1|Page

Surbhi Lohia – surbhi@dynamiclevels.com

Vikash Kandoi – vikash@dynamiclevels.com Page | 1
Himatsingka Seide Ltd - Reap the reward of CAPEX

 Company Overview……………………………………………………………3

 Company’s Milestone and Stock price…………………….…….……..4

 Product Overview……………………………………………………….……..5

 Retail and Distribution…………………………………………….……..…8

 Textile Outlook Industry……………………………....………….…..….10

 Company Financials………………………………………………….……..12

 Peer Comparison……………………….......…………….………….……..17

 Company’s Future Outlook…………………………………….…….…..20

 Capex Plan of the Company…………………………………………...….21

 Investment Rationale…………………………………….…………...….…22

Page 2 Source: Company, www.dynamiclevels.com

Company’s Overview COMPANY PROFILE OF HIMATSINGKA,
NSE, INDIA
Date of Incorporation 23-Jan-1985
The Himatsingka Group focuses on the manufacturing, retailing and
Date of Listing 10-Jan-1995
distribution of Home Textile products.
Management
The Group operates with the largest capacities in the world for Name Designation
producing upholstery fabrics, drapery fabrics and bed linen Dilip J Thakkar Chairman
products.
K R S Murthy Director
The Company has its wings across Asia, Europe and North Berjis M Desai Director
America. Its retail and wholesale distribution divisions carry some of
Rajiv Khaitan Director
the most prestigious brands in the Home Textile space.
Aditya Himatsingka Executive Director
Himatsingka Group, founded in 1985, focuses on design and Shrikant Himatsingka Executive Director
product development, best-in-class manufacturing processes and
efficient supply chain capabilities. The company ensures the Jayshree Poddar Executive Director
highest level of customer service in the industry. It has a team of D K Himatsingka Managing Director
over 5000 people. The Group continues to expand its reach and A K Himatsingka Vice Chairman
build capacities in the Home Textile space.
Registered Office Address
Himatsingka Group is integrated from manufacturing in India to No. 10/24 Kumara Krupa Road,High
retail and distribution networks across North America, Europe and Grounds (Near Sindhi High
School),560001,Bengaluru,Karnataka,India
Asia. The Company‟s retail and distribution networks cater to over
Website
8000 points of sale including 200 shop-in-shops of its licensed
http://www.himatsingka.com
brands in major departmental stores and 25 exclusive retail stores.
An integrated model and supply chain expertise enables the Group
to service retail and distribution networks across 22 countries.

North America Geographic

Sales %
Segments in INR
In North & South America, company operates through (M) Revenue
(2015)
1. DWI Holdings USA 1682.50 86.70%
2. Divatex. Europe 150.40 7.75%
DWI Holdings is the licensee of brands such as Others 42.60 2.19%
Reconciliation 36.60 1.89%
1. Calvin Klein Home
2. Barbara Barry India 28.50 1.47%
Total Sales 1940.60 100%
Divatex is the licensee of Esprit and caters to Private Label
programs of major retailers.

Europe
In Europe, the Group operates through Guiseppe Bellora S.P.A. Geographic
Bellora is amongst the most recognized Italian luxury-bedding
brand and has broad distribution reach across Italy and other parts Segment
of Western Europe. USA
Asia
Europe
In Asia, the Group operates through Himatsingka Wovens. This
division controls the „Atmosphere‟ brand and has retail networks in
India, the Middle East and South East Asia. Others

Page 3 Source: Company, www.dynamiclevels.com

 Company’s Milestone & Stock Price Himatsingka Share Price
1985: Himatsinka Seide Ltd incorporated
Performance
SYMBOL HIMATSINGKA
1986: Launched IPO
Current Price 209.50
1998: Expansion of weaving capacity - Stock Price ranged
between Rs. 11 to 16 Face Value 5
2003: India's first luxury home furnishing brand 'Atmosphere' is 52 Week High 248.40 (06-Jan-16)
launched- Stock Price ranged between Rs. 23 to 84.15.
52 Week Low 74.05 (09-Jun-15)
2005: Construction of the vertically integrated Greenfield Bed Linen
manufacturing facility at the Hassan SEZ, Karnataka, India Life Time high) 337.50 (30-Aug-05)
commences. Stock Price ranged between Rs. 96 to 169.
Life Time low 18.00 (06-Mar-09)
2007: Acquisition of Giuseppe Bellora S.p.A (Italy) bed linen brands
in Europe. Acquisition of Divatex Home Fashions, Inc., the ADM (Avg Movt) 9.87
acquisition of DWI Holdings, Inc., a leading branded Home Textile
player in the North American market and a licensee of the Calvin Average Volume 216994
Klein Home and Barbara Barry brands. Stock Price fell from Rs.
150 to 95. 1 Month Return 12.12%

