Surat Textile Mills - CMP 3.99 Dated 30March2017

Surat  Textile Mills -  BSE Code - 530185 Recomended @ 3.99

Surat Textile Daily Chart

Surat Textile Mills Ltd  Weekly Chart

Technical View

May 08 2017 : Surat Textile Mills has given a channel break out above 6.4. check the following chart, Closing above 6.4 on closing basis Surat can double in 6 months time from here. check the chart here -  https://invst.ly/3wseo

April 01 2017 - Surat Textile Mills is oscillating between 3.8 and 5. There is strong Support at 3.78 - 3.95 and Resistance at 5.  Keep a keen watch on the stock as it is bottoming out and is bottom of the Range. 

Nov2016 - Technically  Surat Textile Mills (STM) gave out a breakout from downward channel and reversed the trend on 23rd of September with Good volume to Close on 4.1 to touch a high of 5.2 Rupees. after the break the stock is consolidating in narrow range of 4.4 and 5 which will augur well for STM. 

Fundamental View

Surat Textile Mills Limited is engaged in the manufacturing and selling of polyester filament yarn, polyester chips and spun yarn. The Company operates through three segments: Yarns, Art & Artifacts, and Construction. The Company produces ring spun yarn for domestic market in various ranges, such as 100% polyester, 100% viscose, 100% modal, polyester viscose blend, polyester modal blend in count range of Ne30s to Ne 100s. The Company has doubling, two for one twister (TFO) and yarn gass singing plant with approximately 11,450 spindles in Khadoli village, Silvassa (Dadra and Nagar Haveli). The Company has its manufacturing facilities located at Vareli village, Taluka Palsana, Surat District, and Jolwa village, Taluka Palsana, Surat District.

The total revenue from opera ons for the year 2015-16 declined at `118.99 crore as compared to `129.84 crore in the previous year. The decline in revenue was primarily due to fall in Selling

Prices in tandem with fall in crude oil prices Our focus on operational efficiency with better working capital management and better network helped Company to remain competitive and improve our Earnings Before Interest, Deprecia ton and Tax (EBIDTA). EBIDTA for FY 16 was higher at `6.50 crore as compared to `5.54 crore in the previous year, registering a growth of about 17%. The profi t a? er tax for the FY 2016 also increased to `6.13 crore as compared to `2.56 crore in the previous year. Despite challenging business environment your Company’s total sales of chips in volume was higher at 16094 MT for the year 2015-16 as compared to 9034 MT in the previous year. In value terms sale of chips for FY 16 was higher at `12861.15 Lacs as compared to `8755.56 Lacs in the previous year. The overall produc tion of Chips was higher at 16427 MT during the year 2015-16 as compared to 10062 MT achieved in the previous year.

Revenues Declined from 129.85 in 14-15 to 118.99 in 15-16 due to falling prices. Surat Textile Mills was EBITA positive due to increased focus on Operations efficiency. EBITA was at 6.6 Crores compared to 5.54 in Previous Years i.e. Growth of 17% Profit after Tax was 6.12 Crore to 2.56 Crore in previous year. Sales Volume Increased to 16094 MT from 9034 MT.

Company has repaid Secured Rupee Term Loan from banks to the tune of `51.16 Lacs during the fi nancial year 2015-16. Which will save on outgo of interest cost/finance cost which will lead to better profits in coming quarter. 

We should have a track Surat Textile closely as increased operational efficiency 

and reduced interest cost will give boost to NP of the company, makes it a long term bet with Govt focus on Textile sector with Labor reforms worth 6000 Crore. Our Target is 8.5 Rupees in next 3 Quarters.

Update:

In Q3 2016 Surat Textile gave a better than expected result in-spite of  Demonetization. It will definitely give a good Annual Results.

Update 5th May 2017:
Today Surat Textile has give a break out on Weekly and Monthly Basis, I am expecting a good result from Surat in Jan-Mar 2017 Quarter, post the result its EPS is going to more that double on Annual Basis which will take this share to its all time high of 8.2 in coming 2-3 Months. Stay put and hope you will enjoy the profits.

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Disclaimer: This is not a call to buy / Sell the stock. I am trying and learn from stock market and this Analysis is only for Educational Purpose.