CMP 432.25
Target Price 493.00
ISIN: INE040D01038
DECEMBER 9th
2014
MAYUR UNIQUOTERS LIMITED
Result Update (PARENT BASIS): Q2 FY15
BUYBUYBUYBUY
Index Details
Stock Data
Sector Textiles
BSE Code 522249
Face Value 5.00
52wk. High / Low (Rs.) 485.00/159.05
Volume (2wk. Avg. Q.) 33000
Market Cap (Rs. in mn.) 18719.02
Annual Estimated Results (A*: Actual / E*: Estimated)
YEARS FY14A FY15E FY16E
Net Sales 4696.14 5414.65 6194.36
EBITDA 949.72 1134.85 1311.11
Net Profit 567.97 696.77 804.72
EPS 26.23 16.09 18.58
P/E 16.48 26.87 23.26
Shareholding Pattern (%)
1 Year Comparative Graph
MAYUR UNIQUOTERS LIMITED BSE SENSEX
SYNOPSIS
Mayur Uniquoters Ltd established in 1994 with an
installed capacity of 400,000 Linear Meters per month
and the company in the Inc. India 500 India’s best
performing Mid Sized Companies for the year 2013.
During the quarter, Net profit jumps to Rs. 156.37
million, an increase of 24.78% y-o-y against Rs. 125.32
million in the corresponding quarter ending of
previous year.
The company registered a growth of 10.65% y-o-y in
net sales to Rs. 1314.18 million in Q2 FY15 from Rs.
1187.72 million in the corresponding quarter last year.
Operating profit is at Rs. 262.44 million as against Rs.
229.39 million in the corresponding period of the
previous year, registered a growth of 14.41% y-o-y.
Profit before tax (PBT) at Rs. 223.69 million in Q2
FY15 compared to Rs. 193.33 million in Q2FY14,
registered a growth of 15.70%.
The company has declared second interim dividend of
Rs. 0.75/- per share i.e., 15% per Share on face value of
Rs. 5.00/- each for financial year 2014-15.
For the half year end of FY15, the company registered
a growth of 13.76% in Net sales to Rs. 2559.91 million
from Rs. 2250.36 million during the half year ended of
FY14.
Net profit grew by 27.53% to Rs 306.18 million for the
end of H1 FY15 from Rs 240.09 million for the end of
H1 FY14.
Net Sales and PAT of the company are expected to
grow at a CAGR of 18% and 23% over 2013 to 2016E
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 432.25 18719.02 26.23 16.48 5.93 92.50
Siyaram Silk Mills Ltd 798.00 7480.50 72.48 11.01 2.02 80.00
Raymond Ltd 560.80 34422.40 13.88 40.40 3.13 20.00
Vardhman textiles Ltd 435.25 27704.50 82.88 5.25 0.97 110.00
Recommendation & Analysis - ‘BUY’
For the 1st quarter of accounting year 2013-14, Mayur Uniquoters Ltd posted a 11.73% growth in total income to
Rs. 1330.43 million from Rs. 1190.78 million in previous year period. Profit before tax (PBT) at Rs. 223.69
million in Q2 FY15 compared to Rs. 193.33 million in Q2FY14, registered a growth of 15.70%. Net profit jumps to
Rs. 156.37 million, an increase of 24.78% y-o-y against Rs. 125.32 million in the corresponding quarter ending of
previous year. Operating profit is at Rs. 262.44 million as against Rs. 229.39 million in the corresponding period
of the previous year, registered a growth of 14.41% y-o-y.
Mayur Uniquoters Ltd has recognized amongst the fastest-growing companies in the country. The company’s
consistent focus on its core production areas and target segments along with the unwavering dedication of
team are the most important reasons behind the growth. We expect that the company surplus scenario is likely
to continue for the next three years, will keep its growth story in the coming quarters also. We expect the
company to post a CAGR of 18% and 23% in its top-line and bottom-line respectively. Hence, we recommend
‘BUY’ for ‘ MAYUR UNIQUOTERS LIMITED’ with a target price of Rs. 493.00 on the stock.
