Restile Ceramics Limited

Transcription

1 Restile Ceramics Limited Date: 5 th January, 216 Stock Performance Details Shareholding Details September 215 Current Price : ` 8.63^ Face Value : ` 1 per share 52 wk High / Low : ` 1.44 / 2.57 Total Traded Volumes: 23,866 shares^ Market Cap : ` 84.8 crore^ Sector : Furniture, Furnishing, Paints EPS (H1 FY16) : ` (.58) per share Equity Share Capital : ` 98.3 crore P/E (TTM) :. (x)^ P/BV (TTM) : 5.7 (x)^ Financial Year End : 1 st April 31 st March BSE Scrip Name : RESTILE BSE Scrip Code : ^ as on 4 Th January, 216 Particulars Shareholding Nos. (%) Promoter & Promoter Group Holding 7,7,22, Total Institutional Holdings (FIIs & DIIs) 1,19,34.12 Public Holdings 2,74,37, Total 9,82,79, Background Restile Ceramics Limited (RCL) was incorporated as a Private Limited Company in 1986 and was converted into a Public Limited Company in It manufactures vitrified unglazed and glazed ceramic floor and wall tiles and other ceramic products. RCL sells its products under the brand names Granamite and Mirrorstone. The Company offers tiles under various collections, such as Original Collection, Makers collection, Masters Collection, Mystique Collection, Step-Up Collection and Tom Dick & Harry Collection based on the colour, texture, design, and suitability. The Company offers its products to various sectors, such as retail, hospitality, pharmaceuticals and healthcare, food and beverages, airports, financial, educational, government institutions, airports, entertainment, information technology, projects, religious, retails and showrooms. The Company currently has a network of 15 Distributors and 3 Dealers and is gradually expanding its current setup of distributors and dealers by adding an additional 1 dealers every year. It plans to open its own Company Showrooms, Franchisees, Multi-product dealers. Restile has further enhanced its product portfolio by adding MARBOGRANIT range of Bell Granito Ceramica Limited. RCL exports its products to West Asia, Argentina, Australia and Singapore. It has also received orders from the Far-East and some South American countries. In order to make the Company s business viable, the management decided to restructure the Company by way of merging with its other Group Companies named M/s. Atreya Finance Pvt Ltd and Bell Granito Ceramica Ltd with the Company through Board for Industrial and Financial Reconstruction (BIFR), since the Company is a sick industrial Company registered with BIFR. An Initiative of the BSE Investors Protection Fund1

2 Financial Snapshot Particulars Standalone (` Million) Income Statement H1 FY16 H1 FY15 Income from Operations Y-o-Y Growth (%) (49.2) EBITDA (16.2) (12.4) Y-o-Y Growth (%) (3.6) 32.6 EBITDA Margin (%) (75.3) (131.9) Net Profit (57.) (59.4) Y-o-Y Growth (%) 4. (14.9) NPM (%) (265.1) (631.9) Balance Sheet Fixed Assets Cash and Bank Balances.3.8 Inventories Net Working Capital (442.9) (236.7) Net Worth Balance Sheet Ratios ROCE (%) RONW (%) (51.7) (27.3) Source:Capitaline From the Research Desk of LKW s Gurukshetra On a half yearly basis,the Company s Standalone Income from Operations increased from Rs. 9.4 million reported in H1 FY15 to Rs million in H1 FY16. The Topline comprises Income from sale of products like vitrified tiles and feldspar and quartz lumps. Material Cost forming 88.8% of Net Sales increased from Rs. 4 million reported in H1 FY15 to Rs.19.1 million in H1 FY16. Employee Cost decreased from Rs. 5 million reported in H1 FY15to Rs. 3.7 million in H1 FY16. Other Expenses increased to Rs million in H1 FY16 as compared to Rs. 2.6 million reported in H1 FY15. The Company reported an Operating Loss of Rs million in H1 FY16 as compared to a Loss of Rs million in H1 FY15on account of higher Material Cost and Other Expenses for the period under review. Depreciation Cost stood at Rs million in H1 FY16 lower than Rs million reported for H1 FY15.In line with the subdued performance at the Operating level, Net Loss of the Company stood at Rs. 57 million in H1 FY16 as compared to a Loss of Rs million in H1 FY15. Inventories stood lower at Rs million in H1 FY16, decreasing from Rs million reported in H1 FY15. Debtors increased to Rs million in H1 FY16 from Rs. 5.4 million in H1FY15. An Initiative of the BSE Investors Protection Fund2

3 Performance on the Bourses % Stock Performance Restile Ceramics BSE Small Cap as on 29th December, 215 Peer Comparison Restile Ceramics Limited is the manufacturer and supplier of vitrified tile and in the business of flooring tiles. The competition is fierce affecting the quality standards in general. The Company faces competition from the players whose businesses are substantially larger, having considerably greater financing resources. Also, these larger players may have greater technical, marketing and other resources.the table mentioned below gives a snapshot of the Company s performance for H1 FY16 to those of its peers which operate in a similar business segment in the listed space. (` In millions) Particulars Restile Asian Granito Murudeshwar Ceramics Ceramics Income from Operations , EBIDTA (16.2) Net Profit (57.) EBIDTA Margins (%) (75.3) PAT Margins (%) (265.1) Book Value Per Share P/E (x).^ 19.2^ 44.5^ P/BV (x) 4.1^ 1.^.3^ RONW (%) (51.7) Source: Capitaline Financials on Standalone Basis ; ^On a Standalone Basis as on September, 215 (TTM Basis) An Initiative of the BSE Investors Protection Fund3

