Ack­nit In­dus­tries Ltd

(BSE Code: 530043) (CMP: Rs.131.70) (FV: Rs.10)

Money Times - - Techno Funda - By Nayan Pa­tel

We had rec­om­mended this stock at Rs.121.35 on 8 Oc­to­ber 2018, where-af­ter it zoomed to Rs.174 in a very short span of time. The stock has fallen sharply in line with the broad mar­ket cor­rec­tion and is once again avail­able be­low its fair value. More­over, it has posted ex­cel­lent Q2 re­sults. 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.40.38 crore, AIL’s share book value works out to Rs.136 and P/BV ra­tio stands at 0.9, which is at­trac­tive. The pro­mot­ers hold 50.33% of the eq­uity cap­i­tal, which leaves 49.67% stake with the in­vest­ing pub­lic.

For Q2FY19, AIL posted 67% higher PAT of Rs.0.91 crore on higher sales of Rs.41.68 crore and an EPS of

Rs.3. For H1FY19, it posted 107% higher PAT of Rs.2.11 crore on sales of Rs.77.88 crore and an EPS of Rs.7. It paid 15% div­i­dend for FY18. Cur­rently, the stock trades at a P/E of 10x and looks at­trac­tive based on its per­for­mance pa­ram­e­ters. In­vestors can buy this stock with a stop loss of Rs.110.

On the up­per side, it could zoom to Rs.185-200 in the long term.

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.