Page 2 Source: Company, www.dynamiclevels.com
Himatsingka Seide Ltd - Reap the reward of CAPEX
Company Overview……………………………………………………………3
Company’s Milestone and Stock price…………………….…….……..4
Product Overview……………………………………………………….……..5
Retail and Distribution…………………………………………….……..…8
Textile Outlook Industry……………………………....………….…..….10
Company Financials………………………………………………….……..12
Peer Comparison……………………….......…………….………….……..17
Company’s Future Outlook…………………………………….…….…..20
Capex Plan of the Company…………………………………………...….21
Investment Rationale…………………………………….…………...….…22
Page 3 Source: Company, www.dynamiclevels.com
Company’s Overview
The Himatsingka Group focuses on the manufacturing, retailing and
distribution of Home Textile products.
The Group operates with the largest capacities in the world for producing upholstery fabrics, drapery fabrics and bed linen products.
The Company has its wings across Asia, Europe and North America. Its retail and wholesale distribution divisions carry some of the most prestigious brands in the Home Textile space.
Himatsingka Group, founded in 1985, focuses on design and product development, best-in-class manufacturing processes and efficient supply chain capabilities. The company ensures the highest level of customer service in the industry. It has a team of over 5000 people. The Group continues to expand its reach and build capacities in the Home Textile space.
Himatsingka Group is integrated from manufacturing in India to
retail and distribution networks across North America, Europe and
Asia. The Company‟s retail and distribution networks cater to over
8000 points of sale including 200 shop-in-shops of its licensed
brands in major departmental stores and 25 exclusive retail stores.
An integrated model and supply chain expertise enables the Group
to service retail and distribution networks across 22 countries.
North America
In North & South America, company operates through
1. DWI Holdings 2. Divatex.
DWI Holdings is the licensee of brands such as
1. Calvin Klein Home 2. Barbara Barry
Divatex is the licensee of Esprit and caters to Private Label programs of major retailers.
Europe
In Europe, the Group operates through Guiseppe Bellora S.P.A. Bellora is amongst the most recognized Italian luxury-bedding brand and has broad distribution reach across Italy and other parts of Western Europe.
Asia
In Asia, the Group operates through Himatsingka Wovens. This division controls the „Atmosphere‟ brand and has retail networks in India, the Middle East and South East Asia.
Geographic Segments in INR (2015)
Sales (M)
% Revenue
USA 1682.50 86.70%
Europe 150.40 7.75%
Others 42.60 2.19%
Reconciliation 36.60 1.89%
India 28.50 1.47%
Total Sales 1940.60 100%
Geographic Segment
USA
Europe
Others
COMPANY PROFILE OF HIMATSINGKA, NSE, INDIA
Date of Incorporation 23-Jan-1985
Date of Listing 10-Jan-1995
Management
Name Designation
Dilip J Thakkar Chairman
K R S Murthy Director
Berjis M Desai Director
Rajiv Khaitan Director
Aditya Himatsingka Executive Director
Shrikant Himatsingka Executive Director
Jayshree Poddar Executive Director
D K Himatsingka Managing Director
A K Himatsingka Vice Chairman
Registered Office Address
No. 10/24 Kumara Krupa Road,High Grounds (Near Sindhi High School),560001,Bengaluru,Karnataka,India
Website
http://www.himatsingka.com
Page 4 Source: Company, www.dynamiclevels.com
Company’s Milestone & Stock Price
1985: Himatsinka Seide Ltd incorporated
1986: Launched IPO
1998: Expansion of weaving capacity - Stock Price ranged between Rs. 11 to 16
2003: India's first luxury home furnishing brand 'Atmosphere' is
launched- Stock Price ranged between Rs. 23 to 84.15.
2005: Construction of the vertically integrated Greenfield Bed Linen manufacturing facility at the Hassan SEZ, Karnataka, India commences. Stock Price ranged between Rs. 96 to 169.
2007: Acquisition of Giuseppe Bellora S.p.A (Italy) bed linen brands in Europe. Acquisition of Divatex Home Fashions, Inc., the acquisition of DWI Holdings, Inc., a leading branded Home Textile player in the North American market and a licensee of the Calvin Klein Home and Barbara Barry brands. Stock Price fell from Rs. 150 to 95.
