Nandan Denim Ltd.

Current price

79.50

Sector

Textiles - Denim

No of shares

45549056

52 week high

94.15

52 week low

32.55

BSE Sensex

28756.91

Nifty

8733.75

Average Volume

13799

BSE Code

532641                           

NSE Symbol

NDL                              

Company Overview

Nandan Denim Ltd is an India-based company engaged in the textile industry. The company is engaged in manufacturing gray cotton fabrics, khakis, and denim. They also manufacture fabrics of different weaves, dyes, combinations of yarns, and weights. The range of fabrics includes denim, twills, stretch, bull denim, broken twills. Their principal products include cotton grey fabric/ blended fabrics, cotton yarn, denim fabrics, and ready-made garments. Nandan Denim Ltd was incorporated on August 9, 1994, as a private limited company with the name Nandan Denim Pvt Ltd. The company was established for manufacturing, trading, and export of textile products and was promoted by Vedprakash D Chiripal and Brijmohan Chiripal. Initially, the company was in the business of trading fabrics in domestic and international markets.

Nandan Denim Ltd also offers fabrics of various weaves, dyes, combinations of yarns, weights, etc. The company’s products include twills, stretch products, bull denim, and broken twills. It serves garment manufacturers, importers, distributors, ready-made garment exporters, various brands, stockists, etc. Nandan Denim Limited also exports its products to West and South East Asia, Europe, and the Americas. In terms of installed capacity, NDL now ranks as the largest domestic denim fabric manufacturer.

Considering the company’s established position, large capacity, and healthy clientele, NDL has successfully developed a healthy client base in the domestic market, including established apparel (such as Spyker, Mufti, Gini & Jony, and Color Plus) and textile products manufacturers (such as Tirupati Denim and Vardhaman Textiles). The top 10 clients account for ~39% of revenues, indicating moderate concentration risk. In the export market, NDL has developed relationship with some international players, which, we believe, needs to be further strengthened. According to the management, the company supplies to major global brands such as Ralph Lauren, Armani Exchange, Talbots, Calvin Klein, Tommy Hilfiger, Target, Anntaylor, Carrefour and Polo. The current market capitalisation stands at Rs 366.44 crore.

Share Holding Pattern

Category

No. of Shares

Percentage

Promoters

27,758,720

60.94

General Public

10,527,324

23.11

Other Companies

                                            3,366,317

                                            7.39

Foreign - NRI

2,465,880

5.41

Foreign Institutions

                                             1,409,062

                                            3.09

Financial Institutions

                                                  16,253

                                            0.04

Central Government

                                                    5,500

                                            0.01

Financial Details
  • Market Cap (Rs Cr) – 366.44

  • Company P/E (x) – 7.56

  • Industry P/E (x) – 19.06

  • Book Value (Rs) – 47.56

  • Price / BV (x) – 1.69

  • Dividend (%) – 12 %

  • EPS (TTM) – 10.64

  • Dividend Yield (%) – 1.49 %

  • Face Value (Rs) – 10

Industry Overview

Nandan Denim Ltd is of the most promising category in India’s apparel market. In 2013, the denim market of India was worth Rs.13,500 Cr. which accounts for 5 percent of the total apparel market of the country. The market is projected to grow at a CAGR of 15 percent to become Rs.27,200 Cr. market in 2018.

The denim market in India is skewed towards men’s segments with 85 percent contribution coming from it. Women’s denim segment contributes 9 percent to the market and the kids segment the rest 6 percent. The women’s and kid’s denim segments are expected to witness higher growth rates due to their lower base and increasing focus of brands and retailers on those segments.

In general the western lifestyle and western fashion has accelerated the trend of casualisation across the globe. This trend has boosted the consumption of casual fashion apparel like denims, dress shirts, tees, casual shirts among both men and women consumers in all developing countries including India. The average number of denim items owned by Indian consumer is much lower in comparison to consuming market of the United States, Europe etc. The number is even lower than countries like Brazil and China. This difference in the number demonstrates the huge potential that exists for denim in the domestic market.

