Shri Lakshmi Cotsyn Ltd— BUY—65—INR
Sector — Textiles
Regd.Off.— 19/X-1, G T Road, Krishanpuram, Kanpur (U.P.)- 208007
Listed — NSE, BSE (BSE CODE: 526049).
Company overview—
Incorporated in 1988, the Shri Lakshmi Cotsyn Ltd (SLCL), with two manufacturing facilities in Fathephur (Uttar Pradesh) and Sonepat (Haryana), has ambitious plans for its future expansion & developments. Shri lakshmi cotsyn is one of the few textiles mills in India having broad products range for the domestic as well as international business. Company is engaged to supply defence requirements with high quality standards. Company engaged for processing synthetic as well as cotton fabrics and other textile related items. Later Company planned a diversification to manufacture Polyfibre Filled Beds Spreads and Quilts with an installed capacity of 8 Lakh meters par annum.
Products & services—
The Company produces Bedspreads, Puff Cushions, Pillows, Sleeping Bags and other Home Furnishing Products in the computerized Quilting Machine based on Swiss technology. The machine has capacity up to 130" wide clothes. In the year 1998, the Company undertook a project envisaging Expansion of capacity for production of Polyfibre Filled Quilted Cloth by 4 Lakh meters. Par annum and Setting up of facilities for manufacture of Microdot Fusing Cloth (MDFC) of 100 Lakh meters Par annum Embroidery Cloth of 8 Lakh Meters per annum. In Suiting & Shirting Segment Company is having installed capacity of 18 MMPA and its brand is well established in domestic market. It also has few products for defense as well as industrial sector. Company has its presence into Cotton Fusible Interlining and has an installed capacity of over 10 MMPA. It's a one of the leading player in this segment with over 15% market share. In the embroidery, lace & quilted fabric it has an installed capacity of around 1.2 MMPA with an in house processing capability. Company has its presence into textile specialty chemicals in its chemical division for its own consumption. The product profile includes Poly Vinyl Acetate, Fabric Softener, KVS, Stain Remover, Polyethylene Emulsion, and Micro-Amino Silicon emulsion, AMH.
Recent development—
Company plans to further increase its on-going expansions plans by Rs 3,500 million aggregating to Rs 8,090 million. Under its phase III expansion plan, the company plans to add 12,000 MT capacities in Terry Towel and 12 MW co- generation agri-based power plant for 100% captive consumption. With this expansion plan, SLCL will become the second largest producer of terry towels in India with the total capacity of 15,000 MT. The increased capital expenditure would be financed through term loans under TUFS (Textile Upgradation Fund Scheme), Equity/FCCB/Warrants and internal accruals. The company has already completed its Rs 2,640 million project for terry towel, bed sheets, denim and bottom weight, Rs 1,250 million project for nylon and home furnishing and Rs700 million project for garments in the past two years.
Company plans for the revision of shareholding pattern of Armet Armored Vehicles (India) has been approved by the board. The board has decided to increase the shareholding percentage of Shri Lakshmi Cotsyn from 49% to 75% and consequently the shareholding of the Joint Venture Partner, Armet Armoured Vehicles U.K. to be decreased to 25% from 51%. Shri Lakshmi is increasing its focus on high margin technical textile business. The company has recently entered into joint venture with the Armet Armored Vehicles U. K. for manufacturing of High-End 360 degree Armoured Vehicles first of its Kind in India with bullet- mine and bomb -proof accessories. It expects to roll out about hundred such highest security protection level armored vehicles by 2009. The JV will also manufacture assembly of armour plates, panels, helmets and other safety and security related equipments in India. SLCL is an approved vendor with host of Indian defence establishments, manufacturing safety textiles such as bio- chemical, high altitude fabric, bullet-proof jackets and bullet-proof helmets, camaflouge fabrics, uniform fabric, IR fabric and carbon fabric.
Financials—
Quarterly results for 01-APR-2009 to 30-JUN-2009 (Fourth Quarter)
Description | Amount(Rs. in lakhs) |
Net Sales/Income from Operations | 33062.00 |
Increase/Decrease in Stock in trade and work in progress | 1683.00 |
Consumption of Raw Materials | 24533.00 |
Employees Cost | 533.00 |
Depreciation | 705.00 |
Other Expenditure | 2169.00 |
Total Expenditure | 29623.00 |
Profit from Operations before Other Income, Interest & Exceptional Items | 3439.00 |
Other Income | 311.00 |
Profit before Interest & Exceptional Items | 3750.00 |
Interest | 1561.00 |
Profit after Interest but before Exceptional Items | 2189.00 |
Profit(+)/Loss(-) from Ordinary Activities before tax | 2189.00 |
Tax Expense | 262.00 |
Net Profit(+)/Loss(-) from Ordinary Activities after tax | 1927.00 |
Net Profit (+) / Loss (-) for the period | 1927.00 |
Face Value (in Rs.) | 10.00 |
Paid-up Equity Share Capital | 1558.00 |
Basic EPS before Extraordinary items (in Rs.) | 12.37 |
Diluted EPS before Extraordinary items (in Rs.) | 12.37 |
Basic EPS after Extraordinary items (in Rs.) | 12.37 |
Diluted EPS after Extraordinary items (in Rs.) | 12.37 |
Valuation—
At current market price, stock is trading at 2.67 P/E multiple of its FY2010 estimated earnings. We recommend investors to buy "Shri Lakshmi cotsyn Limited" with medium to long term investment horizon.
Source: Internet (Valuenotes By Abhishek Jain)
