CMP 429.25

Target Price 472.00

ISIN: INE040D01012

MAY 30th

, 2013

MAYUR UNIQUOTERS LTD Result Update: Q4 FY13

BUYBUYBUYBUY

Stock Data

Sector Textiles

BSE Code 522249

Face Value 10.00

52wk. High / Low (Rs.) 505.10/236.00

Volume (2wk. Avg ) 1057

Market Cap ( Rs in mn ) 4647.06

Annual Estimated Results (A*: Actual / E*: Estimated)

Years FY13A FY14E FY15E

Net Sales 3805.39 4185.93 4478.94

EBITDA 717.84 799.81 867.49

Net Profit 436.26 482.77 529.55

EPS 40.30 44.59 48.91

P/E 10.65 9.63 8.78

Shareholding Pattern (%)

1 Year Comparative Graph

BSE SENSEX MAYUR UNIQUOTERS LTD

SYNOPSIS

Mayur Uniquoters Ltd is has a full range of machinery to fulfill Printing, Embossing, Lacquering, Sueding and Laminating needs.

The company is a preferred OEM supplier to nation and international automobile giants and it also supply to leading footwear manufacturers

During the fourth quarter ended, net profit jumps to Rs. 129.27 million against Rs. 111.70 million in the corresponding quarter of previous year, an increase of 15.73%.

Mayur Uniquoters Ltd has recommended the payment of final dividend @ 35% i.e. Rs. 3.50/- per Equity Share of the face value of Rs. 10/- each for year ended March 31, 2013.

The company has commenced its production at new knitted Fabric unit at Dodhsar plant on September 28th 2012.

Mayur is also in the process of installing its 5th Coating line at the Dodhsar, will add a capacity of 6, 00,000 liner meters per month to the existing capacity 2.5 million.

The company marketing & distribution structure has expanded significantly abroad especially in USA.

Net Sales and PAT of the company are expected to grow at a CAGR of 12% and 16% over 2012 to 2015E respectively.

Peer Groups CMP Market Cap EPS P/E (x) P/BV(x) Dividend

Company Name (Rs.) Rs. in mn. (Rs.) Ratio Ratio (%)

Mayur Uniquoters Ltd 429.25 4647.06 40.30 10.65 3.92 135.00

Siyaram Silk Mills Ltd 260.65 2442.80 58.70 4.44 0.76 75.00

Welspun India Ltd 58.50 585.16 17.14 3.41 0.53 0.00

Garden Silk Mills Ltd 48.05 1847.50 0.00 0.00 0.38 0.00

Investment Highlights

Results updates- Q4 FY13,

Mayur Uniquoters Ltd a full range of machinery to

fulfill Printing, Embossing, Lacquering, Sue ding

and Laminating needs, reported its financial results

for the quarter ended 31st March, 2013. The fourth

quarter witnesses a healthy increase in overall

sales as well as profitability of the company.

Months Mar-13 Mar-12 % Change

Net Sales 981.93 901.46 8.93%

PAT 129.27 111.70 15.73%

EPS 11.94 20.64 -42.14%

EBITDA 212.31 182.04 16.63%

The company’s net profit jumps to Rs. 129.27 million against Rs. 111.70 million in the corresponding quarter

ending of previous year, an increase of 15.73%. Revenue for the quarter rose by 8.93% to Rs. 981.93 million from

Rs. 901.46 million, when compared with the prior year period. Reported earnings per share of the company go

down by value, due to the increase of equity capital by 108.26 millions from 54.13 millions and the EPS are at Rs.

11.94 a share during the quarter, registering 40.72% decrease over previous year period. Profit before interest,

depreciation and tax is Rs. 212.31 millions as against Rs. 182.04 millions in the corresponding period of the

previous year.

Expenditure :

During the quarter Total Expenditure rose by 7 per

cent mainly on account of Increase in Cost of

employee benefit along with consideration of

deprecation. Total expenditure in Q4 FY13 was at

790.18 million as against Rs. 736.98 million in

Q4FY12. Cost of Material consumed Rs. 740.51

against Rs. 682.75 millions in the corresponding

period of the previous year. Employee benefit

expenses are 34.95. Other Expenses was at Rs. 53.66

million and Depreciation is Rs. 13.68 million in

Q4FY13 are the primarily attributable to growth of

expenditure.

