Acknit Industries Ltd
(BSE Code: 530043) (CMP: Rs.121.35) (FV: Rs.10)
Incorporated in 1990, Acknit Industries Ltd (AIL), formerly known as Acknit Knitting Ltd, is an ISO 9001-2008 certified company and amongst the largest manufacturers and exporters of industrial gloves and garments having completed 26 years of operations. It has 3 manufacturing divisions near Kolkata:
1. Seamless Gloves: This division is located in a Special Economic Zone (SEZ), where it manufactures seamless gloves of 100% Cotton, Poly/ Cotton, Nylon, Kevlar, HPPE and other special cut resistant blended yarns, etc., for cut lever 1 to 5. AIL has 3 coating facilities that produce PU Coating, Nitrile Coating and Latex Coated Gloves.
2. Industrial Leather Products: AIL owns a fully integrated set up backed by its own tanning facilities for manufacturing leather gloves and special types using Kevlar/ HPPE/ Glass Yarns. It is one of the fastest growing and leading exporters from India.
3. Industrial Garments: This division manufactures various types of industrial garments made of Cotton, Poly/ Cotton, high visibility fabric with 3m reflective tape, heat resistant, Nomex and T-Shirts of all types. All its units are of international standards with sophisticated machinery and state-of-the-art facilities with adequate production capacity to meet the growing market demand. It is a recognized export house with over 90% of its production is exported to Europe regularly.
With an equity capital of Rs.3.04 crore and reserves of Rs.38.28 crore, AIL’s share book value works out to Rs.136 and P/BV ratio is below 0.89x, which is attractive. The promoters hold 50.33% of the equity capital, which leaves 49.67% stake with the investing public.
For FY18, AIL reported PAT of Rs.2.97 crore on sales of Rs.153.11 crore and an EPS of Rs.10.73. During Q1FY19, it reported 155% higher PAT of Rs.1.2 crore on sales of Rs.34.33 crore and an EPS of Rs.3.95. It paid 15% dividend for FY18.
Exports constitute 90% of its total revenue and hence, AIL will benefit from the depreciating rupee. The stock trades at a P/E of 10x and looks attractive at the current level based on its performance parameters. Investors can buy this stock with a stop loss of Rs.100. On the upper side, it could zoom to Rs.185-200 in the long-term.