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23rd October’2010
BUY
Sector Textiles-Spinning- Strong Clientele Base: BSL is the key supplier to well known brands across the
Synthetic/Blended globe which includes Allen Solly, UCB, Wills, Arrow, Peter England, NEXT, GAP
Market cap Rs.190.27cr and Carreman. The key customers of BSL includes Aditya Birla, ITC and Arvind.
Face value 10.00
Book Value 88877 82.16 JV with Carreman, France: BSL has entered into a 50:50 JV with a French
EPS Rs.20.89 company, Carreman France. Carreman Fabrics India Ltd. was incorporated in
52 week H/L6666 142/59.10 2006 and has state-of-art weaving plant that has 60 brand new Picanol Rapier
Avg. Daily Vol (2wk) 0.32lacs Looms. It is being managed by the French technicians who do the job weaving
Dividend K8820% work for BSL.
Managing Director R.L Toshniwal
Listed At NSE/BSE Future Valuation:
Equity capital Rs.14.75cr
At the current price of Rs.135, the stock is trading at 3.73x and 2.62x of our
estimated FY11E & FY12E earnings. We thus recommend a ‘BUY’ with a
Price target of Rs 175.
Shareholding Pattern
Particulars (In crores) FY10 FY11E* FY12E*
Promoter Holding : 53.19%
FIIs : 0.00% Net Sales 622.25 777.81 917.82
DIIs : 0.03% %change in Sales - 25% 18%
Public & Others : 46.78%
Expenditure 532.95 668.91 780.15
PBIDT 107.08 131.21 159.98
FairWealth Equity Research Desk Profit After Tax 30.88 47.23 67.37
www.fairwealth.in/research.aspx %change in PAT - 52.95 42.64
Segments of BSL
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Fairwealth Research Desk
Banswara Syntex Limited
Robust growth in bottomline: The company robust bottom line numbers were
mainly on account of new product development and the strong relation that the
company shares with its valued customers. In FY10, the PAT grew massively by
222% thereby posting the number to Rs.30.88cr from Rs.9.59cr.
Strong Clientele base: The company enjoys valuable customer base across the
globe. The key customers of BSL include Aditya Birla, GAP, Marks & Spencer,
Arrow, Provogue, Westside, Blackberrys, Park Avenue, Banana Republic,
Pantaloon etc.
Backward Integration: The company has set up first unit of 15/18 MW Thermal
power plant in the year 2006 and has also planned for an additional 15/18 MW
thermal based power plant which is expected to commence operation at the end
of 2010. The power generated by this plant would primarily be used for internal
consumption and surplus for sale.
JV with Carreman, France: BSL has entered into a 50:50JV with a French
company, Carreman France. Carreman Fabrics India Ltd. was incorporated in
2006 ans has state of art weaving plant having 60 brand new Picanol Rapier
Looms. It is being managed by the French technicians and also does the job
weaving work for BSL.
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Fairwealth Research Desk
Banswara Syntex Limited
PEER ANALYSIS
Particulars (In crores) Banswara Textiles RSWM APM Indus Sangam India
Market Cap 195.66 399.22 42.42 196.9
Sales 651.32 1601.13 206.29 911.65
PBIDT 104.34 206.27 20.33 136.07
Net Profit 30.82 62.36 8.68 22.9
EPS 20.89 26.94 20.09 5.81
P/E 6.46 7.13 4.98 8.78
EV/PBIDT 6.06 7.11 5.01 6.49
P/BV 1.61 1.74 0.96 1.04
Equity 14.75 23.15 4.32 39.42
OPM % 16.02 12.88 9.86 14.93
Banswara Textiles is available at a relatively low P/E of 6.46. The Industry P/E stands at 11.23.. The OPM of BSL is 16.02 which
is highest among its peers. The EV/PBIDT and P/BV stands at 6.46 and 1.61 respectively.
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Fairwealth Research Desk
Banswara Syntex Limited
QUARTERLY ANALYSIS:
Particulars (In crores) Q1FY10 Q1FY09 Var % Q4FY09 Var %
Net Sales 178.9 149.9 19.35 179.44 -0.30
Other Operating Income 2.06 0.9 128.89 2.92 -29.45
Other Income 1.64 4.17 -60.67 0.9 82.22
Total Income 182.6 154.97 17.83 183.26 -0.36
Total Expenditure 152.73 128.76 18.62 154.54 -1.17
PBIDT 29.87 26.21 13.96 28.72 4.00
Interest 9.78 9.01 8.55 7.84 24.74
PBDT 20.09 17.2 16.80 20.88 -3.78
Depreciation 7.87 7.47 5.35 8.07 -2.48
Tax 3.59 3.31 8.46 3.35 7.16
Profit After Tax 8.63 6.42 34.42 9.46 -8.77
Extra-ordinary Items 0.39 2.33 -83.26 0.6 -35.00
Adjusted Profit After Extra-ordinary item 8.24 4.09 101.47 8.86 -7.00
EPS (Unit Curr.) 6.04 4.91 23.01 7.22 -16.34
OPM % 16.70 17.48 -4.51 16.01 4.32
NPM % 4.82 4.28 12.63 5.27 -8.50
Banswara Syntex Limited posted good set of numbers for its quarter ended June 2010.On Y-O-Y Basis, the top-line increased
19.35% to Rs 178.9cr in comparison to Rs.149.9cr in the corresponding quarter previous year. The operating profit of the
company witnessed a growth of 13.96% to Rs 29.87cr as against Rs.26.21cr. The bottom line of the company grew 34.42% to
Rs.8.63cr in comparison to Rs.6.42cr in the similar period previous year. The OPM and NPM stood at 16.70% and 4.82%
respectively. The EPS for the quarter ended June’10 is 6.04.
