GINNI FILAMENTS LTD >>(BSE Code: 590025) (CMP: Rs.62.80) (FV: Rs.10) By Sachin Oak The markets are now awaiting the GST rollout event, which is surely capable of causing big disruptions. As a result, if good quality stocks fall, then it would be an excellent buying opportunity at discounted prices. One such stock is Ginni Filaments Ltd (GFL). Background: GFL was incorporated on 28 July 1982 as a public limited company and promoted by J.K. Bhagat. With the objective of manufacturing cotton yarn, it set up a 100% export oriented unit (EOU) to manufacture cotton combed yarn of fine counts. The plant and machinery were procured from Lakshmi Machine Works Ltd, Coimbatore, Rieter Machine Works, Switzerland, Volkmann GmbH & Company and W. Schlathorst & Company, West Germany. In 1991, it enhanced its capacity by 10,224 spindles. GFL’s product lines are as follows: 1. GFL produces 100% cotton carded, combed and open end yarns at its two units at Kosi (U.P.) and Panoli (Gujarat). The plant and machinery was procured from world-renowned machinery manufacturers viz. Rieter, Schlafhorst. These two units have top of the line support system for quality monitoring. It has a combined capacity of 90,000 spindles and 720 rotors. It produces various types of yarns such as ring spun, open end, and speciality yarns like core spun, ring slub and Elli twist yarns. 2. GFL’s monthly capacity is 300 tonnes of processed knitted fabrics consisting of open-width and tubular width finishes. It produces single jersey, double jersey and flat knit fabrics. 3. GFL has an annual capacity of 10 million knitted basic and fashion garments at its two units in Noida. It has an in-house lab testing facility for all incoming fabric/ trims/ embellishments and the capability of value additions like machine sequin work, bead work, hand sequins work and hand embroidery. It also offers a blend of the above with various print techniques. 4. Its product range includes plain, aperture, embossed, colored, printed, impregnated and chemical treated spunlace roll goods. 5. It desings Ginni NEO filters for removing contaminants from water and other liquids. Due to its novel gradient design and high void volume, it has high filtration efficiency, extremely high dirt holding capacity as well as good retention capability of the contaminants along with low pressure drop. Particulars FY16 FY17 FY18E FY19E P/E (x) 129.9 47 37.4 30.3 P/BV (x) 59.7 25.3 18.1 13.4 EV/EBITDA (x) 67.9 29.1 24.7 20.3 RoCE (%) 46.5 40.3 42.1 44.4
VALUE PICK Financial performance: (Rs. in Lakh)
Particulars Q4FY17 Q3FY17 Q4FY16 FY17 FY16 Total Income 20741 18581 19938 77247 75474 Total Expenses 19678 17765 19581 74067 74627 Exceptional Items - - -119 - -119 Finance Costs 500 641 623 2771 3505 Tax Expense 496 342 18 1385 287 Net Profit 568 474 221 1795 440 EPS (Rs.) 0.78 0.65 0.29 2.46 0.54 6.
GFL also makes disposable wipes with non-woven spunlace fabric, which is treated with active agents for all wiping solutions. Currently, in the traditional textiles business, GFL exports to elite global consumers such as Disney and Benneton. In the non-woven segments, it supplies products like wet wipes, water filters, etc. to consumers such as Johnson & Johnson. This segment has huge potential for growth with hefty margins, which would propel the Company’s fortunes. Performance Review: For FY17, GFL’s profits jumped over 4 times compared to FY16. Its Q4FY17 profits were over 2.5 times higher compared to Q4FY16 and 20% higher compared to Q3FY16. Industry Outlook: The Indian textile industry has the potential to reach $500 bn in size, according to a study by Wazir Advisors and PCI Xylenes & Polyester. This growth implies domestic sales to rise to $315 bn from $68 bn currently and exports to grow to $185 bn from ~$41 bn currently. Indian exports of locally made retail and lifestyle products grew at 10% CAGR over 2013-16, mainly led by bedding bath and home decor products and textiles. This trend will benefit companies like GFL. Conclusion: The non-woven segment will boost the Company’s bottom-line since it is a leader in this segment. Assuming a modest EPS of Rs.3.5 for FY18 and a P/E ratio of 24.72x, its share price could zoom to Rs.88 in FY18 while an EPS of Rs.4 could take it further to Rs.100. Therefore, we have a Buy on the stock with sequential price targets of this is
The shares of this textile sector company are listed in the B Group and have face value of Rs. 10. The shares touched a high of Rs. 65 and low of Rs. 10 in the last 52 weeks. The company exports its products to top companies such as Disney and Benetton. In the non-woven segment, Ginni supplies products such as wet wipes, water filters, to Johnson & Johnson. For the year ended March 2017, it reported turnover of Rs. 208 crores. The net profit was Rs. 5.68 crores. EPS for the year was Rs. 2.56. The shares are trading near the 52-week high due to aggressive buying by top market players. The stock looks poised to touch Rs. 100 in the short to medium term.
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