Thursday, May 6, 2021

Indo Count Industries Ltd (521016) - Good Financial Improvement

Indo Count Industries Ltd (521016)  closes   at 139.40  with  a  Gain  of   +1.10 %   on    06-May-2021  with formation of  a  Small  Red  Candle    on Daily  Price Chart.

About the Company : Indo Count Industries Ltd (ICIL) is one of India’s largest home textile manufacturers. It is engaged in the business of manufacture of bedding, quilts pillows, sleeping bags and preparation and spinning of cotton fiber including blended cotton. The company has focused on some of the world’s finest fashion, institutional and utility bedding and sheets and has built significant presence across the globe. Over the years, the company has successfully carved out a niche for itself and has become a total bedding resource. The company’s annual capacity is 90 million metres.

Sector Update : Positive

Strength :  1. The company is strongly moving towards the B2C and D2C segments through high-quality product offerings across varied price points, building visibility through digital campaigns and leveraging omnichannel and e-commerce distribution. It has increased its focus on brand promotion in the US, Europe, the Middle East and India through 10 active brands. Innovation and technological capabilities along with licensed brands, patents and trademarks will further strengthen brand offerings

2. The management team is set to explore various opportunities to enhance capacities and markets. The total capex will be `200 crore and will be funded by a mix of internal accruals and debt and is expected to be operational in H2 of FY 2022. These investments are expected to increase the revenue by `600 crore over the next two years, post commissioning. The stock is trading at an adjusted PE multiple of 12.82x, which is well below its industry average PE. The total debt to equity ratio is 1.21.


Financials : Indo Count Industries Ltd  has posted Net Sales / Revenue   of 2277.00 Cr & Net Profit of 201.00 Cr in FY2020

Valuations  : The Company is now Trading at X 1.50  of its  valuations ( last 4Quaters earnings considered here) with ~50 % premium .

Margin of Safety (1Yr Bond Yield: Value>1 ) is now  1.0 which  indicates it is now Trading at fully priced level, price.

Whats  best in It   : Home is taking centre-stage with consumer spending increasing due to more time spent at home on account of the new ‘work from home’ and ‘social distancing’ culture. Value-added products of health and hygiene are witnessing unprecedented surge in demand. Factors such as reduction in interest rates, buoyant property market, demand pick-up in suburbs and smaller cities of US are contributing to the demand revival. US holiday retail sales grew 8.3 per cent in 2020 over the same period in 2019. Despite unprecedented challenges, consumers and retailers demonstrated incredible resilience this holiday season.

If We factor its earnings/valuations, its Price arrives at 318 with consideration FY2024 earnings.

Disclaimer : We are / may going to take exposure shortly.

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Data Source NSE Website | Screener.In  | Capital Line Money Control |

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