2008: Retail supply chain center at Doddaballapur, Karnataka, India goes on stream. 'Atmosphere' launches its first international stores in Dubai and Singapore. Stock Price fell from Rs. 135 to 24.
Stock is trading at Rs. 209.50 made 52 week high of Rs. 248.40 on 6
th Jan 2016 and 52 week low of Rs. 74.05 on 9
th Jun 2015.
Life time high for the stock is at Rs. 337.50 on 30th
Aug 2005 and life time low of Rs. 18.00 on 6
th Mar 2009.
Stock has surged 152.58% in 1 year having a beta with index of 1.65.
Himatsingka Share Price Performance
SYMBOL HIMATSINGKA
Current Price 209.50
Face Value 5
52 Week High 248.40 (06-Jan-16)
52 Week Low 74.05 (09-Jun-15)
Life Time high) 337.50 (30-Aug-05)
Life Time low 18.00 (06-Mar-09)
ADM (Avg Movt) 9.87
Average Volume 216994
1 Month Return 12.12%
P/E Ratio (x) 13.93
Book Value 81.75
Market Cap 2090.25 (Cr)
Promoter pledged Nil
Red – Himatsingka Yellow – Nifty Source: Bloomberg
Page 5 Source: Company, www.dynamiclevels.com
Product Overview
Bed Linen
Himatsingka is one of the largest producers of bed linen products in the world. Its vertically integrated manufacturing facility is equipped with the latest warping, sizing, weaving, continuous processing, yarn dyeing and sewing facilities.
The Company has a capability to offer both piece dyed and yarn dyed products along with embroidery and quilting. Himatsingka holds a diverse position in this area.
Plant Location: Hassan SEZ, Karnataka, India
No. of employees: 4000
Weaving Capacity: 21 million metres per annum.
Processing Capacity: 23 million metres per annum.
Cut & Sew Capacity: 3.8 million sheet sets per annum.
Products Offered: Complete bed ensembles including
Sheet Sets,
Pillowcases & Decorative Pillows
Duvets
Comforters
Bed Skirts
Shams and Dust Ruffles
The facility also offers a wide range of quilted products.
Weaves: This facility offers a wide range of weaves from basic Percale and Sateen to more complex hybrid weaves such as
Dobbies
Twills
Matelesse and Jacquards.
Finishing: Products are offered with a variety of handle and finishes such as
Soft
Wrinkle-free
Antibacterial
Water Repellent and Stain Resistant
Plant Located at
Karnataka
With 4000
Employees
Capacity
21
Million
Mtrs
Products
a. Sheet Sets
b. Pillowcase
c. Duvets
d. Comforters
e. Decorative Pillow
f. Bedskrits
g. Shams
h. Dust Ruffles
Bed Linen
Page 6 Source: Company, www.dynamiclevels.com
Cut & Sew: The cut & sew facility is equipped with automatic cutting machines and has the largest installation of ETON conveyer systems for bedding products in India.
Design Capabilities: The Group's design studios offers a variety of fabric and hem treatments along with embellishments like embroidery of logos, insignias and crystals. The design team continuously strives to create fresh, functional and appealing bedding components. Embroidery treatments add flavor to the fashion bedding products.
Fibre Specifications: Finest cotton yarns such as
Supima
Egyptian
Seasell blends and Indian cotton
Drapery & Upholstery
The Drapery and Upholstery fabrics manufacturing facility is one of the largest of its kind in India and in the world. The operation is vertically integrated from pre-weaving yarn preparation to post-weaving finishing processes.
The facility was built with a vision to produce Drapery and Upholstery products that epitomize cutting edge design and quality. Over the years, products have become most recognized brands in the world.
Plant Location: Doddaballapur, Karnataka, India
No. of employees: 700
Capacity: The facility has an installed capacity of 2.2 million metres per annum.
Products Offered: Fabrics for Drapery and Upholstery applications.
Product Type: The facility manufactures a wide range of fabrics from ultra lightweight sheers to heavy velvets in a variety of weaves from simple Dobbies to very complex Jacquards. This facility is equipped to weave fabrics on high-density warps with a repeat size of up to 140 cms.
Design Capabilities: The Group's design studios in New York, Milan and Bangalore have over the years created an archive of over 25000 products. The teams add 1500 new products every year. Customers have the flexibility to choose from the existing product archives or provide customized requirements.
