Attended AGM today virtually. Find enclosed my quick note for Premco AGM.
Current capacity utilisation is 70-80% for Woven elastic and 50% for Knitted elastic. FY23 decline in India was due to lower demand in domestic market while Vietnam performance was adversly affected due to lower demand from USA which is main market for export in Vietnam capacity.
The company added 10 new customer, 6 in domestic market and 4 in Export market. FY24, the company expect 10-15% growth
New plant in Umargaon is expected to commence production from FY25. Expect total turnover of Rs 50 Cr at optimum capacity utilisation, on total capex of Rs 18 Cr. In First year of operation expect turnover of 10-15 Cr.
Trying to add new customer from Europe market, which would assist in long term growth propsect of the company.
Vietnam cost of production is lower due to lower Power cost and income tax as compared with Indian market.
Audit fees, there was no major jump. FY22 Taxation fees was not included in Audit fees which has been reclassify which show in major jump in FY23.
The company has no plan to list on NSE in short term.
Top 5 cusomer account for 60% of revenue.
The company paid Rs 1.39 Cr to minority partner in Vietnam (actual investment by selling investor was Rs 1.25 Cr)
The company taken note of investors about excess cash on balance and would increase dividend payout/ buyback of equity share future.
While the shareholder attempted to ask where pointed question, the management continue to remain reserved answering question in my view. They are not very open about their future growth plan. In fact critical question about rationalising production to two new plant vis current manufacturing at 5 location (including Mumbai/Palghar) remained unanswered. Overall, get feeling that management /promoter are happy with status quo and it would take some more time for extenal/internal factors to move management out of their confort zone. Till that time, company would continue to run in auto pilot mode with no major growth in my view.
Disclsoure: Among my Top 15 investment due to higher dividend yield and strategic geography for capacities in India and Vietnam. My view may be positively biased due to my investment. I may exit/increase my allocation in the company without informing the forum. I am not SEBI registered investment advisor. I am not recommeding any investment action in company.
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