Jun 1, 2016

Nahar Industrial Enterprise: Value and Growth Stocks

Nahar Ent is a company that produce Yarn, Fabric and Sugar. Listed on BSE and NSE, therefore no BSE's silly restriction. It also produce alcohol. The company's plant is in Punjab.

Its principal product is yarn and fabric. Recently many insider trading has happened here before result. Though the amount involved in that was small. It has installed capacity of 2500 tones of cane crushed per day ("TCD") at Fatehgarh Sahib, Punjab. Sugar plant is small.

It also produce power from its plant.

Co-generation power plant of :
Lalru (Pb) - 29 MW.
Amloh (Pb) 16 MW.

Group Companies:
Monte Carlo Fashions,
Oswal Woolen mills,
Nahar Poly films,
Oswal Leasing,
Kovlam investment & trading,
Cotton County - Shirt, T-shirt, denim pant, trousers, jacket, etc

Credit Rating: [ICRA]A- (Stable) for Short term,
[ICRA]A2+ for long term.

Promoters: 68.38%
Corporate: 1.21%
DII: 1.25%
FII: 0


International Clients

Domestic Clients

Recently yarn and fabric companies has given excellent result and this too has given very better result. China has increased the wage of its worker and that should help Indian textile companies.

Volume is a concern. Time to time, it gives adequate volume. So, for very short term investment it could be bad to enter.

Textile: 93% of revenue.
22 Cr was the loss due to sugar in 2015 against profit of 4 cr previous year. I am expecting that profit in sugar instead of loss in sugar should add large amount in bottom line even if its sugar revenue is not much compared to textile.

Dec, 2015 profit was just 13.92 Cr whereas March, 2016 profit is 23.97 Cr. Could be invested here and keep at least till June and Sept Qtr result.

Current Price: Rs 72.10
Debt/Equity: 1.68
Interest Coverage: 1.72

Debt is high but it's PE is just 6 now. It means high debt is fully priced. June and Sept quarter result should be higher as well.

ASHISH DHAWAN is also invested here.

It has many subsidiaries and investment structure look little complex due to inter-related investment. I am not mentioning that. Here are some info about its stake in its subsidiaries.

Particulars of Holding , Subsidiary and associate companies:
Cotton County Retail Ltd - Associate - 49.99%
J.L. Growth Fund Limited - Associate - 41.10%
Vardhman Investments Limited - Associate - 47.17%
Atam Vallabh Financiers Limited - Associate - 36.85%

Revenue of Rs 1775.71 cr and PE is just 6. Revenue is not projected it is already there. So, with higher profit, we are pretty sure of it getting higher valuation in future.

Punjab has reduced VAT from 6.5 percent to 3.6 percent in March budget 2016 for yarn manufacturer.