Company Overview. Industry Overview. Financial Performance

Transcription

1 Jan/15 Feb/15 Mar/15 Apr/15 May/15 Jun/15 Jul/15 Aug/15 Sep/15 Oct/15 Nov/15 Dec/15 Trident Limited CMP: January 13, 2016 Stock Details BSE code BSE ID TRIDENT Face value ( ) 10 No of shares (m) 510 Market cap ( m) week H/L 62.00/ days avg. daily vol (No) 3,32,594 Free float ( m) Dividend yield FY15 (%) 2% Stock performance (%) Absolute Rel. to Sensex 1M 3M 12M 0.2% 17.0% 113.0% 1.0% 24.4% 122.3% Shareholding Pattern* (%) Promoters FIIs DIIs Others 66.58% 0.69% 1.60% 31.13% *As of September 2015 Relative Chart Trident Sensex Company Overview Trident Limited is the flagship company of the Punjab-based conglomerate Trident Group; it was incorporated as Abhishek Industries Ltd in April Trident Limited is involved in the business of terry towel, yarn and wheat straw based paper manufacturer. Segments of company include textiles, paper and chemic and others. The Company has manufacturing facilities in Punjab and Madhya Pradesh. Industry Overview India, the world s second largest producer of textiles and garments, accounts for 63% of the market share of textiles and garments. Additionally, India accounts for about 14% of the world s production of textile fibres and yarns (largest producer of jute, second largest producer of silk and cotton; and thirdlargest of cellulosic fibre). The textile industry is projected to grow at a CAGR of 9% to USD 141 billion by Financial Performance Trident reported a revenue 37,553.3 million in FY 15, down by 2.9% YoY. The company reported a net profit of 1,178.6 million for the fiscal year For the second quarter of FY 16 company reported a top line of 9,609.9 million, down -0.1% YoY. Bottom line was at million ,000 29,000 28,000 27,000 26,000 25,000 24,000 23,000 22,000 Table1: Key Financials (Y/e March) Q2 15 Q2 16 Sales ( m) 33, , , , ,609.9 YoY Growth (%) 22.1% 16.0% -2.9% -3.9% -0.1% EBITDA ( m) EBITDA Margin 50.8% 39.5% 38.3% 16.2% 18.6% Source: Bloomberg PAT ( m) , , EPS ( ) YoY Growth (%) 201.3% % -79.9% 112.8% Source: Company, Karvy Investment Advisory 1

2 Background and Business Description Trident Limited is the flagship company of the Punjab-based conglomerate Trident Group; it was incorporated as Abhishek Industries Ltd in April Trident Limited is involved in the business of terry towel, yarn and wheat straw based paper manufacturer. Segments of company include textiles, paper and chemic and others. The Company has manufacturing facilities in Punjab and Madhya Pradesh. The textiles segment of the company includes yarn, towel, dyed yarn manufacturing, including utility service. The paper and chemical segment includes paper and sulfuric acid, including utility service. The others segment includes sale of software and related services. The towel manufacturing facility of the company is located at Budni, Madhya Pradesh. Its product portfolio includes towels, bed-linen and yarn. It also offers solid bath ensembles, beach towels and bath mats, among others, printed bed-linen, organic bed-linen and air rich bed-linen, melange, core spun yarn, slub yarn and core spun slub yarn, among others. It also offers writing and printing paper, branded copier paper, Maplitho and Bible and offset printing paper. Key Strengths Segment wise revenue contribution: Textile Paper and chemicals FY14 78% 22% FY15 78% 22% As the economy of India is expected to grow with reasonable pace, each and every Sector of the Industry will be growing. It will also have, the immense opportunities with the growing Economy. Well established brand name Risks & Concerns Foreign currency risk Geo-economic global cycle risk Input sourcing risk Competition, mainly from China Board of Directors Table 2: Composition of Board Name Pradipkumar Pacheriwala Heeradevi Pradip Kumar Pacheriwala Ashok Kumar Ramprakash Agarwal Source: Company Relation with Company Director Director Director 2

3 Industry Overview India, the world s second largest producer of textiles and garments, accounts for 63% of the market share of textiles and garments. Additionally, India accounts for about 14% of the world s production of textile fibres and yarns (largest producer of jute, second largest producer of silk and cotton; and thirdlargest of cellulosic fibre). The textile industry is projected to grow at a CAGR of 9% to USD 141 billion by India s home textiles market is projected to grow at a CAGR of 10.5% to USD 9.9 billion in 2017 on account of increased exports growth at a CAGR of 8.4% to USD 6.0 billion in Bed and bath linen together constitute about 67% of the home textile industry. The United States and the Europe together account for two-third of India s textile exports, which is projected to reach USD 38 billion by The textile industry contributes around 14% to the IIP, 5% to the country s GDP, 27% to the Company s forex inflows and about 13% to the country s total exports earnings. Further, it accounts for 21% of the total employment generated in the economy, providing direct employment to over 45 million people. Indirect employment including the manpower engaged in agro-based raw material production like cotton and related trade and handling employs around another 60 million. It contributes to around 8% of the total excise revenue collection. The textile sector accounts for about 24% of the world s spindle capacity and 8% of global rotor capacity. Indian home textile industry break up 15% 8% 10% 49% Bed Linens Curtains bath Linens Blankets Others 18% Peer group analysis Company CMP ( ) Mcap ( m) Rev ( m) OPM (%) EPS ( ) PE (x) Trident Ltd , % x Alok Industries Ltd ,21, % x Shekhawati Poly-Yarn Ltd % x Source: BSE 3

4 Financial Analysis Trident reported revenue of 37,553.3 million for FY 15, down 2.9% YoY from million in FY14. Net profit for the company was at 1,178.6 million in FY15, down -60.4% YoY from 1,940.2 million in FY14. EPS was at 2.5 in FY15 compare to 6.2 in FY14. Return on equity dropped to 8% in FY 15 from 21% a year ago. Interest coverage ratio was at comfortable level in FY15 with ratio at 5.4x. Year end March Income statement ( million) Revenue % growth 22.1% 16.0% -2.9% EBITDA % EBITDA margin 51% 40% 38% Depreciation and Amortization EBIT Interest 2, , ,059.6 PBT , ,679.6 Tax Net profit , ,178.6 % growth net profit 201.3% % Balance sheet ( million) Shareholder fund 7, , ,553.5 Non Current liabilities 10, , ,608.2 Current liabilities 15, , ,908.3 Non Current assets 21, , ,697.8 Current assets 10, , ,202.1 Cash & cash equivalent Cash flow statement Cash flow operations Cash flow from investing (1,000.2) Cash flow from financing (2,853.0) (5,740.1) (4,320.9) Per share data EPS ( ) CEPS ( ) DPS ( ) NA NA NA BVPS ( ) Financial Ratios % ROE 7% 21% 8% ROCE 56.3% 69.8% 37.0% Debt/Equity Interest coverage ratio Current ratio Cash ratio Source: Company, Karvy Investment Advisory 4

5 Financial Snapshot Revenue growth (%) EBITDA margin (%) 40, , , , , , % % 1 5.0% -5.0% 18, , , , , , Revenue ( m) % growth EBITDA ( m) % EBITDA margin 2, , , , Net Profit Margin (%) Net Profit ( m) % net profit margin 6.0% 4.0% 2.0% BVPS & EPS Book value per share ( ) EPS diluted ( ) Liquidity ratios Profitability ratios Current ratio Cash ratio ROE ROCE Source: Company data and Karvy Investment Advisory 5

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