1
Please refer to important disclosures at the end of this report
1
1
Siyaram Silk Mills Ltd (SSML) manufactures suiting and shirting fabrics, home
furnishing fabrics and garments in addition to dyeing yarn. The brand recognition
and the distribution network will help SSML to improve its scale of operations while
high margin products such as blended fabrics, branded apparels and garment
segment will contribute towards improvement in profitability. The Company believes
in outsourcing its manufacturing requirements which are non-critical. SSML
outsources 40% to 45% of its manufacturing capacity, this model provides the
company the flexibility to adopt to market dynamics and manage its fixed costs
leading to consistent profitability. Further, SSML's had sustained its revenue profile in
fiscal 2017 despite demonetisation and is expected to record healthy growth in the
current fiscal. Despite the debt funded capex, financial condition is expected to
remain healthy on account of expected improvement in net worth backed by accruals.
SSML has a policy of maintaining debt levels at below `450cr. Robust debt protection
helped SSML to mark average interest coverage of approx 5x and debt equity at 0.2x
since 2012 which is expected to be maintained over medium term. It has also
reported healthy revenue and bottom line growth of 13% & 10% CAGR over FY2012-
2017 respectively. The company has a ROCE of 17.45% and at CMP of `556 it is
currently trading at a valuation PE of 26.45x of FY17 TTM earnings. Hence BUY.
BUY
CMP `557
52 Week High / Low
630/234
Avg. Daily Volume
2,889
Textiles
Market Cap (` cr)
2,604
2
BSE Sensex
33,107
Nifty
10,215
Face Value (`)
Reuters Code
SIYR.NS
SIYA:IN
0.8
Vaibhav Agrawal
022 3935 7800 Ext: 6808
[email protected]gelbroking.com
Siyaram Silk Mills Ltd
Others | Textiles
Nov 17, 2017
2
Siyaram Silk Mills Ltd |Textiles
Oct 13, 2017
2
Research Team Tel: 022 - 39357800 E-mail: [email protected] Website: www.angelbroking.com
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Disclosure of Interest Statement Siyaram
1. Financial interest of research analyst or Angel or his Associate or his relative No
2. Ownership of 1% or more of the stock by research analyst or Angel or associates or relatives No
3. Served as an officer, director or employee of the company covered under Research No
4. Broking relationship with company covered under Research No
Ratings (Based on expected returns Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)
over 12 months investment period): Reduce (-5% to -15%) Sell (< -15)