This is not a buy or sell recommendation.

We are in the process of compiling data

sheets of companies that we track / own so that in future we may use these for buying /
selling stocks of such companies. Reason for sharing is hopefully somebody who has
more information / insight may get in touch with us or for a healthy debate.

Premco Global
Date
Traded In
Face Value
CMP
EPS (TTM)
P/E
Market Cap
Enterprise Value
52 Week H/L
Website

: 14-Feb-14
: BSE B (530331)
: 10
: 44.25
: 25.25
: 1.75
: 14 Cr
: 21.32 Cr
: 46.4 / 21.05
: http://www.premcoglobal.com

Profile
Premco Global is a manufacturer of Woven and Knit Elastic and Non-Elastic Narrow
Fabric, Tape and Webbing for use in the Apparel, Lingerie, Sports-related, Medical,
Footwear, Luggage, Furnishing and Automotive industries.
The company has 4 manufacturing units at

Palghar, Maharastra
Dadra & Nagar Haveli, UT
Mumbai, Maharastra
Vapi, Gujarat

Clients

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Products
Elastic narrow fabrics are an important input to the undergarment industry. They are also
used in other garments i.e. shorts, jackets and skirts, moulded luggage, baby diapers,
sports goods, medical goods, etc.
Elastic narrow fabrics are made from an elastomeric yarn and yarns made from cotton,
polyester and nylon. More than 3000 different varieties of elastic fabrics are
manufactured however, based on manufacturing technology they can be classified as
woven and knitted. The fabric is expected to have the following properties:

Stretch ability
Shrink resistance
Durability to regular wash
Soft feel

Knitted elastic tapes are generally available in widths 8 mm, 12 mm, 20 mm and 25 mm.
Woven elastic tapes range in widths 25 mm, 32 mm and 38 mm. These elastic tapes are
primarily used for undergarments. The narrow fabric is made with or without logo along
the length depending on customers requirement.
Premco Global product showcase

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Raw-materials
Elastic narrow fabrics are made from heat resistant latex thread generally referred to as
Rubber thread or heat resistance spandex yarn. This yarn is woven or knitted along with
yarns of polyester, nylon or cotton. Polyester yarn of 150 deniers and nylon yarn of 210
denier are used for the purpose.
Financial Highlights
(Rs. in Cr)

12-13

11-12

10-11

09-10

08-09

07-08

06-07

05-06

04-05

03-04

Sales

52.85

33.77

42.31

28.06

30.11

24.29

22.95

20.70

21.21

18.30

Total Income

53.49

34.14

45.10

28.85

30.71

24.76

23.29

20.68

20.10

18.44

Operating Profit

9.38

3.14

3.89

2.95

3.57

2.9

2.61

2.2

2.29

2.22

Interest

0.95

1.01

0.91

0.37

0.58

0.45

0.8

0.53

0.67

0.81

Depreciation

1.07

1.03

1.01

0.78

0.78

0.8

0.75

0.7

0.68

0.65

PBT

7.35

1.09

1.96

1.79

2.2

1.64

1.06

0.97

0.94

0.75

Provision for Taxation

2.49

0.46

0.38

0.7

0.78

0.56

0.36

0.34

0.14

0.05

Profit After Tax

4.85

0.63

1.58

1.08

1.41

1.07

0.7

0.62

0.8

0.69

Prov for Deferred Tax

-0.31

0.02

0.22

0.03

-0.04

-0.03

-0.11

-0.11

-0.02

-0.03

Prov for FBT

0.06

0.03

0.03

0.04

Extra Ordinary Item

0.6

Net Profit (+) /Loss (-)

5.16

0.61

1.35

1.05

1.39

0.46

0.78

0.69

0.82

0.73

Equity Dividend %

0.18

0.12

0.12

0.12

0.12

0.12

0.08

Dividend Payout

0.56

0.35

0.35

0.35

0.35

0.34

0.23

Paid up Share Capial

3.16

3.01

3.01

3.01

3.01

2.97

2.97

2.97

2.97

2.97

17.73

12.96

12.77

11.82

11.19

10.06

10.07

11.79

11.09

10.10

1.98

2.29

2.26

2.04

2.05

2.09

Net Worth

22.88

18.28

18.05

16.88

16.21

15.09

15.14

14.76

14.06

13.07

Gross Fixed Assets

23.06

21.84

22.21

18.13

16.92

16.36

16.92

15.28

14.58

13.81

Net Fixed Assets

13.22

12.90

13.65

10.43

99.4

10.11

10.31

9.32

9.32

9.21

E.P.S.- Rs.

16.79

2.01

4.46

3.47

4.61

1.54

2.57

2.3

2.72

2.4

Book Value - Rs.

71.82

60.21

59.46

75.88

53.4

49.73

50.29

48.63

46.33

43.08

Debt : Equity Ratio

0.26:1 0.28:1 0.30:1 0.20:1 0.08:1 0.10:1 0.16:1 0.20:1 1.01:1 0.59:1

Reserve & Surplus

Deferred Tax Liability

Number of Investors
Number of Employees

1292

1,266

1,302

1,316

1,395

1,395

1,487

1,606

1,872

1,853

169

168

181

134

131

138

129

131

143

124

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P&L

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Balance Sheet

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Cash Flow

The high receivables Rs 10.52 Cr for 2013 could be the reason for the low net cash from
operating activities.