On Q-O-Q Basis, the top line decreased marginally by 0.3% to Rs.178.9cr. The bottom line declined by 8.77% to Rs.8.63cr in
comparison to Rs.9.46cr.
Stock Performance
160
140
During the 52 week period, BSL stock price
120
was highest in the month of Dec’09. Since
100
80
Apr’10 the stock has been moving in line
60 with the SMALLCAP Index.
40
20
0
Banswara BSESMALLCAP
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Fairwealth Research Desk
Banswara Syntex Limited
BSL Revenues
80
70 BSL revenues come majorly from
60 exports. In FY10, the total revenues
50 were Rs.622.25cr out of which 65.15%
In %
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Fairwealth Research Desk
Banswara Syntex Limited
BALANCE SHEET
Particulars (In crores) 2009-10 2008-09 2007-08 2006
2006-07 2005-06
Net worth 117.81 91.03 84.26 81.73 60.76
Loans-term 279 257.46 250.33 178.18 122.34
Loans-working capital 162.66 111.12 94.87 67.54 69.57
Deferred tax liability 27.23 21.93 20.53 19.56 18.41
TOTAL 586.7 481.54 449.99 347.01 271.08
Net block including WIP 362.55 330.9 319.15 244.52 170.38
Investments 6.67 6.63 6.63 6.53 2.78
Net working capital 217.48 144.01 124.21 95.96 97.7
Deferred revenue expenses 0 0 0 0 0.22
TOTAL 586.7 481.54 449.99 347.01 271.08
Industry Over-View
800 Total textile exports have increased to US$ 18.6 billion during April’09-
April’09
300 January’10, from US$ 17.7 billion during the corresponding period of
600 the previous year, registering an increase of 4.95 per cent in rupee
260 terms. Further, the share of textile exports in total exports has
219 238
400 increased to 12.36 per cent during April’09-January’10
April’09 (according to
505 the Ministry of Textiles).
200 311 345 390
As per the Index of Industrial Production (IIP) data released by the
0 Central Statistical Organisation
ation (CSO), cotton textiles have registered
2006 2007 2010 2015 a growth of 5.5 per cent during April-March
March 2009-10,
2009 while wool, silk
and man-made
made fibre textiles have registered a growth of 8.2 per cent
while textile products including wearing apparel have registered
regi a
Apparel Textiles growth of 8.5 per cent
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Fairwealth Research Desk
Banswara Syntex Limited
The Scheme for Integrated Textile Park (SITP) was approved in July
2005 to facilitate setting up of textiles parks with world class
infrastructure facilities. 40 textiles park projects have been sanctioned
under the SITP. According to the Minister of State for Textiles,
Panabaaka Lakshmi, under the SITP, a cumulative expenditure of US$
204.3 million has been incurred against allocation of US$ 220.7 million
in the last three years.
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Fairwealth Research Desk
Banswara Syntex Limited
Facts & Figures related to report taken from Capitaline database, Company’s website and Company’s reports.
Stock Ratings
BUY The stock's total return is expected to exceed 20% over the next 12 months
ACCUMULATE The stock's total return is expected to be within 10-15% over the next 12 months
REDUCE The stock's total return is expected to be within 0-10% over the next 12 months
SELL The stock's total return is expected to give negative returns over the next 12 months
NOT RATED The Analyst has no recommendation on the stock under review
Disclaimer:
This publication has been solely prepared for the information purpose and does not constitute a solicitation to any person to buy or sell a
security. While the information contained therein has been obtained from sources believed reliable investors are advised to satisfy themselves
before making any investments. Fairwealth Securities Ltd does not bear any responsibility for authentication of the information contained in the
reports and consequently is not liable for any decision taken based on the same. Further Fairwealth Research report only provides information
updates and analysis. All opinions for buying and selling are available to investors when they are registered clients of Fairwealth Investment
advisory services. As a matter of practice, Fairwealth refrains from publishing any individual names with its reports. As per SEBI requirements it
is stated that, Fairwealth securities Ltd, and/or individuals thereof may have positions in securities referred herein and may make purchases or
sale while this report is in circulation.
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Fairwealth Research Desk