About the company –
Suditi Industries Limited is an India-based company, which is engaged in the business of processing and manufacturing of knitted hosiery fabrics and ready-made garments.
The Company owns “Official Apparel Licensee” for FC Barcelona; Manchester City and MTV. The Company manufactures various products, including clothing accessories, textile garments, Knitted cotton textile products, crocheted cotton textile products, knitted synthetic textile products and crocheted synthetic textile products.
The Company offers knitted garments for men, women and kids in various categories, including casual wear, sportswear and active wear.
The Company also provides casual fashionable clothing for men and women under the “Riot” brand name through brand outlets in Mumbai, Pune, Ahmedabad, Aurangabad, Nasik, Vadodara and Latur.
The Company also provides contemporary fashion and style garments for women under the “Indianink” brand name. It provides a range of print techniques, including reactive, discharge, disperse and pigment prints.
Industry outlook –
Industry Size: The textile industry employs about 40 million workers and 60 million indirectly. India’s overall textile exports during FY 2015-16 stood at US$ 40 billion. The Indian Textile Industry is currently estimated at around US$ 108 billion and is expected to reach US$ 223 billion by 2021. The textile industry contributes around 5% to India’s GDP and a significant 14% to the overall Index of Industrial Production (IIP). Even if the company targets to get just 0.1% of the market share, the same would be 600 crs of topline.
Govt Initiatives:
1. India’s first integrated textiles city, which will largely cater to the export market and build a brand for Indian textiles abroad, is likely to be set up in the state of Andhra Pradesh
2. The Government of India has started promotion of its ‘India Handloom’ initiative on social media like Facebook, Twitter with a view to connect with customers.
Business Model –
Revenue is generated from 3 streams being “Processed Fabrics”, “Ready Made Garments” and “Garments & Apparels (Retail Division)”
Fabrics: Knitting, Dyeing, Printing & Finishing are the 4 stages in which fabrics division works with.
Ready Made: Garmenting being their main activity under this division covering cutting, stitching, printing, washing, embroidery.
Retail: The Company owns 2 brands “Riot” & “Indianink” and is the Official Apparel Licensee for “FC Barcelona”, “Manchester City” & “MTV”.
Outlook –
1. Retail division has given a significant contribution towards the growth in the sales. The improved economic conditions in the country augur well for the textile sector and in general there is optimism prevailing all over the country, even though the situations continued to remain grim in the other part of the world.
2. The company has continued to take necessary measures to strengthen the operations. Many unviable outlets selectively chosen in various formats will either discontinued or converted into own stores to bring better management in the operation.
3. The company is now giving major thrust to expand the business through on line sales network like Flipkart, Jabbong, Myntra etc. Further the company is also using other social network to expand the reach of the products to actual users.
4. The biggest growth is going to come from the sale of Apparel of FC Barcelona & Manchester City as the company has Exclusive tie up to sell in India. For a cricket mad nation, the big trigger seen is youth showing huge interest in football in India.
Target –
The Chairman of the company – Pawan Agarwal has given ambitious target for 2020. He plans to achieve a topline of 500 crs from present 100 crs. He has in the past “walked the talk”. The current market cap of the company is 100 crs which is 1x of revenue. At CMP of 65, the stock is highly undervalued.
Disc: You can rightly assume that i hold the shares of the company.
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