2008: Retail supply chain center at Doddaballapur, Karnataka, P/E Ratio (x) 13.93
India goes on stream. 'Atmosphere' launches its first international
stores in Dubai and Singapore. Stock Price fell from Rs. 135 to Book Value 81.75
24.
Market Cap 2090.25 (Cr)
Stock is trading at Rs. 209.50 made 52 week high of Rs. 248.40
th th
on 6 Jan 2016 and 52 week low of Rs. 74.05 on 9 Jun 2015. Promoter pledged Nil
th
Life time high for the stock is at Rs. 337.50 on 30 Aug 2005 and
th
life time low of Rs. 18.00 on 6 Mar 2009.
Stock has surged 152.58% in 1 year having a beta with index of
1.65.

Red – Himatsingka Yellow – Nifty Source: Bloomberg

Page 4 Source: Company, www.dynamiclevels.com

Product Overview
Bed Linen Bed Linen
Himatsingka is one of the largest producers of bed linen products in
the world. Its vertically integrated manufacturing facility is equipped
with the latest warping, sizing, weaving, continuous processing,
yarn dyeing and sewing facilities.
Plant Located at
The Company has a capability to offer both piece dyed and yarn
dyed products along with embroidery and quilting. Himatsingka Karnataka
holds a diverse position in this area.
Plant Location: Hassan SEZ, Karnataka, India
No. of employees: 4000 With 4000
Weaving Capacity: 21 million metres per annum. Employees
Processing Capacity: 23 million metres per annum.
Cut & Sew Capacity: 3.8 million sheet sets per annum.
Capacity
Products Offered: Complete bed ensembles including
21
 Sheet Sets,
Million
 Pillowcases & Decorative Pillows
Mtrs
 Duvets

 Comforters

 Bed Skirts

 Shams and Dust Ruffles Products

The facility also offers a wide range of quilted products. a. Sheet Sets
Weaves: This facility offers a wide range of weaves from basic b. Pillowcase
Percale and Sateen to more complex hybrid weaves such as
c. Duvets
 Dobbies
d. Comforters
 Twills
e. Decorative Pillow
 Matelesse and Jacquards.
f. Bedskrits
Finishing: Products are offered with a variety of handle and
finishes such as g. Shams
 Soft h. Dust Ruffles
 Wrinkle-free

 Antibacterial

 Water Repellent and Stain Resistant

Page 5 Source: Company, www.dynamiclevels.com

Cut & Sew: The cut & sew facility is equipped with automatic
cutting machines and has the largest installation of ETON conveyer
systems for bedding products in India. Drapery &
Design Capabilities: The Group's design studios offers a variety of
fabric and hem treatments along with embellishments like
Upholstery
embroidery of logos, insignias and crystals. The design team
continuously strives to create fresh, functional and appealing
bedding components. Embroidery treatments add flavor to the
fashion bedding products.
Fibre Specifications: Finest cotton yarns such as Plant Located
 Supima

 Egyptian
at Karnataka
 Seasell blends and Indian cotton

Drapery & Upholstery 700

The Drapery and Upholstery fabrics manufacturing facility is one of
the largest of its kind in India and in the world. The operation is
Employees
vertically integrated from pre-weaving yarn preparation to post-
weaving finishing processes.
The facility was built with a vision to produce Drapery and
Upholstery products that epitomize cutting edge design and quality.
Over the years, products have become most recognized brands in
the world.
Capacity
Plant Location: Doddaballapur, Karnataka, India 2.2
No. of employees: 700

Capacity: The facility has an installed capacity of 2.2 million metres

million
per annum.
meters
Products Offered: Fabrics for Drapery and Upholstery
applications. p.a
Product Type: The facility manufactures a wide range of fabrics
from ultra lightweight sheers to heavy velvets in a variety of weaves
from simple Dobbies to very complex Jacquards. This facility is
equipped to weave fabrics on high-density warps with a repeat size
of up to 140 cms.
Design Capabilities: The Group's design studios in New York, Product:
Milan and Bangalore have over the years created an archive of
over 25000 products. The teams add 1500 new products every Complex
year. Customers have the flexibility to choose from the existing
product archives or provide customized requirements.
Jacqards

