S K S Textiles Limited

Incorporated in 1997, S K S Textiles Limited is Mumbai-based ISO 9000:2015 certified Company engaged in the business of Textile Manufacturing and Trading. SKS Textiles manufacture grey fabrics and finished fabrics for shirting, suiting, and other accessories for its own brand and also on outsourcing basis for other fabric / garment companies. Company manufacture various fabrics like 100% Cotton - Lycra and Non-Lycra, Blended Cotton Suiting – Chief Value Cotton, Polyester Cotton, 100% Cotton Yarn Dyed , Polyester Viscose, Terry Rayon Suiting and Mock Linen under its brand names – Pierricarrlo, Cotbbelly’s and Earthen Belly. Company also undertakes corporate orders for Finished Fabrics and Grey Fabrics for corporate brands such as Raymond, Arvind, Siyaram's, Digjam Limited, etc. SKS Textiles manufacturing unit is located at Sonale, Bhiwandi in Maharashtra. Company also have a Packing and Storage unit at Kalher, Bhiwandi in Maharashtra. On financial performance front, SKS has posted turnover/net profits of Rs. 112.88 cr. / Rs. 0.82 cr. (FY13), Rs. 120.43 cr. / Rs. 1.09 cr. (FY14), Rs. 131.76 cr. / Rs. 1.09 cr. (FY15), Rs. 147.82 cr. / Rs. 1.45 cr. (FY16) and Rs. 158.75 cr. / Rs. 1.61 cr. (FY17). For first half of the current fiscal, it has reported net profit of Rs. 1.12 cr. on a turnover of Rs. 75.16 cr. Thus it has shown higher net for first half and is a bit surprising. For last three fiscals it has posted an average EPS of Rs. 5.21 and an average RoNW of 5.13% on an equity base of Rs. 1.03 crore. Issue is priced at a P/BV of 1.38 on the basis of its NAV of Rs. 108.34 as on 30.09.17 and at a P/BV of 1.36 on the basis of its post issue NAV of Rs. 110.60. If we annualize latest earnings and attribute it on fully diluted equity post issue, then asking price is at a P/E of around 22 against industry average of 28. Thus issue appears fully priced. On merchant banker’s front, this is the 21st mandate from its stable. Out of last 10 listings, 3 opened at discount, 1 at par and the rest at a premium ranging from 0.2% to 20% on the day of listing. As per financials, company's growth is good, RoNW is 5.13% for last three fiscals and issue looks fully priced as per latest earnings. Growth of the company is good, but textile sector has some big players so very high competition. So, we give NEUTRAL rating to this SME IPO.

• 1 Mr. Sukanraj Shah
• 2 Mr. Vicky Shah
• 3 Mr. Sahil Shah
• 4 Sukanraj Bhabhutmal Shah HUF