 |
-1.73 |
0.00 |
0.00 |
|
P & L Balance brought forward |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
|
Appropriations |
77.86 |
-117.20 |
119.73 |
53.49 |
-16.63 |
|
P & L Bal. carried down |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
|
Equity Dividend |
3.61 |
0.00 |
7.21 |
5.41 |
1.80 |
|
Preference Dividend |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
|
Corporate Dividend Tax |
0.61 |
0.00 |
1.17 |
0.90 |
0.31 |
|
Equity Dividend (%) |
20.00 |
0.00 |
40.00 |
30.00 |
10.00 |
|
Earning Per Share (Rs.) |
21.55 |
0.00 |
33.32 |
14.57 |
0.00 |
|
Book Value |
172.41 |
152.01 |
184.48 |
153.63 |
140.57 |
|
Extraordinary Items |
0.74 |
1.84 |
-3.77 |
2.37 |
1.10 |
Segmental results
|
Type |
Audited |
|
Date Begin |
1-Apr-2012 |
|
Date End |
31-Mar-2013 |
|
Description |
Amount (Rs. million) |
|
Description |
Amount (Rs. million) |
|
1. Segment Revenue |
|
|
Yarn |
18,135.69 |
|
Garments |
2,489.07 |
|
Total |
20,624.76 |
|
Less: Inter Segment Revenue |
-1,060.93 |
|
Net sales/income from Operations |
19,563.83 |
1.4 Financial Ratios
|
Years |
Mar2013 |
Mar2012 |
Mar2011 |
Mar2010 |
Mar2009 |
|
Debt-Equity Ratio |
2.08 |
2.09 |
1.80 |
1.41 |
1.42 |
|
Long Term Debt-Equity Ratio |
0.63 |
0.64 |
0.59 |
0.67 |
0.74 |
|
Current Ratio |
1.05 |
1.09 |
1.20 |
1.36 |
1.40 |
|
Fixed Assets |
1.14 |
1.05 |
0.96 |
0.78 |
0.74 |
|
Inventory |
3.51 |
2.66 |
2.16 |
3.06 |
3.17 |
|
Debtors |
5.21 |
4.50 |
4.52 |
4.37 |
4.21 |
|
Interest Cover Ratio |
2.24 |
-0.52 |
4.41 |
2.79 |
0.39 |
|
PBIDTM (%) |
16.83 |
1.48 |
21.50 |
18.53 |
9.60 |
|
PBITM (%) |
12.36 |
-3.49 |
16.50 |
11.91 |
1.69 |
|
PBDTM (%) |
11.30 |
-5.25 |
17.76 |
14.26 |
5.30 |
|
CPM (%) |
8.46 |
-1.94 |
13.71 |
11.69 |
6.18 |
|
APATM (%) |
4.00 |
-6.92 |
8.71 |
5.07 |
-1.73 |
|
ROCE (%) |
13.45 |
-3.15 |
13.49 |
9.82 |
1.30 |
|
RONW (%) |
13.39 |
-19.32 |
19.90 |
10.07 |
-3.22 |
1.5 Shareholding pattern
|
Sep-2013 |
Jun-2013 |
Mar-2013 |
Dec-2012 |
Sep-2012 |
|
|
Promoter and Promoter Group |
64.83% |
64.83% |
64.83% |
64.83% |
64.83% |
|
Indian |
64.83% |
64.83% |
64.83% |
64.83% |
64.83% |
|
Foreign |
-- |
-- |
-- |
-- |
-- |
|
Public |
35.17% |
35.17% |
35.17% |
35.17% |
35.17% |
|
Institutions |
0.03% |
0.03% |
0.04% |
0.03% |
0.03% |
|
FII |
-- |
-- |
-- |
-- |
-- |
|
DII |
0.03% |
0.03% |
0.04% |
0.03% |
0.03% |
|
Non Institutions |
35.14% |
35.14% |
35.13% |
35.14% |
35.14% |
|
Bodies Corporate |
4.53% |
5.09% |
4.66% |
4.23% |
4.93% |
|
Custodians |
-- |
-- |
-- |
-- |
-- |
|
Total |
3,60,65,303 |
3,60,65,303 |
3,60,65,303 |
3,60,65,303 |
3,60,65,303 |
1.6 Quarterly results
|
(in Cr.) |
Sep-13 |
Jun-13 |
Mar-13 |
Dec-12 |
Sep-12 |
Mar-13 |
|
Income Statement |
||||||
|
Revenue |
553.00 |
522.49 |
514.84 |
505.79 |
496.72 |
1,961.28 |
|
Other Income |
0.73 |
0.88 |
3.56 |
1.64 |
1.62 |
8.13 |
|
Total Income |
553.73 |
523.37 |
518.40 |
507.43 |
498.34 |
1,969.41 |
|
Expenditure |
-448.44 |
-436.85 |
-447.59 |
-430.59 |
-416.20 |
-1,645.04 |
|
Interest |
-16.01 |
-23.03 |
-22.86 |
-21.27 |
-26.88 |
-102.76 |
|
PBDT |
89.28 |
63.50 |
47.95 |
55.57 |
55.26 |
221.61 |
|
Depreciation |
-21.65 |
-21.25 |
-- |
-21.87 |
-22.00 |
-87.55 |
|
PBT |
67.63 |
42.25 |
47.95 |
33.70 |
33.26 |
134.05 |
|
Tax |
-22.99 |
-14.36 |
-28.29 |
-10.90 |
-10.80 |
-56.19 |
|
Net Profit |
44.64 |
27.89 |
19.66 |
22.80 |
22.46 |
77.86 |
|
Equity |
18.03 |
18.03 |
18.03 |
18.03 |
18.03 |
18.03 |
|
EPS |
12.38 |
7.73 |
5.45 |
6.32 |
6.23 |
21.59 |
|
CEPS |
18.38 |
13.62 |
5.45 |
12.39 |
12.33 |
45.86 |
|
OPM % |
19.04 |
16.56 |
13.75 |
15.19 |
16.54 |
16.54 |
|
NPM % |
8.07 |
5.34 |
3.82 |
4.51 |
4.52 |
3.97 |
2.0 Technical
For technical please look for Tonyâs post in the techno funda section
Positives
- Theme can be played for currency depreciation
- Last 6 months has been good
- Low p/e ratio (3.4)
- Low market cap/sales ratio
- Stable promoter holdings
- Cotton prices are stable for some time and happen to remain so in the coming year as well
- Stable debt/equity ratio for the last 2 year
- Interest payments has been coming down
- Company has tuned profitable in the last year
- Sales has been continuously increasing for the last 5 years
- Recent improvement in profit margins
Negatives
- This company has always commanded lower valuations because of their inherent nature
- This sector always had lower market cap / sales ratio
- High capital intensive business (interest cost are generally big drag on these kind of companies)
- Not much pricing power
- These kind of companies are not wealth creators
- Promoter has already cautioned not to expect the earnings growth which has been in the last 6 months
- Low ROCE and RONW ratio in the teens
- Not so great cash profit margin
- Earning has been volatile in the past and can expect to remain so in the future
Right now the improvements in the fundamentals are not priced in for the stock. This stock can be played for 6-12 month time frame.
Sources of information
Company website, bseindia and some brokerage sites
Disc: taken position
Fellow boarders request to take forward.