Latest Updates

Mayur Uniquoters Ltd has recommended the payment of final dividend @ 35% i.e. Rs. 3.50/- per Equity Share of

the face value of Rs. 10/- each for year ended March 31, 2013.

The company has commenced of production at new knitted Fabric unit at Dodhsar plant on September 28th

2012.

Mayur is also in the process of installing its 5th Coating line at the Dodhsar, will add a capacity of 6,00,000

liner meters per month to the existing capacity 2.5 million.

Company Profile

Mayur Uniquoters Ltd was established and started operations in the year 1994 with an installed capacity of

400,000 Linear Meters per month & it has a full range of machinery to fulfill Printing, Embossing, Lacquering,

Sueding and Laminating needs. The company possesses fully equipped Physical, Chemical and Product

Development Laboratories capable of testing nearly all the properties of Artificial Leather for different segments

and applications. The guiding principle of the organization has always been fulfillment of customer requirement

and progressive thinking. The constant human and technological development, the company has an installed

capacity of 2.1 Million Linear Meters per month which is fully utilized.

Enterprise Resource Planning (ERP) / IT is a part and parcel of all functions in the company and with constant

persistence, the organization has understood and also finds it a better way to stay organized, improve

productivity, communicate faster within the organization and ensure product and process traceability from start

to end. The company has been certified with ISO 9001:2008 (Quality Management System) which is

demonstrative of commitment towards continual improvement.

� Products

Mayur Uniquoters Ltd is a manufacturers and exporters of PVC Vinyl also referred to as Artificial Leather /

Synthetic Leather / PVC Leather Cloth / PU/PVC Leather Cloth.

� Laboratories

• Online Testing Lab

• Physical Testing Lab

• Raw Material Testing Lab

• Color Testing Lab

• Product Development Lab.

� Expansion

The state of the art knitting machines from Terrot and Mayer & CIE Germany, and a brand new Stenter from

Bruckner, Germany, the new plant will have an installed capacity of 500,000 linear meters of knitted and

processed fabric per month. The company is in process of installing our 5th Coating line at the same location.

The housed in a shed of size 60,000 Sq feet, the new line from Matex Srl, Italy will add a capacity of 600,000

linear meters per month, taking us to newer heights , with a total installed capacity of 2.50 million linear

meters per month expected production by April 2013.

� Clients

• Maruti Suzuki

• Tata Motors

• TS Tech

• Honda

• Bata

• Chrysler

• Magna

• Ford

• Foamex

• Lear Corporation

• Ningbo Jifeng Auto

• Parts Co. Ltd.

• Taj Vinyl

• Swaraj

• BSL

• Krishna Maruti

• Sharda Motor

• Sietz Technologies

• Alpha Foam Ltd

• Mahindra Tractors

• Sonalika

• Piaggio

• LML

• Nissan

• Hyundai

• VKC

• Liberty Footwear

• Condor India Ltd

• Paragon

• Lunar's

• Odyssia

• Saddles

• Marvin

• Carbon Footwear

• Khadim's

• Lehar

• Autoworld

• Bairathi Footwear

• Dawari

• Roadstar Footwear

• Tulip Enterprises

• Poddar Footwear

• Elegant

Ongoing Clients

• BMW

• GENERAL MOTORS

• DAIMLER.

Financial Highlight

Balance sheet as at March 31st, 2012

(A*- Actual, E* -Estimations & Rs. In Millions)