Drapery &
Upholstery
Plant Located
at Karnataka
700
Employees
Capacity
2.2
million
meters
p.a
Product:
Complex
Jacqards
Page 7 Source: Company, www.dynamiclevels.com
Processing & Finishing:
Abrasion Resistance
Knit Backing
Stain Resistant
Flame Retardancy
Fibre Specifications: Fibres like Silk, Cotton, Linen, Acrylic, Wool, Polyester and Viscose are used to produce an assortment of fine Drapery and Upholstery fabrics suitable for both residential and institutional applications.
Quality Certifications: This facility is certified for ISO 9002 and has recently acquired certification for ISO 14001 which ensures that the production of fabrics has no harmful effect on the environment.
Silk & Blended Yarn
The Spun Silk facility at Himatsingka manufactures 100% Spun Silk yarn as well as Silk yarns blended with Wool, Tussar & Linen. This division predominantly caters to the requirements of the Drapery and Upholstery manufacturing division and also selectively caters to clientele who require high quality Spun Silk and blended yarns.
Plant Location: Doddaballapur, Karnataka, India
No. of employees: 80
Capacity: The facility has an installed capacity of 200 MT per annum.
Product Type: A wide variety of yarns – singles and twisted, are produced at this facility. Plain and fancy yarns suitable for weaving as well as for flat bed and circular knitting are produced here. Regular, Gassed and Shantung qualities are offered from this facility.
Products Offered:
Spun Silk
Silk Blended
Silk Blended with Linen
Silk Blended with Tusaar
Silk Blended
Yarns
Plant Located at
Karnataka
Located at
Karnataka
Capacity 200 MT
p.a
Product: Single
and Twisted Yarn
Page 8 Source: Company, www.dynamiclevels.com
Retail and Distribution
North America
DWI Holdings, a subsidiary of Himatsingka, is focused in operating in the branded Home Textile space.
DWI Holdings has exclusive licenses for the sourcing, marketing and distribution of luxury home textile brands –
Calvin Klein Home
Barbara Barry
Bellora Hospitality
These brands are amongst the most prestigious and recognized home textile labels in the North American market.
Calvin Klein Home is the second largest luxury bedding brand distributed through department stores in the United States.
The DWI product line includes
Sheets
Pillowcases
Duvet Covers
Bed Skirts, Pillow Shams
Decorative Pillows
In addition the product line includes home accessories as well as Blankets, Throws, Towels, Bathrobes, Turndown Mats and Bath Rugs.
DWI is equipped with state-of-the-art warehousing and supply chain capabilities to ensure the highest standards of service for its customers.
Divatex
Divatex, a subsidiary of Himatsingka, is amongst the largest Home Textile distribution companies in North America.
Divatex sources and distributes a wide range of products from Sheets and Pillowcases in cotton, polycotton, microfiber and other blends to Top-of-Bed products, Duvets, Shams, Comforters, Decorative Pillows, Bed Skirts, Coverlets, Quilts, Throws, Blankets and more.
Divatex is committed to its customers, and services them through major Specialty Home Stores, Department Stores, Warehouse Clubs and Catalogues.
Himatsingka
Seide Ltd at
North America
DDWI Holding
Divatex
Calvin
Klein
Home
Barbara
Barry
Bellora
Hospitality
Operating
Branded
Textile
Textile
Textile
Distribution
Page 9 Source: Company, www.dynamiclevels.com
Europe
Giuseppe Bellora S.P.A
Bellora, a subsidiary of Himatsingka, is amongst the most recognized luxury bedding brands in Italy.
Founded in 1883, the brand epitomizes heritage and tradition. The brand retails through 35 exclusive Bellora stores, multi-brand outlets and luxury departmental stores in Italy and other parts of Western Europe.
Its product lines include
Fine bedding,
Bath
Allied home accessories
The design and product development capabilities of Bellora give its products a unique presence across markets.
India / Asia
Himatsingka Wovens
A global luxury home textile brand, Atmosphere is designed for
the discerning. The brand offers an exclusive collection of luxury products like
Drapery
Upholstery
Bed Linen
Its products are tailored to comply with both residential and institutional applications.
A large part of the Atmosphere collection has been conceived
and developed at the design studios of Himatsingka. Its emphasis on evolved aesthetic and superior quality enables the manufacture of finest fabrics in the world.