Page 6 Source: Company, www.dynamiclevels.com

Processing & Finishing:

 Abrasion Resistance

 Knit Backing Silk Blended

 Stain Resistant Yarns
 Flame Retardancy
Fibre Specifications: Fibres like Silk, Cotton, Linen, Acrylic, Wool,
Polyester and Viscose are used to produce an assortment of fine
Drapery and Upholstery fabrics suitable for both residential and
institutional applications. Plant Located at
Quality Certifications: This facility is certified for ISO 9002 and Karnataka
has recently acquired certification for ISO 14001 which ensures that
the production of fabrics has no harmful effect on the environment.

Located at
Silk & Blended Yarn
Karnataka
The Spun Silk facility at Himatsingka manufactures 100% Spun Silk
yarn as well as Silk yarns blended with Wool, Tussar & Linen. This
division predominantly caters to the requirements of the Drapery
and Upholstery manufacturing division and also selectively caters
to clientele who require high quality Spun Silk and blended yarns.
Capacity 200 MT
Plant Location: Doddaballapur, Karnataka, India
p.a
No. of employees: 80
Capacity: The facility has an installed capacity of 200 MT per
annum.
Product Type: A wide variety of yarns – singles and twisted, are Product: Single
produced at this facility. Plain and fancy yarns suitable for weaving
as well as for flat bed and circular knitting are produced here. and Twisted Yarn
Regular, Gassed and Shantung qualities are offered from this
facility.
Products Offered:

 Spun Silk
 Silk Blended
 Silk Blended with Linen
 Silk Blended with Tusaar

Page 7 Source: Company, www.dynamiclevels.com

Retail and Distribution
North America
DWI Holdings, a subsidiary of Himatsingka, is focused in operating
Himatsingka
in the branded Home Textile space. Seide Ltd at
DWI Holdings has exclusive licenses for the sourcing, marketing
and distribution of luxury home textile brands – North America
 Calvin Klein Home

 Barbara Barry Operating

 Bellora Hospitality
Branded
Textile Textile
These brands are amongst the most prestigious and recognized Distribution
home textile labels in the North American market.
Textile

Calvin Klein Home is the second largest luxury bedding brand

distributed through department stores in the United States.

The DWI product line includes DDWI Holding

Divatex
 Sheets

 Pillowcases

 Duvet Covers Barbara

Calvin
Barry
 Bed Skirts, Pillow Shams Klein
Home
 Decorative Pillows
In addition the product line includes home accessories as well as
Blankets, Throws, Towels, Bathrobes, Turndown Mats and Bath
Rugs.

DWI is equipped with state-of-the-art warehousing and supply chain

capabilities to ensure the highest standards of service for its Bellora
customers. Hospitality
Divatex

Divatex, a subsidiary of Himatsingka, is amongst the largest Home

Textile distribution companies in North America.

Divatex sources and distributes a wide range of products from

Sheets and Pillowcases in cotton, polycotton, microfiber and other
blends to Top-of-Bed products, Duvets, Shams, Comforters,
Decorative Pillows, Bed Skirts, Coverlets, Quilts, Throws, Blankets
and more.
Divatex is committed to its customers, and services them through
major Specialty Home Stores, Department Stores, Warehouse
Clubs and Catalogues.

Page 8 Source: Company, www.dynamiclevels.com

Europe
Giuseppe Bellora S.P.A
Bellora, a subsidiary of Himatsingka, is amongst the most
recognized luxury bedding brands in Italy.
Founded in 1883, the brand epitomizes heritage and tradition. The
brand retails through 35 exclusive Bellora stores, multi-brand
outlets and luxury departmental stores in Italy and other parts of
Western Europe. Himatsingka Seide
Its product lines include LTD
 Fine bedding,

 Bath

 Allied home accessories

The design and product development capabilities of Bellora give its
products a unique presence across markets. Europe India /
Asia
India / Asia
Himatsingka Wovens

A global luxury home textile brand, Atmosphere is designed for

the discerning. The brand offers an exclusive collection of luxury Bellora Atmosphere
products like

 Drapery

 Upholstery

 Bed Linen
Its products are tailored to comply with both residential and
institutional applications.
35 Stores 9 Stores

A large part of the Atmosphere collection has been conceived

and developed at the design studios of Himatsingka. Its emphasis
on evolved aesthetic and superior quality enables the manufacture
of finest fabrics in the world.

