Seasons Textiles - Rs.14.00

Incorporated in 1986, Seasons Textiles Ltd (STL) is one of the leading manufacturers and exporters of home furnishing and fabrics based in North India. Shri Nanak Singh, Shri Inderjeet Singh Wadhwa and Smt. Neelam Wadhwa who were earlier running a partnership business in the name and style of M/s Singh Fabrics with an installed capacity of 40,000 metres per annum promoted STL. Subsequently, they kept on expanding and took the installed capacity to above 10,00,000 metres per annum. Today it is one of the reputed home furnishing and fabric suppliers to big retail chains in USA & Europe for Bed, Bath and Beyond Linen N Things etc.

STL’s manufacturing plant is located at Noida and is well equipped with the latest automatic shuttleless loom. To capitalise upon the growth opportunities arising out of the dismantling of the textile quota regime, STL implemented a project for installation of an additional capacity of 2,40,000 metres a year under the replacement cum modernization plan with the financial assistance of IDBI. Currently, the company is concentrating more on exports and intends to take it higher from the current level of 40% of sales. To capture the new markets, STL regularly participates in international fairs and exhibitions to showcase its design and trends matching capabilities to the international market. Moreover, it continuously works towards product development through designing, mix and match of colours and different kinds of yarns. It is in the process of further increasing its installed capacity and modernizing the plant which proves that it is fully geared up to meet the post quota regime challenges in coming years. For future growth, it has ambitious plan to set up a Rs.40 cr. home furnishings unit to be located on a 4 acre piece of land at Manesar, Near Gurgaon. Besides, its group company Seasons Furnishing is well poised to become a big player in the retail sector.

For FY05, STL reported flat numbers with Sales at Rs.28.50 cr. and NP of Rs.0.75 cr. due to production capacity constraints. But for FY06, it is estimated to post a much better performance due to higher capacity utilization and better operating efficiency. Incidentally, STL has a small equity of Rs.5.09 cr. and reserves of 7.50 cr. leads to a book value of Rs.25 of its share. Recently, to fund its expansion, the company made some preferential allotment of 15 lakh warrants @ Rs.15, which will dilute the equity to Rs.6.60 cr. on conversion. Although it’s recent, Sept.2005 numbers were not that great. Still, going by the half yearly numbers, STL is expected to report Sales of around Rs.35 cr. and NP of Rs.2 cr. for FY06. This will work out to an EPS of Rs.4 and diluted EPS of Rs.3. Its long-term prospects are much brighter and investors are strongly recommended to buy at current levels as the scrip can double in 12 months or so.