Atmosphere has 9 exclusive stores across India and U.A.E. Of its
9 stores, 8 are located in India across 7 cities with 1 store in Dubai.
Himatsingka Seide
LTD
Atmosphere
35 Stores
India /
Asia
Europe
Bellora
9 Stores
Page 10 Source: Company, www.dynamiclevels.com
Textile Industry Outlook
Why textile Industry is a priority sector in India
India‟s textiles sector is one of the oldest industries in
Indian economy.
Textiles sector is among the largest contributors to India‟s
exports with around 11 per cent of total exports.
The textiles industry is also labour intensive and is one of
the largest employers.
The industry has export earnings of worth US$ 41.4 billion
in 2014-15, a growth of 5.4 per cent, as per The Cotton
Textiles Export Promotion Council (Texprocil).
The industry is the second largest employer after
agriculture, providing employment to over 45 million people
directly and 60 million people indirectly.
The Indian Textile Industry contributes approximately 5 per
cent to India‟s gross domestic product (GDP)
The Industry contributes 14 per cent to overall Index of
Industrial Production (IIP).
The textile industry caters both organized and unorganized segment.
Unorganised sector consists of:
Handloom
Handicrafts
Sericulture, These are operated on a small scale and through traditional tools and methods.
Organised Sector consists of:
Spinning
Apparel and
Garments segment This applies modern machinery and techniques such as economies of scale.
Export earnings is of worth
US$41.4 billion in 2014-15
Provide
employment to
45 million people
directly & 60
million people
indirectly
Contribute 5%
to GDP
Contribute
14% to IIP
Page 11 Source: Company, www.dynamiclevels.com
Expectations and Achievements of Textile Industry
The Indian textiles industry, currently estimated at around US$ 108 billion, is expected to reach US$ 223 billion by 2021
The Indian textile industry has the potential to reach US$ 500 billion in size according to a study by Wazir Advisors and PCI Xylenes & Polyester.
The textiles sector has experienced a spurt in investment in last five years. The effect is seen in stock price which has given multiple returns to the investors.
Foreign Direct Investment (FDI) worth US$ 1.77 billion during April 2000 to September 2015 has been attracted.
Government initiatives on Textile industry Narendra Modi led Government wanted to create job for both skilled and unskilled labour to fulfill his promise post budget. This sector has potential to generate employment and at the same time can help in boosting Indian economy. Government has taken lots of initiatives in this direction.
It has allowed 100 per cent FDI in the Indian textiles sector under the automatic route.
Government has promoted “India Handloom” on social media to connect to people outside India.
The Ministry of Textiles invested Rs 200 crore in Technology Mission on Technical Textiles (TMTT). The objective of TMTT is to develop world class testing facilities at eight Centres of Excellence across India.
The Government will soon announce a new National Textiles Policy. With the help of this new policy government expects to create 35 million new jobs by attracting investments from foreign companies, as per Textiles Secretary Mr. S K Panda.
The Government of India provides aid for creation of infrastructure in the parks to the extent of 40 per cent with a limit up to Rs 40 crore (US$ 6 million).
The major machinery for production of technical textiles receives a concessional customs duty list of 5 per cent.
The government has also proposed to extend 24/7 customs
clearance facility at 13 airports and 14 sea ports resulting in
faster clearance of import and export cargo.
Indian Textile
Industry is expected
to reach US$ 223
billion by 2021
Page 12 Source: Company, www.dynamiclevels.com
Company Financials
Analysis of Profit
Statement of Profit
In Cr
Dec-15 Mar-15 Mar-14 Mar-13
3 Quarter Cumulative
Annual Annual Annual
Revenue 1436.03 1940.58 2028.22 1689.43
Operating Profit 187.44 169.89 142.59 105.69
Other Income 3.78 6.66 4.65 8.98
Interest 65.66 85.09 79.69 65.28
P/L Before Tax 125.66 91.46 63.41 51.74
Tax 1.68 -3.04 8.91 -1.21
PAT 123.98 94.50 54.50 52.95
EPS (Rs.) 12.59 9.69 6.43 5.82
% Growth
Particulars FY 2015 to FY 2016*
FY 2014 to FY 2015
FY 2013 to FY 2014
Revenue -26.00% -4.32% 20.05%
Operating Profit 10.33% 19.15% 34.91%
Other Income -43.24% 43.23% -48.22%
Interest -22.83% 6.78% 22.07%
P/L Before Tax 37.39% 44.24% 22.56%
PAT 31.20% 73.39% 2.93%
EPS (Rs.) 29.93% 50.70% 10.48%
In last 3 Quarter (2015-2016) company has made sales of Rs.
