
	SHIVA TEXYARN LTD.

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

LISTING	BSE
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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