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Ambika Cotton Mills Ltd. Stock Analysis

Small Cap
Evaluated by 1075 users | BSE: 531978 | NSE: AMBIKCO |
Textile - Spinning
Ambika Cotton Mills is a manufacturer of cotton yarn. It was incorporated as a private limited company on October 6, 1988 and got converted into a public limited company on September 5, 1994. The company has four manufacturing units in Dindigul, Tamil Nadu. In FY07, the company set up its...

Analysis of Financial Track Record

Data adjusted to bonus, split, extra-ordinary income, rights issue and change in financial year end
Financial track record gives insight into the company's performance on key parameters over the past ten years. MoneyWorks4me’s proprietary colour codes make it easy for retail investors to gauge the company’s past performance.
Ambika Cotton Mills Ltd. has performed well in some of the past ten years indicating its past ten year financial track record is somewhat good
Value Creation
 Mar'11Mar'12Mar'13Mar'14Mar'15Mar'16Mar'17Mar'18Mar'19Mar'20
Return on Capital Employed 13.22%11.76%14.31%18.93%15.73%13.4%15.9%15.37%14.33%10.96%
Growth Parameters
Growth Parameters Colour Code Guide
Net Sales (Rs. Cr.) 327389398477495492529584656623
Y-o-Y Gr. Rt.-19.2%2.1%19.9%3.9%-0.6%7.4%10.6%12.2%-5%
Adjusted EPS (Rs.) 72.2454.5257.5593.2888.3774.9796.94105.92115.7296.91
Y-o-Y Gr. Rt.--24.5%5.6%62.1%-5.3%-15.2%29.3%9.3%9.3%-16.3%
Book Value per Share (Rs.) 298.59333.43375.13442.44512.7570.29654.49749829.03883.96
Adjusted Net Profit 42.43233.854.851.944.155.560.666.355.5
Net Op. Cash Flow (Rs. Cr.) 72.713587.437.843676716.310.549.5
Debt to Cash Flow from Ops 3.581.121.072.651.460.290.111.758.451.4
Standalone financials take only the parent company into account while consolidated financials take into account financials of the parent company as well as of all its subsidiaries. In most companies consolidated financials should be used for analysis.
Ambika Cotton Mills Ltd. should be analysed on a Standalone basis
CAGR
CAGR Colour Code Guide
  9 yrs 5 yrs 3 yrs 1 yr
Net Sales 7.4%4.7%5.6%-5%
Adjusted EPS 3.3%1.9%-0-16.3%
Book Value per Share 12.811.510.56.6
Share Price 15.9% -4.2% -18.6% -22.2%
Key Financial Parameter
Performance Ratio Colour Code Guide
 Mar'11Mar'12Mar'13Mar'14Mar'15Mar'16Mar'17Mar'18Mar'19Mar'20
Return on Equity (%) 27.2317.2516.2422.8218.5113.8515.6415.0914.6711.31
Operating Profit Margin (%) 30.3123.1122.9323.7920.3919.0319.8519.319.6517.73
Net Profit Margin (%) 12.998.238.511.4910.488.9510.510.3810.18.9
Debt to Equity 1.480.780.430.390.210.060.020.070.190.14
Working Capital Days 220158123119134136139171188217
Cash Conversion Cycle 1771188184939190100128172
Entity Percentage Holding
Promoters 50.17%
Institutions 3.74%
Non-Institutions 46.08%
Pledged *0.000.000.000.000.000.000.000.000.000.00
* Pledged shares as % of Promoter's holding (%)

MoneyWorks4Me analysed the past 10-year performance of Ambika Cotton Mills Ltd. and arrived at the following conclusion:

Past 10 year's financial track record indicates that Ambika Cotton Mills Ltd. is a average quality company. However, for specific investment actions please connect with your investment advisor.

The 5-year analysis of Ambika Cotton Mills Ltd.'s performance infers:

Ambika Cotton Mills Ltd. earnings have grown by 1.9%, whereas share price has depreciated -4.2% CAGR over the past five years, indicating the company's share price is likely undervalued. However, for specific investment actions please connect with your investment advisor.

We analysed the performance of Ambika Cotton Mills Ltd. share prices over the last 10 years. Here is what we found out:

Ambika Cotton Mills Ltd. share price has depreciated 10.3% annually over the past ten years.

Ambika Cotton Mills is a manufacturer of cotton yarn. It was incorporated as a private limited company on October 6, 1988 and got converted into a public limited company on September 5, 1994.

The company has four manufacturing units in Dindigul, Tamil Nadu. In FY07, the company set up its fourth unit with an installed capacity of 43,200 spindles including doubling of yarn for 9,600 spindles along with back processing machinery in a separate plant at an estimated cost of Rs 1,406.3

Ambika Cotton Mills is a manufacturer of cotton yarn. It was incorporated as a private limited company on October 6, 1988 and got converted into a public limited company on September 5, 1994.

The company has four manufacturing units in Dindigul, Tamil Nadu. In FY07, the company set up its fourth unit with an installed capacity of 43,200 spindles including doubling of yarn for 9,600 spindles along with back processing machinery in a separate plant at an estimated cost of Rs 1,406.3 million. The company has increased its compact facility in Unit II by 6,720 spindles at an estimated cost of Rs 33.1 million. The total production capacity would increase to 110,000 spindles in phases starting with operations at unit IV from June 2007. Of this, the compact facility would constitute 83,000 spindles representing 75.45% of the total installed capacity. The additional doubling of yarn facility would provide the required flexibility in product range. The installed wind power capacity of the company stands at 13.8 MW with the setting up of 800 KW capacity in FY07.

The company’s clientele consists of well-reputed manufacturers engaged in manufacturing shirts/knitwear products, both in the domestic and international markets. Approximately 45% of its products are exported directly to Taiwan, Hong Kong, Turkey, China, Korea, Singapore, Israel and Egypt and through merchant exporters to Peru, Italy, and Germany among other countries.

Milestones:

1988 - The company was originally incorporated as Ambika Cotton Mills Private Ltd as a private limited company on October 6, in the state of Tamil Nadu, and subsequently converted into a public limited company on September 5, 1994. The company was promoted by P K Ganeshwar, Rathanasamy and P V Chandran, for setting up a cotton spinning mill. The mill located in Dindigul, Tamil Nadu, commenced operations in January 1990. The project, with an initial capacity of 6048 spindles was part-financed by a term loan from State Bank of India. The company carried out an expansion scheme to add certain back-process machinery in February 1991, which was also funded by the State Bank of India. 

1992 - Ambika Cotton Mills began implementation of an expansion project to double its spindlage to 12096 spindles by the addition of 6048 spindles. This project was financed by means of a medium-term loan from State Bank of India and the State Bank of Mysore on a consortium basis and through a Deferred Payment Guarantee limit from IDBI. The project was successfully completed in March 1993.  

1994 - The company added Comber machines to its production line and humidification system. This was funded by SIPCOT through a term loan of Rs 90.86 lakh. The company currently manufactures combed and carded cotton yarn of counts ranging from 30's to 40's. These are used by hosiery manufacturers to convert the same into fabric or garments. 

2000 - The company has chalked out a Rs 14-crore expansion-cum-modernisation programme.

Puchho Befikar
SEBI Registered: Investment Adviser - INA000013323
Research Analyst - INH000000719

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