1436.03 Crs. vs Rs. 1940.58 Crs last year and has an average
quarterly sale of Rs. 485 Cr. So if the company‟s post sales for
March Quarter of 2016 is in same line, then annual sale should
stand at Rs. 1921 crs. i.e. annual sales would be at par with that
of March 2015 annual sales.
However, company has already beat its last year ‟s profitability in
3 quarters and the EPS for three quarter stands at 12.56 VS 9.69
growth of 29.93%.
Interest cost has fallen by 22.83%. Net Debt is 780 Crores.
Segment wise revenue % of
STO
Sheet Sets - Bed Linen
Fabrics
Bed Linen - Traded
Power
Yarns
Fabrics -Bed Linen
Segment wise revenue
Product Name % of STO
Sheet Sets - Bed Linen 78.63
Fabrics 12.06
Bed Linen - Traded 3.27
Power 2.18
Yarns 1.14
Fabrics - Bed Linen 0.96
Page 13 Source: Company, www.dynamiclevels.com
Analysis of cost
Analysis of Cost
In Cr
15-Dec 15-Mar 14-Mar 13-Mar
3 Quarter cumulative
Annual Annual Annual
Consumption of Raw Materials
416.44 496.40 995.26 442.59
Purchase of Traded Goods
417.41 695.61 507.86 652.01
Employees Cost 141.39 193.44 200.15 171.83
Depreciation 35.22 44.64 54.38 52.16
Other Expenses 205.99 281.40 311.19 259.16
Total Expenditure 1248.59 1770.69 1885.63 1583.74
% Movement In Cost
In Cr FY 2015 to FY 2016*
FY 2014 to FY 2015
FY 2013 to FY 2014
Consumption of Raw Materials
-16.11% -50.12% 124.87%
Purchase of Traded Goods
-39.99% 36.97% -22.11%
Employees Cost -26.91% -3.35% 16.48%
Other Expenses -26.80% -9.57% 20.08%
Total Expenditure -29.49% -6.10% 19.06%
From above table it is clear that the company has been able to
lower down its cost i.e. the company is performing with cost
efficiency and overhead cost well managed year on year.
We can see from above table that the company‟s topline is
consistent Year on Year, but by well managed cost and
economies of scale, the company is able to grow on bottom line.
Page 14 Source: Company, www.dynamiclevels.com
Balance Sheet Himatsingka seide Limited | As at March 31, 2015
Page 15 Source: Company, www.dynamiclevels.com
Page 16 Source: Company, www.dynamiclevels.com
Page 17 Source: Company, www.dynamiclevels.com
Peer Comparison
Price & Volume Comparison
INSTRUMENT Price Avg.
Volume Market Cap (Rs. in Cr)
HIMATSINGKA 209.50 216994 2090
WELSPUN INDIA 99.30 1010091 9580
SRF 1398.00 163057 7960
ARVIND 267.60 1658161 6982
INDO COUNT 1068.90 62430 3872
KPR MILL 869.30 12668 3179
TRIDENT 51.80 575334 2600
Above comparison shows that average Market cap of the industry is 2500cr (removing extremes) and Himatsingka Seide has Market cap of 2090 and average volume is 2 lakhs which means company has good market liquidity.
FII Holding & Ratio Comparison
INSTRUMENT % FII
Holding P/E Ratio
(X) Debt Equity
Ratio (X)
HIMATSINGKA 7.40 14.00 0.83
WELSPUN INDIA 5.02 14.00 1.81
SRF 16.09 21.00 0.89
ARVIND 10.47 23.00 1.26
INDO COUNT 8.50 20.00 1.1
KPR MILL 3.20 15.00 0.8
TRIDENT 0.00 12.00 1.52
Industry PE of textile sector is at 18.50 and standard Debt Equity ratio should be below 2. This suggests that comparing to Industry PE stock is still trading at a lower level.
