Suditi industries

Scrip: Suditi Industries

BSE Code: 521113

Cmp: 25.50 Face Value: 10

I have noticed a company named Suditi Industries in Textile Business. What I impressed most is that their unique way of business Expansion.

Last year they got Apparel Right in India of FIFA world cup 2014, after the success of that event they have bagged the apparel rights in India of many prestigious Premier league football Club that includes Real Madrid, Arsenal & Manchester City as well they are in talk with couple of more clubs.

By doing so they are aiming to find a new market segments as well as create a brand value of their Retail brand named “Riot”. They have around 15 retail outlets in India and tied up with many Retail Chains and online stores. If you read their last annual report we can understand that They are expecting 20 to 30% revenue growth in current fiscal year.

Apart from this I have noticed 75% of the company holding by promoters in that around 70% holding by Single promoter.

And for the dividend side last year they have given 0.50 Rs/Share dividend for 25% public share holders. Promoters haven’t taken any. That is showing management friendly attitude towards the minority retail share holders.

Iam Seeing a great future for this Company. Welcome Experts opinion on this Scrip.

Suditi bags licensing and merchandising rights for Football World Cup merchandise in India

source ET:-

Suditi bags rights for Real Madrid fan wear in India

I had picked this up too but lost interest when I found out that even during the football world cup season and its aftermath, all of this merchandising has hardly helped them move their sales or profitability. At 42x PE, I am not sure what’s the play here unless someone is so sure that sales will go disproportionately from here

Question is why would they ? if they did’nt grow during the best time, why would they grow from here on. On sales, cash flows, PE, this looks quite overvalued.

I did some scuttlebutt on their ecommerce website - the website takes quite a long time to open and looks quite uninspiring. Plus, I have not seen a single review of riot website or its products on the web. Does not seem to have any social media presence either ( a bare minimum these days is a facebook page/twitter presence).

IMHO, data points are not adding up -

Dear Varadharajan Ragunathan,

Thanks for you feed Back. Did you notice that the owner of the company Mr. Pawan Agarwal Aggressively increasing his holdings? He has bought almost completely from other promoters and now it is almost like a single Individual promoter Company. I don’t know whether it is postive sign or not. Any Comment on this?

To me it does not mean anything - could be consolidation because they had a split or because of tax planning - if he bought from the open market, it means something. Heaven knows whether he actually paid money or not given that capital gains is zero for long term listed.

Open market purchases mean a lot to me - but what happens within four doors is anyone’s guess.

Suditi Launched Brand “YouWeCan” backed by Celebrity Cricketer Yuvraj Singh - Is it a game changer of the Company?

Good Result Post by Suditi Ind

Adding my research here:

Suditi Industries is in the business of processing and manufacturing of knitted hosiery fabrics and readymade garments.

They have two business categories- retail and fabrics/garments.

Retail business (B2C):

  1. Own brands- They have two main brands of their own. Riot offers fashion wear like denim, bottoms, jackets, shirts for men or skirts, dresses, cardigans, or tunics for women, along with accessories like belts, bags, and flip flops. The price points for men and women start from INR 599 onwards for the Tops and INR 1,999 onwards for the Bottoms. Indianink brand offers products such as Kurtas, Tunics, Skirts, Salwar Kameez, Knitted Churidar, Patiyala, Dupatta, Pants, etc. The collection ranges from INR 499 – Rs 1,899 and salwar kameez sets range from INR 2,699 – INR 3,999.
  2. Licensed brands- They have the license for designing and manufacturing licensed clothing line that includes categories like t-shirt, sweatshirts, polo’s, jackets, track pants, boxers, etc. of the brands FC Barcelona, Manchester City FC, Paris Saint Germain and NBA. The said agreements with these clubs are valid for a period of about 3 years from the time of initiation, renewable thereafter at the will of the clubs.

  1. Partnership brands- They have partnerships for clothing brands YWC (YouWeCan) Fashion with cricketer Yuvraj Singh and brand NUSH with celebrity actress Anushka Sharma. For NUSH brand it is a 50:50 JV.

The company has Pan India distribution channels with 18-20 large distributors across India. The company also has a presence across 150 multi-brand outlets across 15 States out of which 45 are in Mumbai. Its products are sold across a wide range of outlets including Shoppers Stop, Pantaloons, Lifestyle, Walmart, Central, etc., coupled with major online platforms like Myntra, Amazon, Flipkart, Jabong, Snapdeal.

Fabrics/garments (B2B):

In fabrics, the company has facilities for knitting, dyeing, printing and finishing of yarns with installed capacity of 4,050 MTPA of knitted hosiery fabrics.

In garments, the Company manufactures casual wear, sportswear and activewear for men, women and kids as contract manufacturing for other companies like Future Group, Mandhana, Siyaram Silk Mill Ltd, Raymond, Burnt Umber, Pantaloons, Lee Cooper, Madura Garments (Brand - Louis Philippe, Van Heusen, Allen Solly), Arvind Lee, Shoppers Stop, Spykar etc.

Some clients:

In garments, they have production capacity of 2 lakh pieces per month. To this, they are further adding 1.5 lakh pieces per month capacity via capex.

This has been commenced as per the timelines in Q3 FY22

Capacity utilisation in Q2 FY22 was around 75%

They are planning to add more licensed brands for sports apparel.

Exports is insignificant as of now but they intend on increasing this

They have done debt reduction

In Q3 FY22, there was a decrease in interest cost, suggesting that perhaps debt has been reduced

Promoter Mr Pawan Agarwal has increased his stake in Dec quarter:

Disc- have a tracking position