Atmosphere has 9 exclusive stores across India and U.A.E. Of its

9 stores, 8 are located in India across 7 cities with 1 store in Dubai.

Page 9 Source: Company, www.dynamiclevels.com

Textile Industry Outlook
Why textile Industry is a priority sector in India

 India‟s textiles sector is one of the oldest industries in

Indian economy.
 Textiles sector is among the largest contributors to India‟s
exports with around 11 per cent of total exports. Export earnings is of worth
 The textiles industry is also labour intensive and is one of US$41.4 billion in 2014-15
the largest employers.
 The industry has export earnings of worth US$ 41.4 billion
in 2014-15, a growth of 5.4 per cent, as per The Cotton
Textiles Export Promotion Council (Texprocil). Provide
 The industry is the second largest employer after
employment to
agriculture, providing employment to over 45 million people
directly and 60 million people indirectly. 45 million people
 The Indian Textile Industry contributes approximately 5 per directly & 60
cent to India‟s gross domestic product (GDP)
 The Industry contributes 14 per cent to overall Index of million people
Industrial Production (IIP). indirectly
The textile industry caters both organized and unorganized
segment.

Unorganised sector consists of: Contribute 5%

 Handloom to GDP
 Handicrafts

 Sericulture,
Contribute
These are operated on a small scale and through traditional tools
and methods. 14% to IIP
Organised Sector consists of:

 Spinning

 Apparel and

 Garments segment

This applies modern machinery and techniques such as economies

of scale.

Page 10 Source: Company, www.dynamiclevels.com

Expectations and Achievements of Textile Industry

 The Indian textiles industry, currently estimated at around

US$ 108 billion, is expected to reach US$ 223 billion by Indian Textile
2021 Industry is expected
 The Indian textile industry has the potential to reach US$ to reach US$ 223
500 billion in size according to a study by Wazir Advisors
and PCI Xylenes & Polyester. billion by 2021
 The textiles sector has experienced a spurt in investment in
last five years. The effect is seen in stock price which has
given multiple returns to the investors.

 Foreign Direct Investment (FDI) worth US$ 1.77 billion

during April 2000 to September 2015 has been attracted.

Government initiatives on Textile industry

Narendra Modi led Government wanted to create job for both

skilled and unskilled labour to fulfill his promise post budget. This
sector has potential to generate employment and at the same time
can help in boosting Indian economy. Government has taken lots of
initiatives in this direction.

 It has allowed 100 per cent FDI in the Indian textiles sector
under the automatic route.

 Government has promoted “India Handloom” on social

media to connect to people outside India.

 The Ministry of Textiles invested Rs 200 crore in

Technology Mission on Technical Textiles (TMTT). The
objective of TMTT is to develop world class testing facilities
at eight Centres of Excellence across India.

 The Government will soon announce a new National

Textiles Policy. With the help of this new policy government
expects to create 35 million new jobs by attracting
investments from foreign companies, as per Textiles
Secretary Mr. S K Panda.

 The Government of India provides aid for creation of

infrastructure in the parks to the extent of 40 per cent with a
limit up to Rs 40 crore (US$ 6 million).

 The major machinery for production of technical textiles

receives a concessional customs duty list of 5 per cent.

 The government has also proposed to extend 24/7 customs

clearance facility at 13 airports and 14 sea ports resulting in
faster clearance of import and export cargo.

Page 11 Source: Company, www.dynamiclevels.com

Company Financials
Analysis of Profit
Statement of Profit Segment wise
Dec-15 Mar-15 Mar-14 Mar-13
In Cr 3 Quarter
Annual Annual Annual
revenue % of
Cumulative
Revenue 1436.03 1940.58 2028.22 1689.43
STO
Operating Profit 187.44 169.89 142.59 105.69
Other Income 3.78 6.66 4.65 8.98
Interest 65.66 85.09 79.69 65.28 Sheet Sets
- Bed
P/L Before Tax 125.66 91.46 63.41 51.74
Linen
Tax 1.68 -3.04 8.91 -1.21
PAT 123.98 94.50 54.50 52.95 Fabrics
EPS (Rs.) 12.59 9.69 6.43 5.82

