Ambika Cotton Mills

Disclosure ( No position)

Pros:

• 1. Honest and ethical management maintaining best relations with all stakeholders like suppliers , customers etc. ( can be seen in numbers like low mngt remuneration, low costs and high margins)
• 2. Management which knows what NOT to DO which is a rarity in corporate world especially NOT SEEN in textiles ( I worked in textile industry for 3.5 years)
• 3. Technocrat management ( Mr.Chandran yes- no idea about next generation) is a huge plus in a commodity industry like textiles where very frequent changes in technology is common ( I have done many cost benefit analysis for new machinery as part of my job- But no one sees what is the actual benefit VS projected benefit). People buy machinery bcoz some competitor is buying and hence I also need to buy otherwise I cant match his price and hence my sales shall go down.
• 4. Management with fixed customers ( read in one of the threads that they dont have a sales dept). Believe me, almost all textile cos have good sales teams with good salaries . This is commendable
• 5. Own power – This can be huge problem in textiles and power cost is ever increasing and this shall increase more ( as govts are giving free power to poor and the same burden has to be shared by industry too ) and Buying exchange from exchanges can be huge ( I have done many adhoc analysis reg what should be max power purchase price for each factory) . This is going to reduce power cost and hence increase competitiveness of Ambika.
• 6. Having a fixed product range ( only premium counts) is a huge plus in textiles. Entire workforce in various departments can deliver consistent work as they need not change settings in each stage of yarn manufacturing as and when product changes. If product mix changes frequently lot of wastage shall happen ( I have done lot of product mix analysis in textiles – no need for Ambika to waste time on these as their product mix is fixed)
• 7.Cash rich – As Best cotton can be bought during best time…This shall be huge plus qualitatively for sure …financially , most of the time its advantage unless the cotton price crash drastically in short time…And just to cover fixed costs, lot of kachra orders are run in case of debt ridden textile cos. So its a huge plus.
• 8. Ability to charge premium rates – read in one of the post that they charge 2 to 3% premium pricing as their weaving breaks are less…This is a huge advantage as not just in weaving , due to faults in spinning , lot of wastage could happen at yarn dyeing/ fabric processing stage ( some faults could be known only in weaving, some only in yarn dyeing, some only in processing etc) …( done lot of wastage analysis during my job)…The more late the fault is known, more is wastage as they need to re manufacture the entire fabric and this eats a lot of time and premium orders , time is essence and if delayed orders could be cancelled or they need to be air lifted to meet deadline ( which increases cost like anything) …I have seen people devote exclusive spindles capacity for premium yarn going into premium fabrics …so stable quality is a huge huge plus and I dont think customers shall shift loyalties for few pennies here.