SHIVA TEXYARN LTD.
 
  

 

SHARETIPSINFO >>Research Reports >> SHIVA TEXYARN LIMITED (08-05-2009)

 

LISTING
CMP
Rs 14.95
52 WEEK HIGH/LOW
Rs 30/Rs 11
FACE VALUE
Rs 10
PE RATIO

6

AVERAGE VOLUME
500
MARKETCAP
Rs 32.5 crore
P/BV
0.36
DIV

15%

DIV YIELD
10%

COMPANY OVERVIEW:
Shiva Texyarn Limited was established in the year 1989. Company is engaged in the manufacturing of high quality yarn that meets international standard.
Company has spindlage of over 37344 and has the production capacity of 15 tons a day.
Raw material is sourced from select cotton fields in the country and also imported from West Africa.
Company has established a strong brand image in the domestic knitting centers like Tiruppur, Calcutta, Kanpur and Mumbai.
Around 70% of the production is exported to countries like Israel, Egypt, Singapore, Malaysia, Korea, Hong Kong, Srilanka, Taiwan and Mauritius market.
 
Product Range:
Ne 30/1 combed knitting in 100% cotton yarn.
Ne 32/1 combed knitting in 100% cotton yarn.
Ne 40/1 combed knitting in 100% cotton yarn.

INVESTMENT RATIONAL:
Depreciating rupee will add to top line and bottom line.
Decline cost of cotton will increase the operating profit margin.
Price is very attractive.
Consistent dividend paying company.
Dividend yield is 10% at current market price.

DIVIDEND TRACK RECORD:


YEAR

DIVIDEND %

2006

15%

2007

15%

2008

15%

AVERAGE DIVIDEND

15%

 
SHAREHOLDING PATTERN:

 

 

NO.OF SHARES

% OF TOTAL

PROMOTER

16185144

 

74.92%

 

INSTITUTION

1400

 

0.01%

 

GENERAL PUBLIC

5417977

 

25.07%

 

GRAND TOTAL

21604521

 

100.00%

 

FINANCIAL:

 

 

31/03/05

31/03/06

31/03/07

31/03/08

TOTAL INCOME

97.59

92.12

101

98.05

EXPENDITURE

-76.42

-70.95

-71.6

-76.55

OPERATING INCOME

21.17

21.17

29.4

21.5

DEPRECIATION

-7.72

-6.97

-7.21

-7.43

PBIT

 

13.45

14.2

22.19

14.07

INTEREST

 

-7.36

-6.91

-6.21

-4.69

PBT

 

6.09

7.29

15.98

9.38

TAX

 

-1.01

0.07

0.1

-4.99

EXTRA ORD ITEM

0

7.79

-0.45

1.88

PAT

 

5.08

15.15

15.63

6.27

CHANGE IN TOTAL INCOME: TOTAL INCOME REMAINED ALMOST FLAT IN PAST 3 YEARS.

CHANGE IN OPERATING INCOME: OPERATING INCOME REMAINED STAGNANT IN PAST 3 YEARS.

CHANGE IN NET PROFIT: CAGR IN NET PROFIT OVER 3 YEAR PERIOD IS 7.26%.

RATIOS:

 

 

31/03/05

31/03/06

31/03/07

31/03/08

EPS

 

2.351852

7.013889

7.236111

2.902778

OPM

 

21.6928

22.98089

29.10891

21.92759

NPM

 

5.205451

16.44594

15.47525

6.394697

INTEREST COVER

1.827446

2.362729

3.573269

3

COMPARISION OF Q3FY2009 WITH Q3FY2008:

 

 

31/12/07

%CHANGE

31/12/08

TOTAL INCOME

21.88

-9.50%

 

19.81

EXPENDITURE

-18.21

 

 

-16.51

OPERATING INCOME

3.67

-10%

 

3.3

DEPRECIATION

-1.87

 

 

-1.86

PBIT

 

1.8

 

 

1.44

INTEREST

 

-0.88

 

 

-0.93

PBT

 

0.92

 

 

0.51

TAX

 

-0.52

 

 

-0.01

PAT

 

0.4

25%

 

0.5

Key Highlights:
Total Income declined by 9.5%.
Operating Income moved down by 10%.
Net Profit surged by 25% due lower base, decline in depreciation and tax.

VALUATION&OUTLOOK:
At cmp of Rs15 the company is trading at 6x to trailing twelve months earning. We value the company at 8x as we are expecting positive impact from depreciating rupee on earning and the declining input cost. The fair market price is Rs22. So appreciation of 40-50% could be seen.
The other major reason is the very good dividend yield at current market price. The dividend yield is 10%. Shiva Texyarn has good track record of paying consistent dividend. This limits the downside in the price of the stock.


CONCLUSION:
As the market has very good run up in the last 2 months. We are consistently working for increasing the wealth of our investor.
When market becomes very aggressive we become defensive in our pick. You can call us true contrarian.
The stock we have analyzed is having very high dividend yield and has consistent dividend paying record. We expect company to pay dividend this time too and at same rate. Stock is meant for patient and risk averse investor.

 

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