Bed Linen
% Growth
- Traded
Particulars FY 2015 to FY FY 2014 to FY FY 2013 to FY
2016* 2015 2014
Power
Revenue -26.00% -4.32% 20.05%
Operating Profit 10.33% 19.15% 34.91%
Other Income -43.24% 43.23% -48.22%
Yarns
Interest -22.83% 6.78% 22.07%
P/L Before Tax 37.39% 44.24% 22.56%
PAT 31.20% 73.39% 2.93%
Fabrics -
EPS (Rs.) 29.93% 50.70% 10.48% Bed Linen

In last 3 Quarter (2015-2016) company has made sales of Rs.

1436.03 Crs. vs Rs. 1940.58 Crs last year and has an average
quarterly sale of Rs. 485 Cr. So if the company‟s post sales for
March Quarter of 2016 is in same line, then annual sale should Segment wise revenue
stand at Rs. 1921 crs. i.e. annual sales would be at par with that Product Name % of STO
of March 2015 annual sales. Sheet Sets - Bed
Linen 78.63
Fabrics 12.06
However, company has already beat its last year‟s profitability in
Bed Linen - Traded 3.27
3 quarters and the EPS for three quarter stands at 12.56 VS 9.69
Power 2.18
growth of 29.93%.
Yarns 1.14
Fabrics - Bed Linen 0.96
Interest cost has fallen by 22.83%. Net Debt is 780 Crores.

Page 12 Source: Company, www.dynamiclevels.com

 Analysis of cost
Analysis of Cost
15-Dec 15-Mar 14-Mar 13-Mar
In Cr 3 Quarter
Annual Annual Annual
cumulative
Consumption of
416.44 496.40 995.26 442.59
Raw Materials
Purchase of Traded
417.41 695.61 507.86 652.01
Goods
Employees Cost 141.39 193.44 200.15 171.83
Depreciation 35.22 44.64 54.38 52.16
Other Expenses 205.99 281.40 311.19 259.16
Total Expenditure 1248.59 1770.69 1885.63 1583.74

% Movement In Cost
FY 2015 to FY 2014 to FY 2013 to
In Cr
FY 2016* FY 2015 FY 2014
Consumption of Raw -16.11% -50.12% 124.87%
Materials
Purchase of Traded -39.99% 36.97% -22.11%
Goods
Employees Cost -26.91% -3.35% 16.48%
Other Expenses -26.80% -9.57% 20.08%
Total Expenditure -29.49% -6.10% 19.06%

From above table it is clear that the company has been able to
lower down its cost i.e. the company is performing with cost
efficiency and overhead cost well managed year on year.

We can see from above table that the company‟s topline is

consistent Year on Year, but by well managed cost and
economies of scale, the company is able to grow on bottom line.

Page 13 Source: Company, www.dynamiclevels.com

Balance Sheet
Himatsingka seide Limited | As at March 31, 2015

Page 14 Source: Company, www.dynamiclevels.com

Page 15 Source: Company, www.dynamiclevels.com
Page 16 Source: Company, www.dynamiclevels.com
 Peer Comparison
Price & Volume Comparison
Avg. Market Cap Ratio Analysis
INSTRUMENT Price Current Ratio (x) 1.8
Volume (Rs. in Cr)
HIMATSINGKA 209.50 216994 2090 Quick Ratio (x) 0.59
WELSPUN INDIA 99.30 1010091 9580 Dividend Yield (%) 0.94
SRF 1398.00 163057 7960 Interest Coverage Ratio (x) 2.59
ARVIND 267.60 1658161 6982 Debt Equity Ratio (x) 0.83
INDO COUNT 1068.90 62430 3872 Return On Asset (%) 7.61
KPR MILL 869.30 12668 3179
Return On Equity (%) 11.85
TRIDENT 51.80 575334 2600

Above comparison shows that average Market cap of the industry

is 2500cr (removing extremes) and Himatsingka Seide has
Market cap of 2090 and average volume is 2 lakhs which means
company has good market liquidity.

FII Holding & Ratio Comparison

% FII P/E Ratio Debt Equity
INSTRUMENT
Holding (X) Ratio (X)
HIMATSINGKA 7.40 14.00 0.83
WELSPUN INDIA 5.02 14.00 1.81
SRF 16.09 21.00 0.89
ARVIND 10.47 23.00 1.26
INDO COUNT 8.50 20.00 1.1
KPR MILL 3.20 15.00 0.8
TRIDENT 0.00 12.00 1.52

Industry PE of textile sector is at 18.50 and standard Debt Equity

ratio should be below 2. This suggests that comparing to Industry
PE stock is still trading at a lower level.