EQUITY AND LIABILITIES FY-12A FY-13A FY-14E FY-15E

Shareholder's Funds

a) Capital 54.13 108.26 108.26 108.26

b) Reserves and Surplus 804.68 1076.41 1559.18 2088.73

Sub -Total- Shareholder fund 858.81 1184.67 1667.44 2196.99

Non Current Liabilities a) Long- Term Borrowings 29.22 45.92 57.40 64.29

b) Differed Tax Liability 30.23 35.54 38.74 40.68

c) Long Term Provisions 1.26 0.61 0.45 0.38

Sub-Total Non Current Liabilities 60.71 82.07 96.59 105.34

Current Liabilities

a) Short Term Borrowings 0.00 164.02 172.22 177.39

b) Trade Payables 467.42 473.84 483.32 488.15

c) Other Current Liabilities 158.30 170.57 180.80 186.23

d)Short Term Provisions 39.78 59.75 74.69 85.89

Sub-Total - Current Liabilities 665.50 868.18 911.03 937.66

Total Liabilities 1585.02 2134.92 2675.06 3239.99

ASSETS

Non- Current Assets

a) Fixed Assets

i) Tangible Assets 450.92 546.67 679.86 860.45

II)Capital work In Progress 39.78 189.07 283.61 411.23

c) Non-Current Investment 0.66 0.66 0.66 0.66

d) Long Term Loans & Advances 15.89 36.51 63.89 84.34

e) Other Non Current Assets 6.00 10.96 14.80 17.02

Sub -Total- Non- Current Assets 513.25 783.87 1042.81 1373.69

Current Assets

a) Current Investment 116.51 135.89 152.20 167.42

b) Inventories 307.07 442.34 552.93 630.33

c) Trade Receivables 405.98 564.51 711.28 839.31

d) Cash & Cash Equivalents 190.38 106.51 85.21 76.69

e) Short- Term Loans and Advances 33.62 67.89 81.47 89.61

f) Other Current Assets 18.21 33.91 49.17 62.94

Sub -Total Current Assets 1071.77 1351.05 1632.25 1866.30

Total Assets 1585.02 2134.92 2675.06 3239.99

Annual Profit & Loss Statement for the period of 2012 to 2015E

Value(Rs.in.mn) FY12 FY13 FY14E FY15E

Description 12m 12m 12m 12m

Net Sales 3174.79 3805.39 4185.93 4478.94

Other Income 17.03 27.36 34.20 39.33

Total Income 3191.82 3832.75 4220.13 4518.27

Expenditure -2641.64 -3114.91 -3420.32 -3650.79

Operating Profit 550.18 717.84 799.81 867.49

Interest -19.64 -24.35 -27.27 -28.91

Gross profit 530.54 693.49 772.53 838.58

Depreciation -38.72 -51.70 -61.01 -68.33

Profit Before Tax 491.82 641.79 711.53 770.25

Tax -158.12 -205.53 -228.76 -240.70

Net Profit 333.70 436.26 482.77 529.55

Equity capital 54.13 108.26 108.26 108.26

Reserves 804.67 1076.41 1559.18 2088.73

Face value 10.00 10.00 10.00 10.00

EPS 61.65 40.30 44.59 48.91

Quarterly Profit & Loss Statement for the period of 30th September, 2012 to30th June, 2013E

Value(Rs.in.mn) 30-Sep-12 31-Dec-12 31-Mar-13 30-Jun-13E

Description 3m 3m 3m 3m

Net sales 991.55 938.28 981.93 962.29

Other income 5.98 7.18 6.88 5.16

Total Income 997.53 945.46 988.81 967.45

Expenditure -813.02 -776.33 -776.50 -788.60

Operating profit 184.51 169.13 212.31 178.85

Interest -5.13 -6.26 -7.00 -7.35

Gross profit 179.38 162.87 205.31 171.50

Depreciation -12.39 -13.42 -13.68 -14.50

Profit Before Tax 166.99 149.45 191.63 157.00

Tax -53.66 -46.88 -62.36 -50.16

Net Profit 113.33 102.57 129.27 106.84

Equity capital 108.26 108.26 108.26 108.26

Face value 10.00 10.00 10.00 10.00

EPS 10.47 9.47 11.94 9.87

Ratio Analysis

Particulars FY12 FY13 FY14E FY15E

EPS (Rs.) 61.65 40.30 44.59 48.91

EBITDA Margin (%) 17.33% 18.86% 19.11% 19.37%

PBT Margin (%) 15.49% 16.87% 17.00% 17.20%

PAT Margin (%) 10.51% 11.46% 11.53% 11.82%

P/E Ratio (x) 6.96 10.65 9.63 8.78

ROE (%) 38.86% 36.83% 28.95% 24.10%

ROCE (%) 66.32% 55.18% 45.38% 38.37%

Debt Equity Ratio 0.03 0.18 0.14 0.11

EV/EBITDA (x) 3.93 6.62 5.99 5.55

Book Value (Rs.) 158.66 109.43 154.02 202.94

P/BV 2.71 3.92 2.79 2.12

Charts

Outlook and Conclusion

� At the current market price of Rs.429.25, the stock P/E ratio is at 9.63 x FY14E and 8.78 x FY15E

respectively.