4 About the Industry Management Outlook India s ranking in world ceramic tile production is third (China and Brazil are the top two) and is growing at an annual growth rate of 15% contributed largely by urbanisation, a boom in the retail industry, and optimism in India s economic outlook. Popular housing projects are increasingly switching over to Ceramic Tiles, moving away from the traditional use of mosaic and even granite or marble, owing to several factors viz. ease in laying ability, versatility, low price and hygiene.the main product segments are the Wall tile, Floor tile, Vitrified tile and Industrial tile segments. The market shares (in value terms) are 2%, 23% 5%, and 7% respectively for Wall, Floor, Vitrified, and Industrial tiles. The export market could also grow simultaneously as the major players are set to enter the international market and many multinational companies entering the Indian market will further improve the industry. However, the industry is currently impacted by the overall economic slowdown and the continuous increase in the cost of major inputs including power & fuel. While the global tiles production grew at an annualized rate of 6.3% for the period , tiles production in India grew at almost double that rate at 12% during the same period. Ceramic tiles that account for close to 6% of the total tiles demand in India is expected to grow at a CAGR of 8.7% for the period The vendors in the ceramics industry have to invest in high-quality production processes, logistics systems that guarantee fast delivery and the development of innovative products in order to keep market share. Worldwide Ceramics Markets are increasingly diversified and poised to represent significant size as every segment continues to grow. Ceramics covers a broad range of sectors within the building industry. Ceramics sub-sectors are being impacted by the need for the availability of raw materials and the high costs of energy. As solar energy becomes available, competitive, and affordable by 216, this is set to create vast market shifts in the ceramics markets. Ceramic production today is a sizeable contribution to the country s GDP at Rs. 6 million square meters p.a.the market size in volume of ceramic tiles industry is estimated to touch 11 sq. mt. by 216. The industry also enjoys the unique distinction of being indigenous with an abundance of raw materials, technical skills, infrastructural facilities despite being fairly capital intensive. More than 5, 5, people are employed in the sector. Out of this, 5, people are directly employed and 5,, are indirectly associated. The potential is huge considering the per capita consumption of ceramic tiles in India. Reduced inflation, stable Rupee, improved purchasing power, and higher capital flows supported by the Government policy measures have put India on an accelerated growth track and improved the business outlook. Freight, supply of power and gas remains the key cost-related issues impacting the industry. Availability, consistent supply and reasonable rates are important for the growth of the ceramic tile industry. The increasing global presence of the Company and varied range of distinctive products to offer augurs well for the Company to achieve satisfactory growth in the coming years ahead. However, despite the growth drivers, there are certain challenges faced by the Company like competitors operating at a larger scale with adequate facilities of natural gas and tax incentives, rising raw material and labour cost, Inventory and Distributor and Dealers management coupled with the challenge of introducing more products in its domain. An Initiative of the BSE Investors Protection Fund4

5 Financial Graphs 25 Net Income from Operations 2 ` in Million H1 FY15 H1 FY16 EBIDTA & EBIDTA Margins ` in Million H1 FY H1 FY % EBIDTA EBIDTA Margins PAT & PAT Margins -55 ` in Million % H1 FY15 H1 FY16-7 PAT PAT Margins An Initiative of the BSE Investors Protection Fund5

6 Disclaimer All information contained in the document has been obtained by LKW s Gurukshetra from sources believed to be accurate and reliable. Although reasonable care has been taken to ensure that the information herein is true, such information is provided as is without any warranty of any kind, and LKW s Gurukshetra in particular makes no representation or warranty express or implied, as to the accuracy, timeliness or completeness of any such information. All information contained herein must be construed solely as statements based on available data, and LKW s Gurukshetra shall not be liable for any losses incurred by users from any use of this document or its contents in any manner. Opinions expressed in this document are not the opinions of our company and should not be construed as any indication of our recommendation to buy, sell or invest in the company under coverage. Disclosure Each member of the team involved in the preparation of this report, hereby affirms that there exists no conflict of interest. The report has been sponsored and published as part of Initiative of BSE s Investors Protection Fund About Us LOTUS KNOWLWEALTH (LKW)commenced business in 1991 and is currently engaged in providing CAPITAL MARKET RESEARCH, INVESTMENT ADVISORY and STRATEGY services. GURUKSHETRA is the Research and Training arm of LKW. LKW INVESTMENT ADVISERS is the SEBI registered Investment Advisory arm of LKW. 5 Contact Us LOTUS KNOWLWEALTH Pvt. Ltd. Regd. Office: B Wing, 55-56, Fairlink Centre, Off Andheri Link Road, Andheri (W), Mumbai enquiry@lotusknowlwealth.com Tel: Website: An Initiative of the BSE Investors Protection Fund6