Financial Comparison
INSTRUMENT Annual Sales
Mar 15 Operating Profit in Cr
Net Profit in Cr
HIMATSINGKA 1940.58 168.89 94.5
WELSPUN INDIA 5302.51 941.25 544.29
SRF 4539.85 481.87 302.81
ARVIND 7851.4 800.5 337.62
INDO COUNT 1781.8 297.68 145.87
KPR MILL 2565.75 283.28 173.57
TRIDENT 3786.05 370.18 117.87
Ratio Analysis
Current Ratio (x) 1.8
Quick Ratio (x) 0.59
Dividend Yield (%) 0.94
Interest Coverage Ratio (x) 2.59
Debt Equity Ratio (x) 0.83
Return On Asset (%) 7.61
Return On Equity (%) 11.85
Page 18 Source: Company, www.dynamiclevels.com
Profitable Comparison
INSTRUMENT Net Profit
in Cr Equity in
Cr FV
EPS
HIMATSINGKA 94.50 49.23 5.00 9.69
WELSPUN INDIA 544.29 10.46 53.76
SRF 302.81 5.84 52.74
ARVIND 337.62 25.84 13.21
INDO COUNT 145.87 3.94 38.95
KPR MILL 173.57 3.76 45.73
TRIDENT 117.87 50.80 2.47
Price Performance Comparison
INSTRUMENT 1M 3M 6M 1Y Movt Post
Budget
HIMATSINGKA 7% 6% -4% 153% 38%
SRF 15% 26% 6% 25% 32%
KPR MILL 9% 16% 10% 46% 31%
INDO COUNT 13% 5% 14% 138% 28%
KITEX 8% -19% -46% -39% 23%
TRIDENT -1% 19% 11% 117% 21%
WELSPUN INDIA 1% 23% 25% 134% 14%
ARVIND -2% -11% -7% 3% 6%
Post budget* Himatsingka seide has been a top performer in textile sector with return of 38%. (*Budget was announced on 29
th
Feb 2016).
Dividend History
Announcement Date Ex-Date Amount Interim/Final
11-Mar-16 22-Mar-16 1 Interim
25-May-15 4-Sep-15 2 Final
15-May-14 8-Sep-14 1.5 Final
27-May-13 26-Jul-13 1 Final
26-May-12 9-Aug-12 0.5 Final
31-May-10 24-Aug-10 0.25 Final
5-Mar-07 16-Mar-07 1.25 Interim
9-Oct-06 2-Nov-06 1.25 Interim
31-May-06 13-Jul-06 1.25 Final
Share Price Performance in INR
Price 212.30
52 Week High 248.40
52 Week Low 74.05
52 Wk Beta 1.65
1M Return 7.2%
6M Return -4.2%
52 Wk Return 152.8%
Page 19 Source: Company, www.dynamiclevels.com
Last 2 Week Delivery Position
Date High Price
Low Price
Total Traded
Qty
Deliverable Qty
Delivery % Qty
4-Apr-16 201.2 195.55 146318 54346 37%
5-Apr-16 196.35 186.6 142991 76254 53%
6-Apr-16 192.7 187 132162 55498 42%
7-Apr-16 194.9 188.25 108896 49109 45%
8-Apr-16 190.5 185.55 179082 76149 43%
11-Apr-16 189 185.3 154493 85661 55%
12-Apr-16 194.75 187.6 239024 109308 46%
13-Apr-16 195.6 191.4 174622 92968 53%
18-Apr-16 213.8 191.2 1288574 432229 34%
Highest deliverable quantity was seen at 194.75 to 187.60 levels on 12
th April 2016 and at 191.20 to 213.80 with deliverable
quantity of 1.09 lakhs shares and 4.32 lakhs shares respectively. So 190 level can be a good base for the stock.
Top Large Deals
Date Exchange Quantity Price Value(Cr) Time
21-Mar-16 NSE 490755 199.50 9.79 10:58
Shareholding Pattern Mar-16 Dec-15 Sep-15 Jun-15
Promoter & Promoter Group (%)
57.22 57.22 57.22 57.07
Indian 55.96 55.96 55.96 55.81
Foreign 1.26 1.26 1.26 1.26
Institutions (%) 14.92 15.01 12.42 15.15
FII 8.26 7.40 4.64 0.26
DII 6.62 7.61 7.78 14.89
Non Institutions (%) 27.86 27.77 30.36 27.77
Bodies Corporate 3.76 NIL 5.69 4.74
Others 24.10 27.77 24.67 23.03
Custodians NIL NIL NIL NIL
No. of shares (cr.) 9.85 9.85 9.85 9.85
Page 20 Source: Company, www.dynamiclevels.com
Company’s Future Outlook - by Management:
Shrikant Himatsingka Executive director
1. Company is operating about 12-14 brands and aspire to
achieve about Rs 1200 crore in revenue from brands in the
next two-three years.
