Hi Janarthanan,
Thanks for appreciation. My answers to your queries –
1). EPS valuation of 18.11 made by me was before I met the mgmt. Till then I just had a talk with IR over phone. Once i met the mgmt – Govind Sharda – he told that there was some delay in the expansion plans which will reduce the projected EPS of 18.11 to some extent. But, again he told that the backward integration is going to help in a big way to increase the EPS. (Backward integration was planned to get finished by end of financial year – which we completed early). He did not tell exact figure. But, we might think to have EPS between 15-18 (18 has a high probability).
2). Sales will be 25% YOY for next 5 years atleast. They have plans to set up processing unit – hiring fashion designers, adding value added products in the portfolio, which will give them entry into global markets. Think when the domestic denim industry is expected to grow at 15-18% CAGR, Nandan is expected to grow at 25% CAGR – basis expansion done, backward integration done, export market entry, etc.
3). Capacity is 99MMPA – but the capacity utilization is 80% – that means 80MMPA. So company has 30 MMPA open capacity left.
Ignore the EPS for this year – it can be 15 or 18 – because still 4 months to go and we do not know how fast or slow the expansion plans will take place. But, if we look into long term – sales are there to grow at 25% CAGR, backward integration is there to help raise EBITDA margins, processing facilities to bring value addition and increased realization per metre.
Mr. Govind Sharda – with surety told that the CFO this year will be 200 cr (133 cr last year).
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