The value share of denim market is skewed in favour of mega metros and metros which account for almost half of the total denim market at a share of 49 percent. Though the markets of other urban areas and rural India contribute high in volume terms, their combined share in market value is only 51 percent. As the penetration of the denim category and the awareness of denim quality increases in those cities and rural India, their share in market value will start increasing with more consumers willing to pay a premium for the quality, design, and fit. In India unbranded denim products dominate the market with around 60 percent share of the market. The share of brands in the denim market stands at 40 percent. Most of the unbranded players operate on the lower price segment of the market where awareness of the quality of the fabric, finishing and washes, design, and fit is relatively low.

Balance Sheet

 

Mar '14

Mar '13

Mar '12

Mar '11

              Mar '10

Sources Of Funds

 

 

 

 

 

Total Share Capital

45.55

45.55

45.55

45.55

45.55

Equity Share Capital

45.55

45.55

45.55

45.55

45.55

Reserves

170.96

138.04

113.38

99.88

82.54

Networth

216.51

183.59

158.93

145.43

128.09

Secured Loans

379.95

365.48

254.18

255.89

248.30

Unsecured Loans

8.59

0.00

0.00

6.34

19.34

Total Debt

388.54

365.48

254.18

262.23

267.64

Total Liabilities

605.05

549.07

413.11

407.66

395.73

Application Of Funds

 

 

 

 

 

Gross Block

668.81

513.80

433.47

366.79

271.79

Less: Accum. Depreciation

216.46

172.60

132.09

100.36

75.03

Net Block

452.35

341.20

301.38

266.43

196.76

Capital Work in Progress

0.00

54.06

4.67

14.55

65.96

Investments

4.16

0.37

0.28

3.41

3.41

Inventories

138.50

119.76

98.42

121.32

68.03

Sundry Debtors

121.42

91.17

69.47

55.01

128.35

Cash and Bank Balance

26.07

19.93

15.50

2.51

1.62

Total Current Assets

285.99

230.86

183.39

178.84

198.00

Loans and Advances

49.20

50.96

36.26

37.11

30.77

Fixed Deposits

0.00

0.00

0.00

5.29

3.22

Total CA, Loans & Advances

335.19

281.82

219.65

221.24

231.99

Current Liabilities

180.11

121.91

106.58

85.77

89.36

Provisions

6.55

6.46

6.28

12.18

13.02

Total CL & Provisions

186.66

128.37

112.86

97.95

102.38

Net Current Assets

148.53

153.45

106.79

123.29

129.61

Total Assets

605.04

549.08

413.12

407.68

395.74

Contingent Liabilities

101.39

107.69

58.07

42.73

5.61

Book Value (Rs)

47.53

40.31

34.89

3.19

2.81

Profit and Loss Account

 

Mar '14

Mar '13

Mar '12

Mar '11

Mar '10

Income

 

 

 

 

 

Sales Turnover

893.75

703.12

573.84

507.40

375.83

Net Sales

893.75

703.12

573.84

507.40

375.83

Other Income

3.99

1.53

4.82

1.03

-1.07

Stock Adjustments

12.17

37.59

-7.06

15.96

-6.82

Total Income

909.91

742.24

571.60

524.39

367.94

Expenditure

 

 

 

 

 

Raw Materials

658.31

542.71

408.65

397.77

258.21

Power & Fuel Cost

55.40

44.70

38.32

32.61

28.30

Employee Cost

31.04

25.44

19.23

14.70

13.02

Other Manufacturing Expenses

0.00

0.00

0.00

4.81

2.21

Selling and Admin Expenses

0.00

0.00

0.00

5.65

7.22

Miscellaneous Expenses

28.50

20.94

17.99

0.67

1.14

Total Expenses

773.25

633.79

484.19

456.21

310.10

Operating Profit

132.67

106.92

82.59

67.15

58.91

PBDIT

136.66

108.45

87.41

68.18

57.84

Interest

32.03

31.76

27.84

16.78

16.91

PBDT

104.63

76.69

59.57

51.40

40.93

Depreciation

49.73

40.92

33.26

25.36

22.60

Profit Before Tax

54.90

35.77

26.31

26.04

18.33

Extra-ordinary items

0.00

0.00

0.00

-0.13

-0.04

PBT (Post Extra-ord Items)

