Shiva Mills - Smallcap Value Buying

Shiva Mills Limited (formerly STYL Textile Ventures Limited) was incorporated in the year 2015 as a wholly owned subsidiary of Shiva Texyarn Limited to takeover the assets and liabilities of Spinning Unit I and certain windmills under the Scheme of Arrangement (Demerger).

SML belongs to Coimbatore-based Bannari Amman Group (BAG) of companies which has presence in textiles, automobile dealership, sugar, distilleries, power and education. Originally promoted by Mr S V Balasubramaniam and his brothers, presently each brothers and next generation members are actively engaged in managing their respective businesses. At present, Mr S V Alagappan, (brother of Mr S V Balasubramaniam) controls the business of SML and is the Chairman and Managing Director of SML and has experience in the textile industry for more than four decades.

The spinning unit was started in the year 1989 with factory at Dindigul, Tamilnadu. The unit has capacity of 39072 spindles with a production capacity of 20 tonnes of cotton yarn per day. The unit specializes in production of 100% cotton yarn for knitting mostly counts 20/1 to 40/1. The Company exports around 20% - 30% of cotton produced to far east countries. The unit has been modernized at periodical intervals by availing Term loans under Technology Upgradation Fund (TUF) scheme. The unit is equipped with some of sophisticated machinery like LMW V4 Cards, Rieter SB D22 Drawframe, Rieter E35 Omega Lap, Rieter E80 Combers, Saurer AC6 Autoconer, Sussen Compact system for Ring frames to name a few. The unit has also installed sophisticated testing equipments to test the quality parameters of cotton as well as yarn so as to maintain highest quality standards. The Unit has implemented ISO 9001 2000 Standards certified by Det Norske Veritas, Netherlands for quality standards. Registered under MSME as a Medium Enterprise, SML manufactures mainly cotton hosiery yarn with an average count of 25s-40s.

Wind power is a good source of electricity because of its renewable and constant replenishing nature. While retaining yarn as its mainstay, Shiva Mills Limited has ventured into captive power, becoming cost efficient by combating uncertainties in the availability of energy. The company has installed 22 wind mills, having cumulative capacity of 10.65 MW in the best windy sites of Tamilnadu. This produces around 20 MU units of green energy, being utilized through captive arrangement.

Shiva mills mcap is around 75 cr and it’s operating profit is around 25 cr. It has paid off all debts in last financial year. It’s now debt free and dividend paying company

If we take it’s 10.65 MW wind power business thats value come around 70 cr as per industry valuation and it’s market cap is only 75 cr. It has fully integrated textile unit also.

After seeing its fundamental, it’s grossly undervalued compare to peer stocks. It’s pure investment call. Pls do study and take call in this Smallcap Gem

Disc. Invested


1.Exposure to volatility in raw material prices:
Cotton, the key raw material has exhibited high volatility in prices in the past and in turn impacts the profitability of the company. The prices of cotton and yarn are governed by various factors such as area under cultivation, monsoon, export quota by the government, international demand-supply situation etc
2. Impact of Covid-19
Covid risk which will impact most of listed/unlisted companies topline and bottomline, decrease in demand, as well owing to the covid locdown factor.


At the outset , one of the main concerns i see is lack of revenue growth in past years. Have to analyse it further.

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Thanks for putting up this company here, i have gone through their website and latest annual return and financials from screener. Below are my initial observations:
(1) Growth is not evident from the figures across the years and also I do not see any aggressive future plans to drive growth.
(2) Not any growing trend in the margins.
(3) Becoming debt free though is positive, this by itself shouldn’t be a basis to consider the company esp in the absence of growth prospects.
(4) Majority of board members are above 64 years and CFO is aged 71 years.
(5) Fixed Assets are on the declining trend and the same is evident from “investing cashflows”. Looks like they had more focus on clearing debt than investing in Fixed Assets.
Looks like market has factored the above and hence, low P/E ratio than peers. Await comments.


Latest AR states capex plans of upto Rs.15cr - all thru internal accruals. FY 22 EPS at Rs.21. Q1’23 EPS at Rs.4. Overall steady numbers.