� Earning per share (EPS) of the company for the earnings for FY14E and FY15E is seen at Rs.44.59 and

Rs.48.91 respectively.

� Net Sales and PAT of the company are expected to grow at a CAGR of 12% and 16% over 2012 to 2015E

respectively.

� On the basis of EV/EBITDA, the stock trades at 5.99 x for FY14E and 5.55 x for FY15E.

� Price to Book Value of the stock is expected to be at 2.79 x and 2.12 x respectively for FY14E and FY15E.

� We expect that the company surplus scenario is likely to continue for the next years, with the

commencement of the production of new knitted fabric unit at Dodhsar and the company the plant has

recognized as the new pillars to the future success and gearing itself to take the advantage of the

increasing demand of Synthetic leather the company also in the process of installing its 5th coating line at

the same location, with an added capacity of 600000 linear meters per month. All this will keep the

company growth story in the coming quarters also. We recommend ‘BUY’ in this particular scrip with a

target price of Rs.472.00 for Medium to Long term investment.

Industry Overview

The Indian textile industry is one of the major sectors of Indian economy largely contributing towards the

growth of the country’s industrial sector. The textile sector contributes 14 per cent to industrial production, 4

per cent to National GDP, and 10.63 per cent to country’s export earnings. Textile sector in India provides direct

employment to over 35 million people and holds the second position after the agriculture sector in providing

employment.

Growing at a rapid pace, the Indian Market is being flocked by foreign investors exploring investment purposes

and with an increasing trend in the demand for textile products in the country, a number of new companies and

joint ventures are being set up in the country to capture new opportunities in the market.

Market Size

The most significant change in the Indian textile industry has been the advent of man-made fibres (MMF). The

country has successfully placed its innovative range of MMF textiles in almost all the countries across the globe.

Polyester is the largest segment of the Indian MMF and rayon textile industry. Exports of Indian MMF textiles

scaled an all-time high of US$ 5,699 million in 2011-12, as compared to US$ 5,013 million in 2010-11, registering

a year-on-year growth of 14 per cent. In 2011-12, fabrics were the largest product category accounting for 41 per

cent of total exports. During 2011-12, the Middle East was the largest market and accounted for nearly 25 per

cent of textile exports from India, while Asia accounted for 23 per cent.

In June 2012, the production of MMF has registered a growth of 18 per cent, cotton yarn by 14 per cent and total

cloth production saw an increase of five per cent.

The provisional export of handmade carpets, floor coverings and other Handicrafts product during July 2012

were Rs 1387.22 crore (US$ 252.31 million), registering an increase of 14.41 per cent as compared to Rs 993.3

crore (US$ 180.67 million) during the corresponding month in 2011.

The potential size of the Indian textile and apparel industry is expected to reach US$ 221 billion by 2021,

according to Technopak's Textile and Apparel Compendium 2012.

Investments

The textiles sector has witnessed a spurt in investment during the last five years. The industry attracted foreign

direct investments (FDI) worth Rs 61.36 crore (US$ 11.17 million) in the month of May 2012 as compared to Rs

24.75 crore (US$ 4.50 million) during the corresponding month in 2011.

The Indian textile industry saw three mergers and acquisitions (M&A) deals worth US$ 455 million in the month

of July 2012. Some of the major investments in Indian Textile Industry are:

• The Aditya Birla Group has signed an in-principle agreement to buy the assets of Ontario-based Terrace

Bay Pulp Mill for Rs 605 crore (US$ 109.97 million). The acquisition would be carried out through AV

Terrace Bay (Canada), a special purpose vehicle (SPV) in which two group companies, Grasim Industries

and Thailand-based Thai Rayon Public, would hold stake

• American apparel-maker Tommy Hilfiger plans to add 500 stores in India over the next five years as part

of their expansion spree. Currently, Tommy Hilfiger operates 58 franchise outlets and over 60 shop-in-

shops in other department stores.

