Breaking News:

KAMADGIRI FASHIONS LTD: *Can merge with Future Retail*

Rationale for Merger:

Strategic tie-up with FUTURE group, KFL supplies 2 million garment
pieces every year

_Kishor Biyani holds 33.53% stake in KFL through his unlisted companies_

JFL is  Consitently dividend paying company,
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, supplies 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. EPS was 3.68 and CASH EPS Rs 10.34

                      2017-18E

Sales                350

Net Profit          6.50    

EPS Rs               12

VALUATIONS:

*Current market cap is only 55 crores vs sales of 300 crores for FY16*

Even if KFL gets modest PERatio of 15, its share price should be  Rs 180 based upon FY18 earnings

HOWEVER SINCE KISHOR BIYANI ALREADY HOLDS BIG STAKE IN KFL AND KFL IS MAJOR GARMENT SUPPLIER TO FUTURE GROUP, KFL LIKELY TO BE
MERGED WITH FUTURE RETAIL WHICH WILL ENHANCE SYNERGY OF OPERATIONS AND COST CUTTING AT KFL. *SHAREHOLDERS OF KFL MAY GET 1 SHARE OF FUTURE RETAIL FOR EVERY 2.5 SHARES*