QUARTERLY HIGHLIGHTS (PARENT BASIS)
Results updates- Q2 FY15,
Mayur Uniquoters limited, India’s leading Manufacturer
of Artificial Leather/ PVC Viynl has focuses on servicing
the various customers segments such as export
(general & OEM’s), Auto(OEM’s), Footwear, upholistery,
auto replacement and has a PAN India presence with
offices in all the major business cities, serving
customers across the globe, reported its financial
results for the quarter ended 30th SEPTEMBER, 2014.
The company has a turnover of Rs. 1314.18 million for the 2nd quarter of the current year 2013-14 as against Rs.
1187.72 million in the corresponding quarter of the previous year. The company has reported an EBITDA of Rs.
262.44 million an increased by 14.41% over prior period of previous year. In Q2 FY15, net profit is at Rs. 156.37
million against Rs. 125.32 million in Q2 FY14. The company has reported an EPS of Rs. 3.61 for the 2nd quarter as
against an EPS of Rs. 5.79 in the corresponding quarter of the previous year. The value of EPS has been restated
due to subdivision of one equity shares of Rs. 10/ each in to two shares of Rs.5.00/each (with effect from 26th
Sept 2013).
Rs. In million SEP-14 SEP-13 % Change
Net Sales 1314.18 1187.72 10.65
PAT 156.37 125.32 24.78
EPS 3.61 5.79 (37.61)
EBITDA 262.44 229.39 14.41
Break up of Expenditure:
During the quarter, total Expenditure rose by 12 per cent mainly on account of increased Cost of material
consumed by 14%, Employee benefit expenses 37%, other expenses by 11%, Depreciation & Amortization
Expense 75% are the main attribute for the growth of expenditure when compare to corresponding quarter of
previous year. Total expenditure in Q2 FY15 was at Rs. 1097.56 million as against Rs. 978.31 million in Q2 FY14.
Break up of Expenditure
(Values in Millions)
Q2 FY15 Q2 FY14
Cost of Material Consumed 898.87 788.77
Employee Benefit Expenses 62.08 45.38
Depreciation & Amortization
Expense 29.57 16.92
Other Expenses 129.75 116.78
COMPANY PROFILE
Mayur Uniquoters Ltd has established and started operations in the year 1994 with an installed capacity of
400,000 Linear Meters per month Mayur Uniquoters limited, India’s leading Manufacturer of Artificial Leather/
PVC Viynl, has been included in the list of Inc. India 500 India's Best performing Mid Sized Companies for the
year 2013. The coveted list features the top 500 mid-sized companies in India. The company has recognized
amongst the fastest-growing companies in the country. The company’s consistent focus on its core production
areas and target segments along with the unwavering dedication of Team are the most important reasons behind
the growth.
Mayur did backward integration in manufacturing of knitted fabric. Knitted fabric is the largest input value-wise,
after chemicals like PU, PVC, etc. Mayur is in the process of installing 5th and 6th coating line at village Dodhsar,
Govindgarh taking the production capacity to the new heights with total capacity of 3.05 million linear meters
per month.
Products for Various Applications
• Automotive
• Footwear
• Furnishing
• Leather Goods & Garments
Distribution Network
Mayur supplies synthetic leather to both domestic as well as overseas clients. Synthetic leather is used in
industries such as footwear, automobile seats, furnishings, sports goods, ladies’ bags, and a number of fashion
accessories.
Mayur, a NSE & BSE listed business enterprise has a PAN India presence with offices in all the major business
cities, serving customers across the globe. Mayur is a preferred original equipment manufacturer (OEM) supplier
to national and international automobile giants like Ford (USA), Chrysler (USA), Maruti Suzuki, Tata Motors,
M&M, Honda Motorcycles and Scooter Limited and RP Automobiles. Automotive segment is the second largest
contributor to revenues after the footwear industry.
The footwear industry is the largest consumer of Mayur’s synthetic leather; India is the world’s second largest
footwear producing country, second to China and the third largest market. Mayur also supply to leading footwear
manufacturers like Bata, Action Group, Liberty Shoes, Paragon, VKC Group, Lancer Footwear and Relaxo
Footwear.