• Italian luxury apparel maker, Canclini Tessile is tying up with Tirupur-based Emperor Textiles to stitch

its shirts in India. The equal joint venture (JV) with Emperor Textiles will set up a separate manufacturing

unit in Tirupur to manufacture Italian fabric for domestic consumption

• Trident Group has announced setting up an integrated textile complex and expanding its yarn facilities at

Budni, Madhya Pradesh (MP). This will involve an investment of Rs 3,600 crore (US$ 653.98 million) and

the new facilities will be involved in the manufacturing of terry towels, sheeting, value-added yarns and

captive power plant

• Italian luxury major Canali has entered into a 51:49 joint venture (JV) with Genesis Luxury Fashion,

which currently has distribution rights of Canali-branded products in India. Canali also plans to invest Rs

7.65 crore (US$ 1.39 million) in India. The JV company will now sell Canali branded products in India

exclusively

Government Initiatives

The Government of India has promoted a number of export promotion policies for the Textile sector in the Union

Budget 2011-12 and the Foreign Trade Policy 2009-14. It has also allowed 100 per cent FDI in textiles under the

automatic route.

Due to policy measures initiated by the Government in the recent past, the Indian textiles industry is in a

stronger position than it was in the last six decades. The industry which was growing at 3-4 percent during the

last six decades has now accelerated to an annual growth rate of 8-9 per cent in value terms.

• The Government of Gujarat has announced a new textile policy that assures cotton growers of best price

for their produce in India and overseas. The new policy aims at attracting an investment of Rs 20,000

crore (US$ 3.63 billion)

• The Government has offered health insurance coverage and life insurance coverage to 161.10 million

weavers and ancillary workers under the Handloom Weavers’ Comprehensive Scheme, while 733,000

artisans were provided health coverage under the Rajiv Gandhi Shilpi Swasthya BimaYojna

• The Central Cottage Industries Corporation of India (CCIC), and the Handicrafts and Handlooms Export

Corporation of India (HHEC) have developed a number of e-marketing platforms to simplify marketing

issues. Also, a number of marketing initiatives have been taken up to promote niche handloom and

handicrafts products with the help of 600 events all over the country

• The Government has given approval to set up 40 new Textiles Parks. The new textiles Parks would

provide employment to 400,000 textiles workers. The product mix in these parks would include apparels

and garments parks, hosiery parks, silk parks, processing parks, technical textiles including medical

textiles, carpet and power loom parks

• The Government established the TUFS to enable firms to access low-interest loans for technology

upgradation. Under this scheme, the Government reimburses 5 per cent of the interest rates charged by

the banks and financial institutions, thereby ensuring credit availability for upgradation of the technology

at global rates

• The Government has proposed establishing several Centres of Excellence (CoE) for training the

workforce in the textile sector. These CoEs, with national and international accreditation, are aimed at

creating facilities for testing, evaluation, developing resource centres and facilities for training

Road Ahead

The textiles industry complements the growth of several industries and institutions such as the defence forces,

railways, and government hospitals, which are the key institutional buyers of technical textiles. The market is

expected to grow to US$ 31 billion by 2020, at a CAGR of 10 per cent. The industry includes production of flexible

packaging material for industrial, agricultural and consumer goods. Among the other segments, protech,

oekotech, spotechi and geotech have significant growth potential. India’s technical textile industry is an emerging

area for investments with good growth opportunities.

With the increase in investments in the Indian textile sector, the subsequent increase in the industrial

production, and the positivity observed by the textile sector have resulted in progress and development of the

sector. Integrating the sectoral needs with technical advancements will completely modernise the industry

chains across the country, along with continued investments assisting in reaping benefits for the Indian textile

sector.

Disclaimer:

This document prepared by our research analysts does not constitute an offer or solicitation for the purchase or sale

of any financial instrument or as an official confirmation of any transaction. The information contained herein is

from publicly available data or other sources believed to be reliable but do not represent that it is accurate or

complete and it should not be relied on as such. Firstcall India Equity Advisors Pvt. Ltd. or any of it’s affiliates shall

not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the

information contained in this report. This document is provide for assistance only and is not intended to be and must

not alone be taken as the basis for an investment decision.

Firstcall India Equity Research: Email – info@firstcallindia.com

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