Himatsingka Seide Ltd Multibagger

Company View

The Himatsingka Group is a vertically included Home Textile major with a global footprint. It focuses on the manufacturing; Selling and Supply of Home Textile products the company products are offered across England, France, Germany, Italy, South America, Australia and USA. Himatsingka Seide Ltd operates through their spinning and weaves divisions. Himatsingka Filati, the spinning division, was well-known in technical partnership with Filati Buratti of Italy, which produce a wide range of regular and fancy 100 percent silk and silk blended yarns and the weaving division offers yarn dyed decorative, bridal and fashion fabrics. The entire process of winding, doubling, twisting, dyeing, weaving and finishing is included under one crown.

Company Financial View

Himatsingka Seide Ltd was incorporated in the year 1985 and was uphold by Ajoy Kumar Himatsingka and Dinesh Himatsingka. In March 1993, the company comes out with a rights issue at a finest to part-finance their development and to expand funds for meeting long-term working capital necessities. For the duration of the year 1997-1998, the company profitably implements 600,000 square meters of weaving capability at a cost of Rs 20.20 crore. Also, Himatsingka Seide Ltd set up two units of 2.2 MW each imprisoned power plant at a cost of Rs 6.61 crore. For the period of the year 2000-2001, Himatsingka Seide Ltd new 12 rapier looms, which additional augmenting capacity of 400000 meters. During the year 2002-2003, Himatsingka Seide Ltd acquired ABC Trading Pct Ltd for a total deliberation of Rs 5.75 crore.

The Himatsingka Group has registered robust results for the quarter ending September 2013. The consolidated revenues from operations grew by 16.3 percent to Rs.549.79 crores vs. Rs.477.70 cr. in the corresponding quarter last year. Operating profit climbed sharply by 31 percent at about Rs.54.77 crores as against Rs.41.80 crores in the previous year quarter; driven by cost optimization measures. The net profit skyrocketed at Rs.18.05 crore for the quarter as compared to Rs.9.36 crore (pre-exceptional). EPS for the quarter stood at Rs 1.83.

Manufacturing revenues represented by the Drapery/Upholstery and Bedding Divisions grew by 35.1 percent to Rs.251.22 cr. vs. Rs.185.94 cr in the like quarter last year; helped by higher volumes in Bed Linen and improved constant currency realization per meter.

Distribution revenues in North America the portfolio of 6 brands including Calvin Klein Home and Barbara Berry grew by 13.7 percent to Rs.452.69 cr. vs. Rs.398.23 cr in the corresponding quarter previous year. Revenues from Europe represented by the “Bellora” brand showed a growth of 38.2 percent to Rs 30.26 vs. Rs 21.89 cr in the corresponding period last year. Revenues from India/Middle East/ South East Asia represented through the Atmosphere brand grew by 10 percent at aR.14.05 cr as against Rs 12.78 cr in Q2FY13.

Company Valuation

With increasing geographical presence, strong brands, efficient cost optimization measure and improved realisation; Himatsingka Seide Ltd. revenue visibility looks clear. We believe the company is trading at an attractive valuation at 8.57x and 5.49x of FY14EPS of Rs 7.09 and FY15EPS of Rs.11.07. We are recommended te Stock Near Rs. 62-58  for target price of Rs 80 In a time period 6-9 months

Bse Id: 514043


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