SVP Global: Set to post Stellar Growth

SVP Global Ventures Ltd. (“SVP”) is a diversified yarn manufacturing company, incorporated in 1982, and is listed on the Bombay Stock Exchange. SVP is a professionally managed company, led by a dynamic promoter Mr. Chirag Pittie, who has BSBA degree in Finance and Management from Boston University, USA.The Company has 3 units at Coimbatore, Palani, Madurai in Tamil Nadu for manufacturing Polyester & Cotton Blended Yarn with the Spindle Capacity of 98,000.

Growth Trigger: Recently the company has setup textile manufacturing facilities in the state of Rajasthan, at the RIICO Industrial Area in Dhanodi, District of Jhalawar. These new units will produce high quality compact yarn which are Low on hairiness, higher strength and elongation, less fiber fly, significant advantages.

Phase 1 Expansion: The Company has recently commissioned the new manufacturing capacity of 100,000 spindles. The project cost for the same was ~450cr which was funded through long term loan of 275cr and rest was funded through equity. The project will get 11% interest subsidy (6% State+3% Special +2% TUF) from the government as a result of which interest cost is negligible for the project (~1-2%)
Phase 2 Expansion: The company is about to commission the new manufacturing capacity of 2400 rotors.The project cost for the same is ~90cr which was funded through long term loan of 55cr and rest was funded through equity. The project will get 9% interest subsidy (6% State+3% Special) from the government
Phase 3 Expansion: This phase of the expansion will further increase the spindle capacity by 50,000 and is expected to be completed by the end of 1QFY18. The project cost for the same is ~225cr which was funded through long term loan of 160cr and rest was funded through equity. The project will get 9% interest subsidy (6% State+3% Special) from the government.

Financial Projections:
The company is optimistic about the demand for the product and confident of selling increased capacity in the market. They have already registered 90% utilisation from the phase 1 of the expansion, which can be seen in the Q3FY17 results of the company. The company expect new projects to add ~800cr annual revenue with the EBITDA margins of 18-20%. Further, as company would be getting interest subsidy from the government, project is expected to boost the profitability of the company. Given below are the rough financial projections for the company:

Note: Amount in the above table is in Cr.

Valuation: The stock is trading at ~4x FY19E Earnings and ~4.5x FY19E EV/EBITDA.
Key Risk: High Leverage, delay in completion of expansion, low capacity utilization etc
Views are invited for the discussion.
Disclosure: Invested since lower levels


are below revenues from existing facility sustainable? v high fluctuation every quarter on these revenue
–> 300 cr contract mfg (out of 400 cr - 100 cr is own mfg)
–> 100 cr trading

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Contract manufacturing revenue can vary on a quarterly basis. However, on a yearly basis they aim to maintain the same.

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Every Other company is doing expanision, will all of this sustain:
Sutlej Textiles
Nitin Spinners
Industry Overall Article 2015
Deepak Spinners
Himatsingka Seide
Star Cotspin
Nahar Spinning Mills

Is all of this sustainable… !!! my 2 cents

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Some concern areas:

Initially they were acquiring smaller companies and that was in private entity. Post that to expand they acquired the private entity into public entity at book value of Rs 103crs. Goodwill on consolidation is Rs 323crs which was introduced in FY17.

Managment on the last con call stated that new business at Jhalwar is selling at Rs 230-240. However it sold 5000 tonnes last quarter and revenue for that unit was stated at Rs 90crs. So why the mismatch?

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I could only find last two years profit/loss on I have marked few question the image

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There are some apprehensions for the company… I am from Jhalawar , the place where its plant are located… I heard from my clients who directly deal with the commpany that they are using services of hotels and other service providers and not making payments to them.

Discl : Invested recently

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SVP Global Ventures standalone net profit rises 66.67% in the March 2017 quarter

Any thoughts on why SVP global’s Receivables to sales ratio for FY16 and FY17 at 29% and 33% Vs comparable peer Ambika Cotton for which the metric is around 6-7%.

That’s because svp global has not so good bargaining power with their customers and ambika cotton does have that. Also svp has different product mix as their southern units are of commodity nature and Rajasthan unit is of special yarn. So comparison between Rajasthan unit can be done but not for the mixed no’s.

Exited fully due to various negative news.

I will be obliged if you can throw some light on negative news you have received.


Could you please share the negative news you have heard. Would be helpful for members here.

Guys Check this… really good…if happens

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The company is allegedly defrauding PSU Banks and siphoning off money.


Seems genuine to me.

That means this news was Correct…

Officially Announced now:

Is anyone still tracking this story. Whats the status of their Oman plant?