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SHARETIPSINFO >>Research Reports >> GINNI FILAMENTS LTD (28-05-2009)
LISTING |
|
|
Rs 7.35 |
|
Rs 13/ Rs 3 |
|
Rs 10 |
P/BV |
0.31 |
AVERAGE VOLUME |
10141 |
COMPANY OVERVIEW:
Ginni Filament was established in the year 1982. The main objective of the company is to manufacture cotton yarn. At present company promoters are Dr.Rajaram Jaipuria and Shishir Jaipuria. Jaipuria group has diverse business interest like textile, sugar, IT etc.
Location:
Company is located in Tehsil Chatta, Mathura, UP.
Capacity:
Ginni Filaments has grown 60336 spindles with a installed capacity of 1000 tons per month.
Company has moved into knitted fabrics and installed 26 knitting machines. Ginni has started working with some leading European brands and other global brands like Benetton, C&A, Allen Solly, Van Heusen, J C Penny etc.
In order to get fully vertically integrated and be present from fibre to fashion, Ginni Filaments has entered garment business with its first unit in Noida with a capacity of 250000 pcs per months. The capacity is expected to increase to 1 million in phases.
The company also has spun lace non woven fabric with an installed capacity of 12000 MT/pa in Panoli, Gujarat.
LATEST DEVELOPMENT:
Ginni Filament has announced the setting up of medical textile facility in Haridwar, Uttaranchal. For this company has entered into deals with some of the leading healthcare companies such as Cipla, Fortis, and Max.
The business is expected to add another Rs200 crore to the top line of the company.
INVESTMENT RATIONAL:
Company is down in red. We expect a turnaround in the company this fiscal.
All the bad news is discounted in the price. There cannot be anything worst than this. So any sprinkle of good news will see the stock hitting upper circuit for days.
The major reason for the company going into red is higher debt and increasing in the interest rate. We may see company recasting debt. The decline interest rate is also positive news for the company stock.
Textile companies are going to be the major beneficiary in the coming budget. We expect huge incentive and duty drawback for the textile company are in offing.
Major expansion capacity and foray into new segment will bring good profit to the company in this fiscal.
SHAREHOLDING PATTERN:
|
|
NO. OF SHARES |
% OF TOTAL |
PROMOTER |
32099646 |
|
54.17% |
|
INSTITUTION |
3289488 |
|
5.55% |
|
GENERAL PUBLIC |
23873491 |
|
40.28% |
|
GRAND TOTAL |
59262625 |
|
100% |
|
FINANCIAL:
|
|
31/03/05 |
31/03/06 |
31/03/07 |
31/03/08 |
TOTAL INCOME |
186.88 |
193.04 |
228.43 |
311.23 |
EXPENDITURE |
-163.21 |
-164.09 |
-195.69 |
-287.9 |
OPERATING PROFIT |
23.67 |
28.95 |
32.74 |
23.33 |
DEPRECIATION |
-10.85 |
-12.09 |
-14.49 |
-18.87 |
PBIT |
|
12.82 |
16.86 |
18.25 |
4.46 |
INTEREST |
|
-8.51 |
-9.85 |
-12.66 |
-19.67 |
PBT |
|
4.31 |
7.01 |
5.59 |
-15.21 |
TAX |
|
-2.34 |
-1.44 |
-2.92 |
0 |
PAT |
|
1.97 |
5.57 |
2.67 |
-15.21 |
CHANGE IN TOTAL INCOME: CAGR IN TOTAL INCOME IS 18.53%.
CHANGE IN OPERATING INCOME: OPERATING INCOME AFTER SPURTING IN FY2007 came down to the level of FY2005 LEVEL.
CHANGE IN NET INCOME: CAGR IN NET INCOME IS -297%.
KEY HIGHLIGHTS:
Total Income has shown a consistent increase at CAGR of 18.53%.
Operating Profit has more or less remained flat due to the rise in the input cost.
Net income declined and company went into red in FY2008 due to higher debt and increasing interest rate.
RATIOS:
|
|
31/03/05 |
31/03/06 |
31/03/07 |
31/03/08 |
EPS |
|
0.33277 |
0.940878 |
0.451014 |
-2.56926 |
OPM |
|
12.66588 |
14.99689 |
14.33262 |
7.496064 |
NPM |
|
1.054152 |
2.885412 |
1.168848 |
-4.88706 |
INTERST COVER |
1.506463 |
1.711675 |
1.441548 |
0.226741 |
COMPARISION OF Q3 FY2009 WITH Q3 FY2008:
|
|
31/12/07 |
% CHANGE |
31/12/08 |
TOTAL INCOME |
78.08 |
27.80% |
|
99.77 |
EXPENDITURE |
-71.3 |
|
|
-95.47 |
OPERATING INCOME |
6.78 |
-36.60% |
|
4.3 |
DEPRECIATION |
-4.6 |
|
|
-6.45 |
PBIT |
|
2.18 |
|
|
-2.15 |
INTEREST |
|
-4.4 |
|
|
-9.29 |
PBT |
|
-2.22 |
|
|
-11.44 |
TAX |
|
1.54 |
|
|
8.56 |
EXTRA ORD ITEM |
0 |
|
|
-14.15 |
PAT |
|
-0.68 |
-2400% |
|
-17.03 |
KEY HIGHLIGHTS:
Total Income surged in Q3FY2009 by 27.8%as compared to Q3FY2008.
Operating Income declined by 36.3% due to higher input cost.
Net Income saw a huge plunge of 2400%. The main reason is the higher interest outgo.
VALUATION AND OUTLOOK:
Worst is over for the company. We expect company to earn profit in FY2010. We the expect FY2010E EPS to be around Rs1.5 per share. So the company stock is trading at 4.6X to FY2010E earning. We value the company at 15X. So the fair value comes at Rs22.5 per share and in short time stock can touch Rs13.50.
We have valued the company at 15X because of improving market scenario globally, textile companies’ better outlook and increase in domestic demand.
CONCLUSION:
The stock is trading at its low. So down side risk remains low at this level. Anything we expect at this point is upside.
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