Debtor Days

20122013
72.6

Half Yearly
Debtor Days

H1 2013-2014
41

Annual

20112012
53.4

20102011
40

20092010
60

20082009
54

20072008
62

20062007
66

H1 2012-2013
108.4

It seems that the company has worked on its receivables this year. Having said the net
cash from operating activities must be looked clearly in this years result.
Quarterly Results

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Key Ratios

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Exports
Sales (Rs) Cr

Domestic

Exports

Export %

2012-13

28.31

25.16

47.05

2011-12

17.89

16.22

47.55

2010-11

28.82

14.44

33.38

2009-10

20.96

7.08

25.25

2008-09

23.4

6.7

22.26

2007-08

18.46

5.82

23.97

Capacity Expansion

Capex (Rs Cr)

20122013

20112012

20102011

20092010

20082009

20072008

20062007

Plant & Machinery addition

1.28

0.45

3.53

1.18

0.31

1.07

1.69

Plant & Machinery deduction

0.27

1.04

0.14

0.1

2.06

0.14

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Management compensation

Remuneration, Bonus and Perks Rs Lakhs

201213

201112

201011

2009- 2008- 200710

09
08

Key Mgmt Persons

35.36

28.9

29.23

30.37

20.93

11.82

Relatives of Key Mgmt Persons

20.87

14.55

11.62

6.5

4.2

1.2

Dividends
Date

Amount (Rs)

08-Aug-13

1.8

27-Sep-12

1.2

09-Aug-11

1.2

15-Sep-10

1.2

04-Sep-09

1.2

11-Sep-08

1.2

31-Aug-07

0.8

Shareholding Pattern
Shareholding

Dec-13

Dec-12

Dec-11

Promoter

61.53%

59.63%

59.63%

Public > 1%

11.25%

16.71%

16.32%

Public < 1%

27.22%

23.66%

24.05%

31,86,300

30,36,300

30,36,300

Total No of Shares

Dec 2013 - Issue of 1,50,000 equity shares on preferential basis to the promoters
Dec 2012 - Issue of 1,50,000 equity shares on preferential basis to Suresh B Harajni,
one of the promoters of the company at a price of Rs 28 per share aggregating to Rs 42
lakh

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Realization cost table

Elastic Tape Realization

20122013

20112012

20102011

20092010

20082009

20072008

20062007

Rs / metre

6.42

6.49

5.36

4.85

4.63

4.58

4.17

% change

-1.08

21.08

10.52

4.75

1.09

9.83

20122013

20112012

20102011

20092010

20082009

20072008

20062007

143

128.6

140.17

111.93

103.23

107.8

109

% change

11.20

-8.25

25.23

8.43

-4.24

-1.10

Nylon

20122013

20112012

20102011

20092010

20082009

20072008

20062007

Rs / Kg

256.06

250.23

258.53

212.87

196.85

262

293.6

% change

2.33

-3.21

21.45

8.14

-24.87

-10.76

Rubber

20122013

20112012

20102011

20092010

20082009

20072008

20062007

Rs / Kg

183.5

179.76

206.28

149.22

201.94

203

209.4

% change

2.08

-12.86

38.24

-26.11

-0.52

-3.06

% of Raw M Purchase

20122013

20112012

20102011

20092010

20082009

20072008

20062007

Polyester

48.5

45.7

38.9

44.2

47.7

39.9

40.3

Nylon

21.8

21.9

20.3

27.1

15.7

30.4

29.8

Rubber

26

27.6

23.5

22.4

21.7

22.8

25.7

Other

3.6

4.8

17.2

6.3

14.8

6.9

4.2

Raw Materials

Polyester
Rs / Kg

Premco seem to have pricing power for its product irrespective of the raw material
pricing. Last year the per metre realization price took a hit. Since the sales had a major
jump compared to last year, maybe they had to take a compromise on the pricing.

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Investor Returns
Period

Date

Price (Rs)

Returns (%)

1Week

07-Feb-14

39

13.46

1Month

14-Jan-14

38.95

13.61

3Month

14-Nov-13

36.9

19.92

6Month

16-Aug-13

24.4

81.35

1Year

15-Feb-13

34.5

28.26

2Year

14-Feb-12

19.95

121.8

3Year

14-Feb-11

22.45

97.1

5Year

03-Mar-09

10.27

330.87

Src: http://www.motilaloswal.com/

SWOT Analysis
Strengths

Premcos financial record and ratios for the last 2 years are stellar
The products seem to have pricing power
Company paying dividends for the past seven years

Weakness

Very small market cap [Mkt perception]

Low volumes of share traded

Opportunities

Very small market cap

With the inner wear market moving towards branded goods, the sales of Premco
will be in a better position
Export market potential

Threats

Receivables aging

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Synopsis
The company seems to have a stellar growth path. The markets seem to have noticed it.
If the company can produce similar results, the stock would get re rated.

References
1.
2.
3.
4.

www.bseindia.com
www.premcoglobal.com
www.moneycontrol.com
www.screener.in

Disclaimer
General: This report is not a buy / sell recommendation. Buying stocks must be done
after careful analysis and the above report can be used as a base for the analysis and
should not be used as sole basis.
Vested Interest: The author has bought the above mentioned stock at an average price
of ` 33. He may purchase / sell the same in the future in the short or long term based on
his conviction and his financial situation.
Data Validity: The data is collated from various sites in the internet. Even though we
have tried our best, there may be discrepancy due to human error while collating the
data. The author should not be held responsible for such mistakes. The data can be
looked up at various websites given in the reference section.
Valuation: The author is not an expert and his valuation may be off the mark.

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