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
• Tej shoe
• SRN Enterprises
• Poddar Footwear
• Elegant
Ongoing Clients
• BMW
• GENERAL MOTORS
• DAIMLER.
FINANCIAL HIGHLIGHT (PARENT BASIS) (A*- Actual, E* -Estimations & Rs. In Millions)
Balance Sheet as at March31, 2013 -2016E FY-13A FY-14A FY-15E FY-16E
I EQUITY AND LIABILITIES
A) Shareholder's Funds
a) Share Capital 108.26 108.26 810.93 810.93
b) Reserves and Surplus 1076.41 1502.73 1953.55 2490.77
Sub -Total- Shareholder fund 1184.67 1610.99 2764.48 3301.70
B) Non Current Liabilities
a) Long- Term Borrowings 45.92 156.80 148.96 143.00
b) Differed Tax Liability 35.54 59.14 73.93 90.19
c) Long Term Provisions 0.61 1.41 2.43 2.96
Sub-Total Non Current Liabilities 82.07 217.35 225.31 236.15
C) Current Liabilities
a) Short Term Borrowings 164.02 202.09 185.92 167.33
b) Trade Payables 473.84 631.28 776.47 939.53
c) Other Current Liabilities 170.57 284.14 346.65 415.98
d) Short Term Provisions 59.75 58.02 47.58 50.43
Sub-Total - Current Liabilities 868.18 1175.53 1356.62 1573.28
TOTAL EQUITY LIABILITIES ( A + B + C ) 2134.92 3003.87 4346.41 5111.13
II ASSETS
D) Non- Current Assets
Fixed Assets
i. Tangible Assets 546.67 976.64 1201.27 1429.51
ii. Capital work In Progress 189.07 265.55 305.38 335.92
a) Sub Total- Fixed Assets 735.74 1242.19 1506.65 1765.43
b) Non-Current Investment 0.66 0.66 0.66 0.66
c) Long Term Loans & Advances 36.51 14.73 28.72 37.92
d) Other Non Current Assets 10.96 4.86 6.22 7.59
Sub -Total- Non- Current Assets 783.87 1262.44 1542.25 1811.59
E) Current Assets
a) Current Investment 135.89 97.80 801.45 921.67
b) Inventories 442.34 637.73 752.52 880.45
c) Trade Receivables 564.51 671.09 859.00 1047.97
d) Cash & Cash Equivalents 106.51 134.27 150.38 165.42
e) Short- Term Loans and Advances 67.89 125.32 147.88 171.54
f) Other Current Assets 33.91 75.22 92.93 112.49
Sub -Total Current Assets 1351.05 1741.43 2804.16 3299.54
TOTAL ASSETS ( E+ F ) 2134.92 3003.87 4346.41 5111.13
Annual Profit & Loss Statement for the period of 2013 to 2016E
Value(Rs.in.mn) FY13A FY14A FY15E FY16E
Description 12m 12m 12m 12m
Net Sales 3805.39 4696.14 5414.65 6194.36
Other Income 27.36 17.48 57.33 72.24
Total Income 3832.75 4713.62 5471.98 6266.60
Expenditure -3114.91 -3763.90 -4337.13 -4955.49
Operating Profit 717.84 949.72 1134.85 1311.11
Interest -24.35 -42.98 -27.94 -30.73
Gross profit 693.49 906.74 1106.91 1280.38
Depreciation -51.70 -70.17 -115.78 -138.94
Profit Before Tax 641.79 836.57 991.13 1141.45
Tax -205.53 -268.60 -294.37 -336.73
Net Profit 436.26 567.97 696.77 804.72
Equity capital 108.26 108.26 216.53 216.53
Reserves 1076.41 1502.73 1953.55 2490.77
Face value 10.00 5.00 5.00 5.00
EPS 40.30 26.23 16.09 18.58
Note: Earning per share has been restated due to subdivision of one equity shares of Rs. 10/ each in to two shares of Rs.5/each.