54.90

35.77

26.31

25.91

18.29

Tax

15.60

4.71

7.51

8.55

6.70

Reported Net Profit

39.31

31.05

18.79

17.35

11.58

Total Value Addition

114.94

91.08

75.54

58.44

51.89

Equity Dividend

5.47

5.47

4.55

0.00

0.00

Corporate Dividend Tax

0.93

0.93

0.74

0.00

0.00

Per share data (annualised)

 

 

 

 

 

Shares in issue (lakhs)

455.49

455.49

455.49

4,554.91

4,554.91

Earning Per Share (Rs)

8.63

6.82

4.13

0.38

0.25

Equity Dividend (%)

12.00

12.00

10.00

0.00

0.00

Dividend and Bonus History

Index and Company Price Movement Comparison

Technical Indicators

Symbol

Value

Action

RSI(14)

63.615

Buy

STOCH(9,6)

66.966

Buy

STOCHRSI(14)

78.714

Overbought

MACD(12,26)

4.940

Buy

ADX(14)

24.813

Buy

Williams %R

-16.703

Overbought

CCI(14)

97.4447

Buy

ATR(14)

5.2893

High Volatility

Highs/Lows(14)

6.6357

Buy

Ultimate Oscillator

58.764

Buy

ROC

4.981

Buy

Bull/Bear Power(13)

7.0360

Buy

Important Ratios(YoY)
  • PBIT – 9.23 v/s 9.36

  • RoCE – 14.36 v/s 13.36

  • RoE – 19.65 v/s 16.25

  • Net Profit Margin – 4.37 v/s 4.40

  • Return on net worth – 18.51 v/s 16.91

  • D/E Ratio – 1.76 v/s 1.99

  • Interest Cover – 2.71 v/s 2.33

  • Current Ratio – 0.83 v/s 0.86

  • Reserves – 170.96 cr v/s 138.04

  • PAT – 39.31 cr v/s 31.05 cr

  • Total assets – 605.04 cr v/s 579.08 cr

  • Net sales – 893.75 cr v/s 703.12 cr

  • Book Value – 47.53 cr v/s 40.31 cr

Simple Moving Average

Days

BSE

NSE

30

64.18

64.15

50

65.09

65.06

150

56.31

56.27

200

53.38

53.35

Investment Rationalize
  • Nandan Denim Ltd. is one of India fastest growing denim manufacturer with a good product portfolio and an impressive clientele which includes both major domestic and international players such as Spyker, Mufti, Gini & Jony Color Plus and textile products manufacturers such as Tirupati Denim and Vardhaman Textiles and Ralph Lauren, Armani Exchange, Talbots, Calvin Klein, Tommy Hilfeger, Target, Anntaylor, Carrefour and Polo and its current market capitalisation stands at Rs.366.44 crore.

  • NDL’s denim fabric manufacturing capacity has increased to 110 mmpa (mn metres per annum) – the highest in India. The company plans to cater to the growing local and global demand with the expanded capacity.

  • Owing to lack of premium products and low export contribution, the company focuses primarily on the low-mid end of denim fabrics where realisations range from 115- 130/metre (domestic market); premium products fetch realisations ranging from 160- 250/metre which will help to reduce market competition in the particular segment.

  • Increase in manufacturing cost in major denim manufacturing nations such as China and Pakistan will help the company to explore more opportunities from around the world. The exports of its products to West and South East Asia, Europe, and the Americas will add to the revenue and profits of the company.

  • NDL’s Revenue has grown at a CAGR of 18.9% and PAT has grown at a CAGR of 24.5% in the last five years, where the industry was struggling a lot.

  • India is a country were majority of population is in between age group of 18-40 years as well as increase in per capita expenditure in denims and per person usage of denims in India is far below when compared with other developing and developed countries which will add to the growth prospects of the company.

  • Companies backward integration model and reduction in cotton prices and reducing cash conversion cycle and working capital cycle will guarantee good profit margins and positive cash flow. And NDL’s order book ensures good and healthy sales and growth of the company.

  • NDL’s have a healthy ROE of 19.65 % and Price to Sales Ratio stands at 0.41% which ensures the company is available at a discounted price.

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This report is only for the information of our customers. Recommendations, opinions, or suggestions are given with the understanding that readers acting on this information assume all risks involved. The information provided herein is not to be construed as an offer to buy or sell securities of any kind. ATS and/or its group companies do not as assume any responsibility or liability resulting from the use of such information.

 

 

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