Financial Comparison
Annual Sales Operating Net Profit
INSTRUMENT
Mar 15 Profit in Cr in Cr
HIMATSINGKA 1940.58 168.89 94.5
WELSPUN INDIA 5302.51 941.25 544.29
SRF 4539.85 481.87 302.81
ARVIND 7851.4 800.5 337.62
INDO COUNT 1781.8 297.68 145.87
KPR MILL 2565.75 283.28 173.57
TRIDENT 3786.05 370.18 117.87

Page 17 Source: Company, www.dynamiclevels.com

 Profitable Comparison
Net Profit Equity in FV
INSTRUMENT EPS
in Cr Cr
HIMATSINGKA 94.50 49.23 5.00 9.69 Share Price Performance
WELSPUN INDIA 544.29 10.46 53.76 in INR
SRF 302.81 5.84 52.74 Price 212.30
ARVIND 337.62 25.84 13.21 52 Week High 248.40
INDO COUNT 145.87 3.94 38.95
52 Week Low 74.05
KPR MILL 173.57 3.76 45.73
TRIDENT 117.87 50.80 2.47 52 Wk Beta 1.65
1M Return 7.2%
Price Performance Comparison
6M Return -4.2%
Movt Post
INSTRUMENT 1M 3M 6M 1Y 52 Wk Return 152.8%
Budget
HIMATSINGKA 7% 6% -4% 153% 38%
SRF 15% 26% 6% 25% 32%
KPR MILL 9% 16% 10% 46% 31%
INDO COUNT 13% 5% 14% 138% 28%
KITEX 8% -19% -46% -39% 23%
TRIDENT -1% 19% 11% 117% 21%
WELSPUN INDIA 1% 23% 25% 134% 14%
ARVIND -2% -11% -7% 3% 6%

Post budget* Himatsingka seide has been a top performer in

th
textile sector with return of 38%. (*Budget was announced on 29
Feb 2016).

Dividend History
Announcement Date Ex-Date Amount Interim/Final
11-Mar-16 22-Mar-16 1 Interim
25-May-15 4-Sep-15 2 Final
15-May-14 8-Sep-14 1.5 Final
27-May-13 26-Jul-13 1 Final
26-May-12 9-Aug-12 0.5 Final
31-May-10 24-Aug-10 0.25 Final
5-Mar-07 16-Mar-07 1.25 Interim
9-Oct-06 2-Nov-06 1.25 Interim
31-May-06 13-Jul-06 1.25 Final

Page 18 Source: Company, www.dynamiclevels.com

 Last 2 Week Delivery Position
Total
High Low Deliverable Delivery
Date Traded
Price Price Qty % Qty
Qty
4-Apr-16 201.2 195.55 146318 54346 37%
5-Apr-16 196.35 186.6 142991 76254 53%
6-Apr-16 192.7 187 132162 55498 42%
7-Apr-16 194.9 188.25 108896 49109 45%
8-Apr-16 190.5 185.55 179082 76149 43%
11-Apr-16 189 185.3 154493 85661 55%
12-Apr-16 194.75 187.6 239024 109308 46%
13-Apr-16 195.6 191.4 174622 92968 53%
18-Apr-16 213.8 191.2 1288574 432229 34%

Highest deliverable quantity was seen at 194.75 to 187.60 levels

th
on 12 April 2016 and at 191.20 to 213.80 with deliverable
quantity of 1.09 lakhs shares and 4.32 lakhs shares respectively.
So 190 level can be a good base for the stock.

