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Kitex Garments Ltd. Stock Analysis

Small Cap
Evaluated by 1935 users | BSE: 521248 | NSE: KITEX |
Textile
Kitex Garments incorporated in 1992, it commenced its production in 1996, after setting up its world-class facility on a 105 acre landscape at Kochi. It was primarily conceived with a domestic focus, intending to make the most of the strong brand power the group enjoyed in the state of Kerala....

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.
Kitex Garments Ltd. has not performed well majority of the past ten years indicating its past ten year financial track record is not good
Value Creation
 Mar'11Mar'12Mar'13Mar'14Mar'15Mar'16Mar'17Mar'18Mar'19Mar'20
Return on Capital Employed 19.16%20.49%17.41%21.83%28.96%24.82%21.71%15.01%12.03%12.34%
Growth Parameters
Growth Parameters Colour Code Guide
Net Sales (Rs. Cr.) 256312317442511546546557607739
Y-o-Y Gr. Rt.-21.8%1.6%39.5%15.6%6.8%0%2.1%8.9%21.8%
Adjusted EPS (Rs.) 2.863.894.157.4313.7515.1414.410.5410.512.74
Y-o-Y Gr. Rt.-36%6.7%79%85.1%10.1%-4.9%-26.8%-0.4%21.3%
Book Value per Share (Rs.) 11.0714.6518.426.1939.6855.2568.5377.6388.94101.53
Adjusted Net Profit 1925.927.649.491.410195.770.169.884.7
Net Op. Cash Flow (Rs. Cr.) -15.662.624.411512813544.728.69.758.9
Debt to Cash Flow from Ops -6.931.624.151.161.260.810.190.289.291.63
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.
Kitex Garments Ltd. should be analysed on a Standalone basis
CAGR
CAGR Colour Code Guide
  9 yrs 5 yrs 3 yrs 1 yr
Net Sales 12.5%7.7%10.6%21.8%
Adjusted EPS 18.1%-1.5%-4%21.3%
Book Value per Share 27.920.71414.2
Share Price 13.7% -29.4% -22.2% 19.2%
Key Financial Parameter
Performance Ratio Colour Code Guide
 Mar'11Mar'12Mar'13Mar'14Mar'15Mar'16Mar'17Mar'18Mar'19Mar'20
Return on Equity (%) 29.4830.2825.0933.3441.7431.9123.2614.4212.6113.37
Operating Profit Margin (%) 18.6619.0419.4921.933.5134.5932.0324.0922.918.19
Net Profit Margin (%) 7.428.38.711.1817.8918.4517.5412.5811.5111.46
Debt to Equity 1.471.040.830.770.610.30.020.020.150.14
Working Capital Days 1251331391049398127170246281
Cash Conversion Cycle 4063684126315288120140
Entity Percentage Holding
Promoters 55.57%
Institutions 0.10%
Non-Institutions 44.33%
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 Kitex Garments Ltd. and arrived at the following conclusion:

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

The 5-year analysis of Kitex Garments Ltd.'s performance infers:

Kitex Garments Ltd. earnings have declined by -1.5%, whereas share price has depreciated -29.4% 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 Kitex Garments Ltd. share prices over the last 10 years. Here is what we found out:

Kitex Garments Ltd. share price has depreciated 18.3% annually over the past ten years.

Kitex Garments incorporated in 1992, it commenced its production in 1996, after setting up its world-class facility on a 105 acre landscape at Kochi. It was primarily conceived with a domestic focus, intending to make the most of the strong brand power the group enjoyed in the state of Kerala. It also tied up with a leading Italian company for manufacture & sale of undergarments positioned at the premium segment.

However, it experienced that the highly up market innerwear products

Kitex Garments incorporated in 1992, it commenced its production in 1996, after setting up its world-class facility on a 105 acre landscape at Kochi. It was primarily conceived with a domestic focus, intending to make the most of the strong brand power the group enjoyed in the state of Kerala. It also tied up with a leading Italian company for manufacture & sale of undergarments positioned at the premium segment.

However, it experienced that the highly up market innerwear products would not generate volumes enough for the huge facility being set-up. Plus the high credit period & even bad debts led the company to naturally shift its focus to the exports markets.

KGL has had a key focus on the US markets, where the customers generally demand for bulk deliveries, much in contrast to the relatively smaller orders by the Europeon buyers. This time round, KGL experienced a little less than expected growth for a few years as most buyer representatives sourced their entire requirement from the textile hub of Tirupur (5 hrs drive from Kochi, with no flight connections).

However, with the coming up of an international airport at Kochi and having been satisfied with the production at its top-class facilities, Kitex Garments has no looking back. Further with no quotas on textiles, it is now enabled to scale up its operations and is poised to evolve as a notable player in the Indian textile space.

Business Area of Company 

The company manufactures all kinds of garments for exports. Infant wear dominates with over 90% share in production; Capacity (infant wear) increased to 200,000 pcs per day; Vertical integration through fabric & processing plant.

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

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