KAMADGIRI FASHIONS LTD: TP Rs 105/
Rationale for Recommendation:
1) Own brands TRUE VALUE and TRUE LINEN gaining popularity
2)Strategic tie-up with FUTURE group to supply 2 million garment
pieces every year
3) Kishor Biyani holds 33.53% stake in KFL through his unlisted companies
4. Consitently dividend paying company
5. Supplying garments to all leading brands in India including
Raymond, Park Avenue, Indigo Nation, Wills, John Players, Blackberry
etc
Mumbai based Kamadgiri Fashion Ltd (KFL) is engaged in production of
Textile Fabrics and Garments.
a) WEAVING DIVISION: KFL has modern weaving plant comprising of
Sulzer, Somet and Psudocama weaving machines
b) GARMENT DIVISION: KFL has been supplying
garments to all leading players like Parx, Lee Cooper, UMM, Rig, Park
Avenue, Arrow BlackBerry, Raymond etc. KFL is one of the major
supplier of garments to Future group and now, through strategic
tie-up, will supply 2 million pieces of garments to Future group each
year.
FINANCIAL PERFORMANCE:
For FY16, KFL has reported turnover of Rs 300 crores with PAT of 1.90
crores. Equity had increased from 5.06 crores to 5.44 crores after
allotment of shares to nonpromoter group @ Rs 62 per share. KFL has
declared div of Rs 1.50 and CMP is cum-dividend
Q1/2016-17 Q1/2015-16
Sales 70 68
PBT 1.22 0.19
PAT 0.80 0.13
Equity 5.87 5.06
EPS Rs 1.36 0.13
KFL has posted VAST
improvement in profit margins for Q1 wherein its sales have gone up
only 3% but PBT has zoomed from 19 lacs to 1.22 crores. PAT stands at
80 lacs vs 13 lacs.
2016-17E 2017-18E
Sales 320 350
Net Profit 4.20 5.50
EPS Rs 7.15 9.35
VALUATIONS:
Current market cap is only 46 crores vs sales of 300 crores for FY16.
Strategic tie-up with FUTURE group to supply 2 million garments every
year ensures steady business growth for KFL.
In House brands TRUE VALUE and TRUE LINEN gaining popularity and will
enhance KFL profit margins
Kishor Biyani holds 33.50% stake
At cmp, KFL is trading @ 8xFY18Eeps which is on lower side
Even if KFL gets modest PERatio of 15, its share price should be Rs
105 based upon FY17 earnings and Rs 140 based upon FY18 earnings
Rationale for Recommendation:
1) Own brands TRUE VALUE and TRUE LINEN gaining popularity
2)Strategic tie-up with FUTURE group to supply 2 million garment
pieces every year
3) Kishor Biyani holds 33.53% stake in KFL through his unlisted companies
4. Consitently dividend paying company
5. Supplying garments to all leading brands in India including
Raymond, Park Avenue, Indigo Nation, Wills, John Players, Blackberry
etc
Mumbai based Kamadgiri Fashion Ltd (KFL) is engaged in production of
Textile Fabrics and Garments.
a) WEAVING DIVISION: KFL has modern weaving plant comprising of
Sulzer, Somet and Psudocama weaving machines
b) GARMENT DIVISION: KFL has been supplying
garments to all leading players like Parx, Lee Cooper, UMM, Rig, Park
Avenue, Arrow BlackBerry, Raymond etc. KFL is one of the major
supplier of garments to Future group and now, through strategic
tie-up, will supply 2 million pieces of garments to Future group each
year.
FINANCIAL PERFORMANCE:
For FY16, KFL has reported turnover of Rs 300 crores with PAT of 1.90
crores. Equity had increased from 5.06 crores to 5.44 crores after
allotment of shares to nonpromoter group @ Rs 62 per share. KFL has
declared div of Rs 1.50 and CMP is cum-dividend
Q1/2016-17 Q1/2015-16
Sales 70 68
PBT 1.22 0.19
PAT 0.80 0.13
Equity 5.87 5.06
EPS Rs 1.36 0.13
KFL has posted VAST
improvement in profit margins for Q1 wherein its sales have gone up
only 3% but PBT has zoomed from 19 lacs to 1.22 crores. PAT stands at
80 lacs vs 13 lacs.
2016-17E 2017-18E
Sales 320 350
Net Profit 4.20 5.50
EPS Rs 7.15 9.35
VALUATIONS:
Current market cap is only 46 crores vs sales of 300 crores for FY16.
Strategic tie-up with FUTURE group to supply 2 million garments every
year ensures steady business growth for KFL.
In House brands TRUE VALUE and TRUE LINEN gaining popularity and will
enhance KFL profit margins
Kishor Biyani holds 33.50% stake
At cmp, KFL is trading @ 8xFY18Eeps which is on lower side
Even if KFL gets modest PERatio of 15, its share price should be Rs
105 based upon FY17 earnings and Rs 140 based upon FY18 earnings
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