Top Large Deals

Date Exchange Quantity Price Value(Cr) Time

21-Mar-16 NSE 490755 199.50 9.79 10:58

Shareholding Pattern Mar-16 Dec-15 Sep-15 Jun-15

Promoter & Promoter 57.22 57.22 57.22 57.07
Group (%)
Indian 55.96 55.96 55.96 55.81
Foreign 1.26 1.26 1.26 1.26
Institutions (%) 14.92 15.01 12.42 15.15
FII 8.26 7.40 4.64 0.26
DII 6.62 7.61 7.78 14.89
Non Institutions (%) 27.86 27.77 30.36 27.77
Bodies Corporate 3.76 NIL 5.69 4.74
Others 24.10 27.77 24.67 23.03
Custodians NIL NIL NIL NIL
No. of shares (cr.) 9.85 9.85 9.85 9.85

Page 19 Source: Company, www.dynamiclevels.com

Company’s Future Outlook - by Management:
Shrikant Himatsingka Executive director

1. Company is operating about 12-14 brands and aspire to

achieve about Rs 1200 crore in revenue from brands in the
next two-three years.
2. North America is largest market so company has a large
position in that geography across the United States, Canada
and Mexico.
3. Shrikant expect some softness in demand in the European
geographies and the Indonesian areas where they are
present. So, North America is the geography that will sort of
lead the growth for them.
4. Company‟s manufacturing performance has been extremely
strong and they see the underlying buoyancy to continue as
far as manufacturing is concerned.
5. Both plants perform reasonably well and in FY 2017 as stated
earlier they are scheduled to commission new sheeting
capacities by June 2016 for which they are running on
schedule, so next year is also going to see some incremental Greater impact of initiatives
capacities that will come their way which would give further will be seen in FY 2017.
boost to company‟s manufacturing performance.
6. Debt number of the company is 878 Crores gross 780 Crores
net 98 cash and cash equivalents.
7. Larger benefits were expected in FY 2016 but company admits
that they are seeing some delays in some of the initiatives Expected EBITDAs in the
that they have taken. They have some delays in it bearing
region of 6%, to 7%.
fruit so they see the greater impact of these initiatives coming
through in FY 2017.
8. Company expects stable state for retail and distribution
business that should throw up EBITDAs in the region of 6%, to
7%. Company is focusing on
9. More than Channels Company is more focused on building mid and large size clients
mid and large size client basis and that is why they are
exiting micro clients as far as their business complexion is
concerned on the bedding side and bath side of the business
that has because some soften in revenue. They see it
stabilize going into Q1 at this point and they see the uptick
begin possibly in Q2 FY 2017.

Page 20 Source: Company, www.dynamiclevels.com

Capex Plan of the company Capex Plan planned
1. The cumulative Capex Plan that has been planned by the stands at 1281 Cr.
company, stands at 1281 Crores across three projects
which is sheeting project, spinning project and the terry
towel project. Project will be over
2. The company has indicated earlier that the timeframe for
in next 3 years
these projects will be over in the next three years. Of
these three projects, the company has commenced work
on the expansion of its current sheeting plant, the
capacity of which will be enhanced from 23 million 23 million meters
meters per annum to 46 million meters per annum.
will enhanced to
3. The schedule date of commissioning of this expansion
currently stands for June 2016 this project entails an 46million meters
investment of just over 200 Crores. p.a.
4. The total investment that the company foresees in its
spinning plant will stand at just over 600 Crores and the
total investment in the terry towel facility will stand at just
over 400 Crores. Spinning & Terry
5. Himatsingka plans to set up a total capacity of 211584 towel plants will
spindles, for which construction has not commenced
start in next quarter
yet.

Page 21 Source: Company, www.dynamiclevels.com

Investment Rationale

 Increasing manufacturing capacity & backward integration will

lead to growth in margin.
 With a long-term focus on sustainable and profitable growth,
Himatsinka Seide Ltd has earmarked a capacity expansion plan
of Rs.1281cr. to expand company‟s manufacturing capacity.
 The investments entail an increase in its current bed linen
capacity, backward integration into spinning and foray into terry
towels.
 The company‟s stock price is trading below industry PE of 20.
 The company has planned a Capital Expenditure of Rs.600cr.
for backward integration into spinning with a capacity of
211,584 Spindles, for captive purpose which can cater to
existing bed linen capacity.
 Spinning plant is expected to start operation by FY18. The
backward integration process is expected to be margin
accretive with improving operational flexibility, execution
consistency and quality standards.
 The company plans to foray into Terry towels manufacturing
with a capacity of 25,000 TN per annum with a CapEX of
Rs.450cr. Terry towel plant is expected to generate revenue
from FY19.

Himatsinka Seide Ltd is a Multibagger Stock recommended by

Dynamic Levels.

Data source: Bloomberg, BSE India, NSE India

Page 22 Source: Company, www.dynamiclevels.com

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Page 23 Source: Company, www.dynamiclevels.com