2. North America is largest market so company has a large
position in that geography across the United States, Canada
and Mexico.
3. Shrikant expect some softness in demand in the European
geographies and the Indonesian areas where they are
present. So, North America is the geography that will sort of
lead the growth for them.
4. Company‟s manufacturing performance has been extremely
strong and they see the underlying buoyancy to continue as
far as manufacturing is concerned.
5. Both plants perform reasonably well and in FY 2017 as stated
earlier they are scheduled to commission new sheeting
capacities by June 2016 for which they are running on
schedule, so next year is also going to see some incremental
capacities that will come their way which would give further
boost to company‟s manufacturing performance.
6. Debt number of the company is 878 Crores gross 780 Crores
net 98 cash and cash equivalents.
7. Larger benefits were expected in FY 2016 but company admits
that they are seeing some delays in some of the initiatives
that they have taken. They have some delays in it bearing
fruit so they see the greater impact of these initiatives coming
through in FY 2017.
8. Company expects stable state for retail and distribution
business that should throw up EBITDAs in the region of 6%, to
7%.
9. More than Channels Company is more focused on building
mid and large size client basis and that is why they are
exiting micro clients as far as their business complexion is
concerned on the bedding side and bath side of the business
that has because some soften in revenue. They see it
stabilize going into Q1 at this point and they see the uptick
begin possibly in Q2 FY 2017.
Greater impact of initiatives
will be seen in FY 2017.
Expected EBITDAs in the
region of 6%, to 7%.
Company is focusing on
mid and large size clients
Page 21 Source: Company, www.dynamiclevels.com
Capex Plan of the company
1. The cumulative Capex Plan that has been planned by the
company, stands at 1281 Crores across three projects
which is sheeting project, spinning project and the terry
towel project.
2. The company has indicated earlier that the timeframe for
these projects will be over in the next three years. Of
these three projects, the company has commenced work
on the expansion of its current sheeting plant, the
capacity of which will be enhanced from 23 million
meters per annum to 46 million meters per annum.
3. The schedule date of commissioning of this expansion
currently stands for June 2016 this project entails an
investment of just over 200 Crores.
4. The total investment that the company foresees in its
spinning plant will stand at just over 600 Crores and the
total investment in the terry towel facility will stand at just
over 400 Crores.
5. Himatsingka plans to set up a total capacity of 211584
spindles, for which construction has not commenced
yet.
Capex Plan planned
stands at 1281 Cr.
Project will be over
in next 3 years
23 million meters
will enhanced to
46million meters
p.a.
Spinning & Terry
towel plants will
start in next quarter
Page 22 Source: Company, www.dynamiclevels.com
Investment Rationale Increasing manufacturing capacity & backward integration will
lead to growth in margin.
With a long-term focus on sustainable and profitable growth,
Himatsinka Seide Ltd has earmarked a capacity expansion plan
of Rs.1281cr. to expand company‟s manufacturing capacity.
The investments entail an increase in its current bed linen
capacity, backward integration into spinning and foray into terry
towels.
The company‟s stock price is trading below industry PE of 20.
The company has planned a Capital Expenditure of Rs.600cr.
for backward integration into spinning with a capacity of
211,584 Spindles, for captive purpose which can cater to
existing bed linen capacity.
Spinning plant is expected to start operation by FY18. The
backward integration process is expected to be margin
accretive with improving operational flexibility, execution
consistency and quality standards.
The company plans to foray into Terry towels manufacturing
with a capacity of 25,000 TN per annum with a CapEX of
Rs.450cr. Terry towel plant is expected to generate revenue
from FY19.
Himatsinka Seide Ltd is a Multibagger Stock recommended by
Dynamic Levels.
Data source: Bloomberg, BSE India, NSE India
Page 23 Source: Company, www.dynamiclevels.com
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