(w.e.f. 26th
Sept 2013).
Quarterly Profit & Loss Statement for the period of 31 MAR, 2014 to 31 DEC, 2014E
Value(Rs.in.mn) 31-Mar-14 30-Jun-14 30-Sep-14 31-Dec-14E
Description 3m 3m 3m 3m
Net sales 1224.62 1245.73 1314.18 1358.86
Other income 4.29 12.88 16.25 21.94
Total Income 1228.91 1258.61 1330.43 1380.80
Expenditure -950.80 -1002.26 -1067.99 -1100.68
Operating profit 278.11 256.35 262.44 280.12
Interest -3.27 -6.95 -9.18 -6.24
Gross profit 274.84 249.40 253.26 273.88
Depreciation -20.68 -28.08 -29.57 -31.05
Profit Before Tax 254.16 221.32 223.69 242.83
Tax -68.45 -71.51 -67.32 -71.63
Net Profit 185.71 149.81 156.37 171.20
Equity capital 108.26 216.53 216.53 216.53
Face value 5.00 5.00 5.00 5.00
EPS 8.58 3.46 3.61 3.95
Ratio Analysis
Particulars FY13A FY14A FY15E FY16E
EPS (Rs.) 40.30 26.23 16.09 18.58
EBITDA Margin (%) 18.86 20.22 20.96 21.17
PBT Margin (%) 16.87 17.81 18.30 18.43
PAT Margin (%) 11.46 12.09 12.87 12.99
P/E Ratio (x) 10.73 16.48 26.87 23.26
ROE (%) 36.83 35.26 32.11 29.72
ROCE (%) 55.18 51.77 49.93 48.05
Debt Equity Ratio 0.18 0.22 0.15 0.11
EV/EBITDA (x) 6.47 9.99 15.95 13.68
Book Value (Rs.) 109.43 74.40 50.11 62.52
P/BV 3.95 5.81 8.63 6.91
Charts
OUTLOOK AND CONCLUSION
� At the current market price of Rs. 432.25, the stock P/E ratio is at 26.87 x FY15E and 23.26 x FY16E
respectively.
� Earning per share (EPS) of the company for the earnings for FY15E and FY16E is seen at Rs.16.09 and
Rs.18.58 respectively.
� Net Sales and PAT of the company are expected to grow at a CAGR of 18% and 23% over 2013 to 2016E
respectively.
� On the basis of EV/EBITDA, the stock trades at 15.95 x for FY15E and 13.68 x for FY16E.
� Price to Book Value of the stock is expected to be at 8.63 x and 6.91 x respectively for FY15E and FY16E.
� We recommend ‘BUY’ in this particular scrip with a target price of Rs. 493.00 for Medium to Long term
investment.
INDUSTRY OVERVIEW
India is the one of the world's largest producers of textiles and garments. Abundant availability of raw materials
such as cotton, wool, silk and jute as well as skilled workforce have made the country a sourcing hub. It is the
world's second largest producer of textiles and garments. The Indian textiles industry accounts for about 24 per
cent of the world's spindle capacity and eight per cent of global rotor capacity. The potential size of the Indian
textiles and apparel industry is expected to reach US$ 223 billion by 2021.
The textiles industry has made a major contribution to the national economy in terms of direct and indirect
employment generation and net foreign exchange earnings. The sector contributes about 14 per cent to
industrial production, four per cent to the gross domestic product (GDP), and 27 per cent to the country's foreign
exchange inflows. It provides direct employment to over 45 million people. The textiles sector is the second
largest provider of employment after agriculture. Thus, the growth and all round development of this industry
has a direct bearing on the improvement of India's economy.
India has overtaken Italy, Germany and Bangladesh to emerge as the world's second largest textile exporter, as
per recent data released by 'UN Comtrade'. India's share in Global Textiles increased by 17.5 per cent in 2013
compared to 2012.
The Textiles Vision Document formulated by the National Manufacturing Competitiveness Council (NMCC) has
projected that textiles exports from India will touch US$ 300 billion by the year 2024-25.
