New report from Nuvama on PGIL dated 6th of Sept 24:
Global Presence: PGIL operates across several countries, including India, Bangladesh, Vietnam, Indonesia, and Guatemala. The company is expanding globally, with most of its profits coming from overseas markets.
Leadership & Growth Strategy: The company shifted from being promoter-driven to professionally managed in 2019, focusing on strategic growth and improving profitability under the leadership of its current MD, who has extensive experience in global sourcing.
Diversified Manufacturing Base: PGIL manufactures apparel in five countries, allowing them to meet the needs of a wide range of fashion brands like Ralph Lauren and Tommy Hilfiger. They aim to expand to the Mediterranean region for further growth.
Strong Financial Growth: PGIL’s revenue and profits are growing at a double-digit rate. They have plans to increase their production capacity, supported by investments in India, Bangladesh, and Vietnam, which will drive future growth.
Focus on High-Value Products: The company has improved its product mix by focusing on higher-margin items like outerwear and sportswear, which has contributed to better profitability and operational efficiency.
Asset-Light Model: PGIL uses a combination of in-house manufacturing and partnership models. This approach helps the company scale operations quickly without heavy investments in factories, leading to faster capacity growth.
Capex and Expansion: PGIL has been aggressively investing to expand its operations, spending over INR 500 crore between 2018 and 2024, with plans to spend more in the future to boost production further.
Sustainability & Risk Management: The company operates in a way that ensures long-term sustainability, focusing on efficient operations, low debt levels, and risk mitigation strategies like customer financial health checks and insurance coverage. They are also focused on keeping their operations flexible to handle potential global conflicts or customer bankruptcies.
(Invested and Biased)
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