Nandan Exim (BSE: 532641 NSE: NANDAN ISIN: INE875G01022)
Nandan Exim is a manufacturer and exporter of Denim of superiour quality. The Company belongs to the famous Chiripal Group of Ahmedabad.
Pursuing its ambitious plans of expansion, Chiripal Group laid foundations of an ultra-modern 100% cotton & blended bottomwear fabrics and the most modern & versatile denim manufacturing project called Nandan Exim Limited. Nandan Exim Limited is housed with one of the most sophisticated weaving plants and other facilities to manufacture superior quality gray cotton fabrics, khakhis and denim. The products manufactured by Nandan Exim Limited are primarily intended for sufficing the needs of the leading customers of the country and exports to the developed markets of the West and South East Asia, Europe & America.The plant manufactures 100% cotton piece dyed fabric, blended cotton fabric and denim. We keep on developing products in tune with the fashion and market trends. The company manufactures fabrics of different weaves, dyes, combination of yarns, weights. These products find applications in various outfits and garments. The range of products include denim, twills, stretch, bull denim, broken twills.
The products manufactured at Nandan Exim Limited are primarily marketed in International as well as Domestic market. Within a short span of time, the company has been able to supply its products to renowned national players as well as exporters. The marketing efforts are concentrated towards having a presence among various customer groups in the international arena like the garment manufacturers, importers, distributors, etc. and the ready made garment exporters, renowned brands, distributors & stockists in the national market.
Financials
The company has a share capital of Rs.30.36 crores, comprising of 30.36 crore equity shares of Rs.1.00 each. The promoter group are holding 48.65% of the shares and of the remaining held with public, 18% are held by Corporates. So, in effect, 32% of the shares are with other public.
The net profit for the quarter ended March 2007 took a dip to 1.1 Crores but has shown an increase. For June Qtr. it was 2.3 Crores which was maintained in Sept. Qtr. Going forward, the company may be able to increase the profits on a steady basis, ending up the year 2007-08 at a profit of about 11-12 crores on a conservative basis.
This would translate into roughly 0.40 eps. If the company trades at a forward earning of 15 times, the share should command a valuation of Rs.6.00 presently, whereas the share is available at 3.50 to 4 levels. In our opinion, the share is available very cheap.
The company has substantial expansion plans and proposes to issue 15 crore shares on rights basis at a premium of Rs.2.00 per share. The draft was filed with SEBI and they have since got the approval from SEBI. The company scheduled a Board Meeting on 26.10.2007 for working out the modalities of rights issue viz. Record Date, Lead Managers etc. The outcome will be made known shortly.
Once the rights issue is successfully put through, the company will have a equity capital of about Rs.45 Crores and reserves of about Rs.70 crores (presently 40 crores + share premium amount of Rs.30 Crores).
Presently the textile manufacturing and exporting companies are reeling under the rising rupee problem. Recently, the Hon’ble Finance Minister held a meeting with various exporters’ organizations wherein the problems were discussed at length. Commerce Ministry is also fully seized of the problems. Sooner or later, Government will bring out some package etc. to help the exporters. This will help Nandan Exim too.
Considering all this, we give a clear buy call on Nandan Exim at the current price of Rs.3.80-4.00 with a one year target of Rs.6.00. In 2-3 years, you may see a price of about 8.00 to 10.00.
The anticipated earnings, EPS and PE are not commented upon, as the picture may vary consequent upon the rights issue of shares. This will presently a slightly distorted picture. A good thing is that rights issue will come about in a premium which will shore up the book value.
THEREFORE, NANDAN EXIM CAN BE ENTERED AT THE PRESENT LEVELS FOR A CLEAR HOLD OF ONE YEAR.
1 comment:
nice analysis sir, i am also holding this. i am toally agree.. best thing is..there is very little risk of downside in short term which may panic some short term trader....but for long term this is definately a value pick.
..the intelligent investor...
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