AGM on 2nd Sep & was addr by Mr. Vayu Garware CMD.Highlights by Capital Mkt
Newer Geographies, more and innovative products, more sale of high value added products, higher exports etc were the main reasons for around 14% growth in sales and about 61% growth in PAT for FY’15.
Based on user industry, broadly Company’s business is divided into various segments such as Fishing, Aquaculture, Agriculture, Geosynthetics, Sports, Coates fabrics, Ropes etc. Fishing is more of traditional business which is about 20% of total turnover, Aquaculture constitute about 15-20%, Agriculture about 15-20%, Ropes about 13%, Sports about 10%, Geosynthetics about 7% and rest would be from various other segments.
Company launched several solutions in Acquaculture industry, which was well received by the markets and particularly in exports. Management expects the segment to continue to do well in FY’16 as well.Exports now account for about 49% of total sales and grew by about 13% YoY in FY’15. Management expects export to hover around 50-55% of total turnover. Company exports to more than 75 countries. North America, Europe and Australia are the major markets.There was a forex gain of around Rs 1.35 crore for FY’15 as compared to forex gain of around Rs 6.75 crore in FY’14
Geosynthetis is probably the only segment which did not pick up well, as compared to other sectors, given slower reforms and not much infrastructure activity going around.The company has sufficient capacities with latest technology to meet the increasing demand in Pune, Wai and in Silvassa.On defense side, the company is present in a very small way in the form of weather proof enclosures.The value added businesses like Aquaculture, Agriculture, Sports etc are growing very well for the company, while the traditional businesses of fishing is more or less steady.Sports, which is around 10% of net sales is growing strongly. Lot of export market opportunities await in this segment.
The prices of major raw materials, both PP and HDPE were lower on YoY basis. Company either imports them or procures from RIL or other local players. While generally the lower raw material costs is a pass through, the company is able to retain some benefits in value added products..Margins in the new business remain high. Management is confident of sustaining the margins of around 11% as reported in Q1 FY’16.
Overall, the company aims to clock turnover of about Rs 950 crore by FY’16 with Agriculture, Aquaculture and Sports being main drivers of growth with higher operating margins.
Posts tagged Value Pickr
Garware Wallropes (03-09-2015)
VP CHINTAN BAITHAK GOA 2015: Donald Francis: INVESTMENT JOURNEY/PHILOSOPHY (03-09-2015)
Nice to know on the next step, you are buying heavily into contra bets. esp, now that the markets have heavily rewarded HQ businesses. Would you mind sharing with us a few of your ideas here?
Omkar Speciality Chemcials Ltd — OSCL (03-09-2015)
one concern I have is inordinate amount of debt – Rs. 175 Cr. in total as per AR – the company can barely service its interest on the loan with the present cash flows – interest cover is barely 1.5. In such a turbulent global environment, having 150 days receivables with forex volatility and such debt and pledged shares amplifies the risks
I really like the path the company is taking but at CMP, I think a slight dip in sales can be catastrophic and can induce pledged share selling.
Request you to think over it.
Screener.in: The destination for Intelligent Screening & Reporting in India (03-09-2015)
Thanks @ayushmit @pratyushmittal for giving the old screener back. 
Forensics and the art of triangulation (03-09-2015)
Almost all the companies which are hidden gems and almost all which have been doscovered through Valupickr will fail the test of Point 1 and Point 2
Probably thats why investing is an art and not a science.
Syngene International IPO – Views invited (03-09-2015)
Thanks a lot for your detailed analysis Mahesh. It helped me a lot to understand this company in a better way.
I went through its DRHP doc and have some questions on that.. would be great if you/others can throw some light on that to understand it better:
It’s mentioned that, as on March 31,2015 they had around 2685 employees and out of which 258 are PHD’s and 1665 are Masters(degree in Science). Out of 1665, 400 employees are dedicated to BM R&D Center..
And during last fiscal, they serviced 221 clients. Since company works like a R&D center for clients where dedicated employees are required, I was wondering how company is able to manage less than 6 resources per client(for remaining ones)
However, I completely agree that it has got a great potential to grow in future.
I understand that, Quintiles also works in the same domain. Any inputs on sourcing the brokerage reports/industry reports to understand Syngene in better way would be of great help.
Thanks
Disc: Invested.. 1% of portfolio. waiting for some correction to add more 
KRBL- The King of Basmati rice (03-09-2015)
Very nice presentation @leon_lph. Thank you for sharing.
Sugar Cycles: 7-8 years of losses followed by 2-3 years of super gains! (03-09-2015)
Thanks for putting up this chart. I have also been tracking sugar prices and expect a cyclical recovery but I am not yet sure if it would be this year but more optimistic sometime in the coming year. Do have a look at the brazilian currency as a variable on the sugar prices (sugar no. 11). When looking for for technicals for cyclicals (recovery) do look at long term charts say 25-30 yrs. I am trying to figure out if fed hike makes any impact on the sugar cycle. But yes there are signs that we are near (4-14 months) a cycle reversal.
Forensics and the art of triangulation (03-09-2015)
@mantri – great work. we learn from each other. Find attached something I read recently – read through the entire blog slowly – its quite a revelation.
sort of reminds one of the Yudhishtra’s ashwathama story. there is often a lot of feedback that I get that the company is exporting and I can see the data and hence cash must be real. This a fallacious argument – yes, the company could be exporting and generating cash – BUT, that does not mean that it is generating as much cash as it is showing. You need another data point to figure that out. That’s why it’s called triangulation – you need three independent data points.
Also, your valuation is not a function of sales, profits or EBITDA margins – its a function of free cash flows. That’s something that gets forgotten in pursuit of growth sometimes.
For the record, valeant is a company that has been in the centre of a controversy much like herbalife – no one knows what’s the truth but if you follow the arguments you get to learn a lot.
Trying to put in a case study soon.
Premco Global — Narrow Fabric (A critical component for inner wear) (03-09-2015)
thanks dhiraj
I am not able to undersetand why their margins are a full 1500 bps higher than their next nearest competitor which incidentally also has a plant in the same state, purchases the same RM and exports to hanes too.
Gross margins look comparable but premco’s overheads and asset turns seem far superior. Would you know if they run more shifts, automate a larger number of processes etc.
I am invested but am looking to get this answered.