Lahoti Overseas - Rs.14.00
Incorporated in 1995, Lahoti Overseas Limited (Lahoti) is an ISO 9001:2000 certified company, mainly engaged in export trading of cotton yarn from India's leading spinning mills. Starting from open ended yarns, Lahoti's product range covers a wide variety of cotton yarns including carded and combed ring spun yams of coarse and fine counts, ply yarns, special yarns and also grey fabrics. Lahoti’s major exports are to South Korea, China, Japan, Hong Kong, Malaysia, Indonesia and Vietnam. It has successfully started exports to USA, Europe and South American countries and has also added new markets in the post quota scenario.
The removal of quota regime has created enormous opportunities, especially for the Indian textile industry as India has advantage of good quality & cheap raw material, skilled labour and modern technology as well. Taking clue from this emerging trend, Lahoti has drawn an ambitious growth plan to enter the growing markets of made-ups and home textiles, is putting up a weaving project for the manufacture of wide width grey fabrics to start the expansion drive estimated to cost around Rs.37 cr. and targeted to be completed by the end of this financial year. It plans forward and backward integration to set up a composite unit to manufacture and market a range of made-ups and home textiles in future.
The Union Budget has given importance to the Textile industry and has provided various fiscal incentives and other measures to boost the textile industry. The continuance of the TUF Scheme and the added subsidies for textile processing are some of the positive developments. For FY05, its sales witnessed degrowth of 18% to 148 cr. and NP also declined 20% to 2.40 cr. as the company paid Keyman insurance premium to the tune of Rs.1.63 cr. It declared 25% dividend on an EPS of around Rs.5. Considering all factors, Lahoti can end FY06 with Sales of Rs.200 cr. and NP of 5 cr., which means an EPS of Rs.2 on its current equity of Rs.5 cr. on the FV of Rs.2 per share. Long term investors can buy the scrip at current levels with a price target of Rs.20 (40% appreciation) in 12~15 months.
The removal of quota regime has created enormous opportunities, especially for the Indian textile industry as India has advantage of good quality & cheap raw material, skilled labour and modern technology as well. Taking clue from this emerging trend, Lahoti has drawn an ambitious growth plan to enter the growing markets of made-ups and home textiles, is putting up a weaving project for the manufacture of wide width grey fabrics to start the expansion drive estimated to cost around Rs.37 cr. and targeted to be completed by the end of this financial year. It plans forward and backward integration to set up a composite unit to manufacture and market a range of made-ups and home textiles in future.
The Union Budget has given importance to the Textile industry and has provided various fiscal incentives and other measures to boost the textile industry. The continuance of the TUF Scheme and the added subsidies for textile processing are some of the positive developments. For FY05, its sales witnessed degrowth of 18% to 148 cr. and NP also declined 20% to 2.40 cr. as the company paid Keyman insurance premium to the tune of Rs.1.63 cr. It declared 25% dividend on an EPS of around Rs.5. Considering all factors, Lahoti can end FY06 with Sales of Rs.200 cr. and NP of 5 cr., which means an EPS of Rs.2 on its current equity of Rs.5 cr. on the FV of Rs.2 per share. Long term investors can buy the scrip at current levels with a price target of Rs.20 (40% appreciation) in 12~15 months.
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