Ack­nit In­dus­tries Ltd

Money Times - - Bull’s Eye -

(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.

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