CHEVIOT COMPANY

INTRODUCTION
Cheviot Company Limited is the flagship company of Group Cheviot. It owns
Cheviot Jute Mills in West Bengal. The Company manufactures jute products and
jute fabrics with flexibility to cater to both domestic and international market.
The Company is renowned for manufacturing superior quality technical jute
fabrics and fully customized jute shopping bags for export market at the Export
Oriented Unit situated at Falta Special Economic Zone in the state of West Bengal,
India.
The Company is proud recipient of quality assurance system IS/ISO 9001:2008;
Licensees of Environmental Management Systems Certification IS 14001:2004 and
Licensees of Occupational Health and Safety Management Systems Certification IS
18001:2007.
Cheviot Company Limited is recognized as a TRADING HOUSE by the Government
of India

Manufacturing units
It has got two manufacturing units which are equipped with the state of the art
technology near Kolkata, West Bengal, India:I) BUDGE-BUDGE:
Composite Jute Mill producing high quality jute yarns & traditional jute products
such as-Hessian cloth & Bags in different sizes & constructions, Sacking bags like
A-Twill, B- Twill & DWF Bags-both Normal & Food Grade Quality.
II) FALTA :
Specialty Jute Weaving unit manufacturing high quality technical / Decorative
Fabrics on SULZER LOOMS and Jute Shopping Bags.
Company's focus is always on developing into new product lines which are eco
friendly & bio degradable. In pursuance to this policy, Company has embarked in
to manufacturing Jute Shopping Bag Business which is being manufactured under
strict supervision of highly trained people with latest technology.

Over the years, Company has been manufacturing the fabric required for Jute
Shopping Bags on Sulzer Looms, the quality of which has been appreciated by one
and all. As a forward integration, Company started producing Jute Shopping Bags
from cloth manufactured in-house, which puts Cheviot in a advantageous position
to guarantee quality & timely shipment of the bags and that too at a very
competitive price

WHY JUTE SECTOR

1)Advantage over Bangladesh :India and Bangladesh together accounts for the
95% of worlds jute production. The cost of producing quality yarn is 40 per cent
higher in Bangladesh than in India because of the technological disadvantages.
India has set up composite jute mills with modern machinery and technologies for
production of fabrics, dyeing or lamination under one roof. Bangladesh has nearly
250 jute mills, but none of them has the dyeing and lamination facilities, which
are essential to producing diversified products, according to exporters.
2) Environmental friendly bio-degradable characterisics of jute ibre will always
have an edge over other packing materials;
Increase in use of jute shopping bags, loor coverings, jute geo-textile products
provides opportunity to boost demand of jute goods.
3)Plastic bags are getting banned in India due to their threat to environment
which paves way for jute products.
4) The anti dumping duty on imports would open up the jute sector in India. The
duty would increase the prices of imports thus making the domestic goods
cheaper. Since Bangladesh has been a stiff competitor of India, this could be a
game changing move.

5)Uses of Jute
Textiles
The major manufactured products from jute fibre are: Yarn and twine, sacking,
hessian, carpet backing cloth and as well as for other textile blends. It has high
tensile strength, low extensibility, and ensures better breathability of fabrics. The
fibres are woven into curtains, chair coverings, carpets and area rugs and are also
often blended with other fibres, both synthetic and natural. The finest threads
can be separated out and made into imitation silk. Jute can also be blended with
wool. By treating jute with caustic soda, crimp, softness, pliability, and
appearance is improved, aiding in its ability to be spun with wool.
Packaging
Jute is extensively used for sacking for agriculture goods as well as being used
increasingly in rigid packaging and reinforced plastic and is replacing wood in pulp
and paper.
By-products
Diversified by-products from jute include its use in cosmetics, medicine, paints,
and other products. Jute sticks are used as fuelling and fencing materials in the
rural areas of jute producing countries. These are good substitute for forest wood
and bamboo for production of particle boards, pulp and paper.

Companies Financials
1) Promoter stake is 75%(the highest possible)
2)Company is available at trailing pe of just below 10 and a forward pe of just 8
3)Company is debt free.
4)The operating margins of the company have surged yoy to 22%.
5)The company has recorded an Eps of rs 51 in first 2 quarters of FY15-16 against EPS
of Rs 25 in FY14-15, almost a 100% yoy growth.
6) The company has never missed dividend in last 15 years except in year 2002. Also it
has declared dividend of rs 17 this year giving a dividend yield of 1.7%.

7)The companies topline in first 2 quarters have grown by 25% yoy from 120 odd crores
to 150 crores.
8) The company has enough capacity to take advantage of rise in production as it has
been working on less then 100% capacity and doesnt need to go for a capex right now

Technicals
The company has been well consolidating at 1000 around levels for some time with an
upward bias and has eliminated the chances of a false breakout. The stock is getting to
oversold regions and its perfect time to grab it before it gives a major breakout above
1000 levels

Though the company has had a good rally in the past its still looks pretty good and
could be a multibagger in long term. Please dont go by the price but do have a look at
mcap and pe which is it trading at. Considering the future potential and outlook of the
Jute sector which is looking good after long time, just have this share in your Core
portfolio.

Note: The above is not a research report but assimilation of information

available on public domain and it should not be treated as a research report.