Ambika Cotton Mills

Read here about my concerns about RM supply and possibility that Ambika is already using 5-7% of global supply of PIMA + GAZA. http://forum.valuepickr.com/t/ambika-cotton-mills/865/291?u=anil1820

To get clarification on the same I attended AGM. Would not post on the details of AGM as someone has already posted the same. Few highlights

1. MD said he is not aware of the market size or past historical growth of market.
2. Ambika is using 5% of Pima plus Giza global production.
    3. No more spindles expansion.

There is a very high possibility that overall market for Ambika niche cotton is not very large and is not growing. So its unreasonable to expect them to grow volumes at 15% CAGR for next five years. I was under impression that Ambika holds less than 1-2% of market share and can grow comfortably at 15% CAGR Whatever growth will happen post 30K spindles expansion will be driven by forward integration. Promoter is a capable man and am not doubting that forward integration will be any problem. But my understanding that current business could grow at 15% or higher volumes for next 5-7 years was wrong.

I don’t think he is being too conservative is saying that no more spindles expansion. With already 5-7% of global supply which might increase further with current expansion, spindles expansion may no longer be feasible.