ARCHIES LTD.
 
  

 
 

SHARETIPSINFO >>Research Reports >>ARCHIES LTD. (07-01-2009)

 

LISTING
CMP
Rs 49.80
52 WEEK HIGH/LOW
Rs 180/Rs43
FACE VALUE
Rs 10
Market Cap.
Rs38 CRORE
PE Ratio
4.5
P/BV
0.7

 

COMPANY OVERVIEW:
Archies Greetings and Gifts Ltd., was set up in 1979 by Anil Moolchandani and initially it sold song books, posters and leather patches The Company was converted into a Public Limited Company. Subsequently a fresh certificate of incorporation was issued on 7th April, 1995.
The company is currently engaged in the manufacture and trading of wide range of cards, stationery and gift items. The company manufactures about three lakh cards a day.
The company is one of the largest manufacturer and distributor of greeting cards, posters, soft toys, gift items, cassettes /CDs and stationery items. It also sells cards with Gibson, Paper Rose and Paper Magic labels owing to its licensing partnerships with Gibson Greetings (USA), American Greetings Corp. (USA) and Portal Publications (USA) respectively. Archies is India’s number one greeting & gifts retailer. Over the years, Archies has emerged as strong brand and key destination for consumer looking for greeting & gift items.


STORE STRUCTURE:
A typical Archies store is 1000 to 3000 sq ft in area.


DISTRIBUTION NETWORK:
Archies has about 2000 outlets and franchisees, called Archies Galleries, spread across 120 cities and 6 countries. It has tie-ups and licensing arrangements for popular merchandising characters like Dennis the Menace and Disney characters. It has got arrangements with Paramount Cards. Inc, Anne Geddes, and American Greetings, for greeting card design and name use.

GROWTH STARTEGY: 
Targeting malls and other prime retail space for opening new store.
Planning to increase the ‘Stupid Cupid’ jewellery store in India.
Company is planning to tap Rs 1000 Crore corporate gifting sector in India.
Company is planning to tie-up with local grocery or chemist shops to sell greeting cards and gifts.


MARKET SHARE:
Archies enjoys 50% share of the organized greeting cards market.


SHAREHOLDING PATTERN:

 

 

NO.OF SHARES

% OF TOTAL

PROMOTERS

4212500

 

62.35%

 

INSTITUTION

15500

 

0.23%

 

GENERAL PUBLIC

2528000

 

37.42%

 

GRAND TOTAL

6756000

 

100%

 

FINANCIAL:

 

 

31/03/05

31/03/06

31/03/07

31/03/08

TOTAL INCOME

74.75

85.58

106.03

119.39

EXPENDITURE

-63.04

-72.69

-90.92

-102.67

OPERATING INCOME

11.71

12.89

15.11

16.72

DEPRECIATION

-1.62

-2

-2.41

-2.73

PBIT

 

10.09

10.89

12.7

13.99

INTEREST

 

-0.43

-0.47

-0.83

-1.28

PBT

 

9.66

10.42

11.87

12.71

TAX

 

-3.62

-3.7

-4.05

-4.52

PAT

 

6.04

6.72

7.82

8.19

CHANGE IN TOTAL INCOME: CAGR IN TOTAL INCOME IS 16.9%.


CHANGE IN OPERATING PROFIT: CAGR IN OPERATING PROFIT IS 12.6%.


CHANGE IN NET PROFIT:  CAGR IN NET PROFIT IS 10.7%.

RATIO:

 

 

31/03/05

31/03/06

31/03/07

31/03/08

 

EPS

8.940201

9.946714

11.5749

12.12256

 

OPM

15.66555

15.06193

14.25068

14.00452

 

NPM

8.080268

7.852302

7.375271

6.859871

INTEREST COVERAGE

23.46512

23.17021

15.3012

10.92969

VALUATION AND OUTLOOK:
At CMP of Rs55 company is trading at 4.5X past years earning and 0.7X to the book value per share. The share price appears to be undervalued considering the brand equity enjoyed by the company and also the retail initiative the management has planned for the next 2 years.


CONCLUSION:
Investor with medium term investment horizon can start accumulating the stock at this level. The downside risk in the stock is limited.

 

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