Market Size
o The Indian textiles industry is set for strong growth, buoyed by strong domestic consumption as well as
export demand.
o The most significant change in the Indian textiles industry has been the advent of man-made fibres (MMF).
India has successfully placed its innovative range of MMF textiles in almost all the countries across the globe.
MMF production recorded an increase of three per cent during the period April-July 2014.
o Cotton yarn production increased by four per cent during April-July 2014. Blended and 100 per cent non-
cotton yarn production increased by five per cent during April-July 2014.
o Cloth production by mill sector registered a growth of six per cent during April 2013-July 2014.
o Cloth production hosiery sector increased by eight per cent during April-July 2014. Total cloth production
grew by two per cent during April-July 2014.
Investments
The textiles sector has witnessed a spurt in investment during the last five years. The industry (including dyed
and printed) attracted foreign direct investment (FDI) worth US$ 1,495.07 million during April 2000 to
September 2014.
Some of the major investments in the Indian textiles industry are as follows:
� Arvind Lifestyle plans to invest Rs 1260.00 million (US$ 20.37 million) as capital expenditure this fiscal to
expand its footprint. "This company is looking at Rs 1260.00 million (US$ 20.37 million) capex this fiscal, up
from Rs 900.00 million (US$ 14.54 million) spent last fiscal, as plan to open around 200 stores,"reported by,
Managing Director and Chief Executive, Arvind Lifestyle.
� Sangam India plans to venture into the seamless garment segment with an investment of Rs 1200.00 million
(US$ 19.39 million). The company plans to set up 10,000 spindles for slub yarn and a mercerise unit, besides
modernising the processing division.
� Non-resident Indian (NRI) businessman Mr Apurv Bagri has acquired controlling stake in leading Indian
denim maker Spykar Lifestyle. Mr Bagri's Metmin Investment Holdings has bought a 30 per cent stake from
private equity (PE) firm Avigo Capital, which owns a majority stake in Spykar.
� Arvind Lifestyle Brands plans to foray into the children's wear retail segment in India, as it has signed a
franchisee agreement worth US$ 1.8 billion with US-based The Children's Place.
� Private Equity (PE) firm Everstone plans to invest Rs 1000.00 million (US$ 16.16 million) for an undisclosed
minority stake in the fashion label of designer Ritu Kumar.
Government Initiatives
The Indian government has come up with a number of export promotion policies for the textiles sector. It has
also allowed 100 per cent FDI in the Indian textiles sector under the automatic route.
Some of initiatives taken by the government to further promote the industry are as under:
• The Ministry of Textiles plans to ink a deal with Flipkart to provide an online platform to handloom weavers
to sell their products.
• The Ministry of Textiles will implement the scheme for in-situ upgradation of plain powerlooms for SSI sector
in Surat and Ahmedabad powerloom clusters in Gujarat.
• The government has taken a number of initiatives for the welfare and development of the weavers and the
handloom sector. Under revival, reform and restructuring (RRR) package, financial assistance to the tune of
Rs 10190.00 million (US$ 164.72 million) has been approved and the Indian government has released Rs
7410.00 million (US$ 119.78 million).
• Encouraged by the turnaround in textiles exports, the Government of India plans to set up a US$ 60 billion
target for the current financial year, a jump of over 30 per cent from the previous financial year.
• The Cabinet Committee on Economic Affairs (CCEA) has approved an Integrated Processing Development
Scheme (IPDS) with a corpus of Rs 5000.00 million (US$ 80.82 million) to make textiles processing units
more environment-friendly and globally competitive.
Road Ahead
The Indian textiles industry is set for strong growth, buoyed by both strong domestic consumption as well as
export demand. The industry is expected to reach US$ 220 billion by 2020, according to estimates by Alok
Industries Ltd.
With consumerism and disposable income on the rise, the retail sector has experienced a rapid growth in the
past decade with several international players like Marks & Spencer, Guess and Next having entered the Indian
market. The organised apparel segment is expected to grow at a compound annual growth rate (CAGR) of more
than 13 per cent over a 10-year period.
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the recipients’ investment decision based on this document.
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