Indian
Acrylics Ltd
cmp:19
Code:514165
The company belongs to Steel Strips Group and the promoters have incresed stake recently by 5% by buying from the open market..
They have also set up a Export House in Spain to increse their exports...
cmp:19
Code:514165
The company belongs to Steel Strips Group and the promoters have incresed stake recently by 5% by buying from the open market..
They have also set up a Export House in Spain to increse their exports...
Acrylic Fibre Industry has taken a big U-Turn in current year. Acrylic Fibre is mainly used for clothes and Acrylic Yarn produced from Acrylic Fibre is warm to manufacture Sweaters, Scarves, T-Shirts, Kids Clothes, Mufflers, Jogging Suits, Socks etc. Its other use for Household Segments for manufacturing Carpets, Blankets, Rugs etc.
The Company:
Indian Acrylics Ltd is the largest and
most efficient acrylic fiber manufacturer of India and an important player in the
global industry with exports to Asia, Europe and the Middle East.
They are producing dry spun acrylic
fiber since 1993. Production facility is located at Harkishanpura, District
Sangrur, Punjab, India and has a capacity of 42000 mt p.a. and 5400 mt p.a.
IAL earns almost its 70% revenue from
exports.
Understanding the Product Category:
Acrylic fiber market globally is
Growing. Acrylic fiber market is a subsidiary to clothes | fashion industry and
it shows similar trends. Indian market of acrylic fiber too is stagnant for
last few years but with higher GDP growth this year compared to last few years
hopes are high.
As an industry Acrylic fiber is heavily
dependent on crude prices. This is more true for India as Indian company
generally imports all raw materiel from crude and its derivative suppliers
across the world.
All Indian companies hence experience
very fluctuating operating margin depending on the crude prices.
Its been observed that the price
difference has an delayed effect of around 3-9 months on the Acrylic fiber
companies operating profit margins. Clearly due to raw materiel storage and
price commitments made earlier than a crude price fluctuation.
Fundamentals:
Undervalued ? yes. A 550 cr turnover,
leader in its segment company is priced only Rs. 19. EPS for full financial
year 2015-2016 Rs.1.52 per Share .....Currently trading at 12x
In last two qtrs of 2016-2017 FY company
posted EPS 1.32 Per Share. Company is expected to Post EPS of Rs.2.25-2.50 for
full financial Year 2016-2017
(in Cr.)
|
Sep-16
|
Jun-16
|
FY15-16
|
Revenue
|
130.74
|
122.23
|
544.14
|
Net Profit
|
6.80
|
9.75
|
20.62
|
EPS
|
0.50
|
0.72
|
1.52
|
I think Vardhaman Acrylic holds a better scope for better appreciation
ReplyDeleteYou have no mentioned that the company belongs to Steel Strips Group and the promoters have incresed stake recently by 5% by buying from the open market..
ReplyDeleteThey have also set up a Export House in Spain to increse their exports...
Regards
Rahul
Steel fibre reinforcement concrete is a composite material having fibers as the additional ingredients, dispersed uniformly at random in small percentages by adding in plain water.
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