Page 1 of 5 Company Profile Chandni Textiles Engineering Industries Ltd, promoted by Mr. Jayesh R Mehta and family, was incorporated on June 17, 1986 as mita Texturizers Private Limited. Its emname was subsequently changed in 1990 and the company became public in 1994. The company is a leading textile machinery manufacturer of Two-For-One Twisting machines (TFO). The company's factories are located in Ringanwada in the Union territory of Daman and nkleshwar in the state of Gujarat. There were 12 permanent employees on the rolls of company as on March 31, 2015. The company s top management includes Mr. Jayesh Ramnilklal, Chairman and Managing Director of the company, who holds Textile Engineer (LTM) degree from VJTI. Mr. J R Mehta has over 20 years of experience in the textile industry and has vast knowledge of import/manufacture of textile machinery and all types of machinery. Mr. Shailesh Sankav is the Chief Financial Officer of the company. bout 46.5% of the shareholding is held by the promoters, while the rest of 53.5% shareholding lies with non- Institutional shareholders. Business Overview The company is engaged in assembling Two-For-One Twisting machines and selling under the brand name Prerna. It is also engaged in sourcing of all types of machinery and equipment. The company also manufactures velvet fabrics and continues to outsource some of the textile division products. The company s segment comprises of engineering division and textile division. The company's products and services include grey fabrics and fancy shirting. Its plastics and rubber machinery includes die casting machines, injection molding machine (0-50 ton) and rubber injection molding machine, among others. Its metal working machinery includes machine tools and sheet metal/fabrication equipment. Its material handling equipment includes forklift. It also offers various testing equipment. The company enjoys several advantages over its global competitors such as economical and specialized manpower costs, infrastructure and logistics costs and warehousing costs. It also offers aftersales maintenance and long-term service contracts and supply critical spare parts. In FY 2015, the company s revenue generated from engineering division and textile division contributed 9.68% and 90.31% respectively of the total revenue. Stock Price Price in Rs. Last Close Price 0.91 (01/02/2016) 52 Wk High/Low 1.85/0.60 Market Cap (Cr.) 10.81 (31/12/2015) vg. Volume 18430.50 (1 Mo) Financials (Rescaled to 100 for ease of comparison) Revenue 72.37 73.37 18.68 13.24 26.33 Gross Margin % 10.53 1.23 7.48 17.39 1.16 Operating Income 6.05 0.60 0.01 0.18 0.07 Operating Margin % 8.36 0.82 0.07 1.39 0.28 Diluted EPS 0.25 0.02-0.01 - Book Value Per Share - - - 1.36 1.42 Operating Cash Flow 0.23 0.43-0.70 1.24 1.06 Capital Expenditure -0.16-1.43-1.29-0.86-0.16 Free Cash Flow 0.07-1.00-2.00 0.38 0.90 Profitability verage Values unless stated Return on ssets % 18.00 1.00 - - - Return on Equity % 20.00 2.00-1.00 - sset Turnover 3.22 2.66 0.63 0.47 0.93 Net Margin % 5.00 - - 1.00 - Financial Leverage 1.07 1.47 1.27 1.30 1.27 Financial Health except Debt/Equity (Ratio) Long Term Debt 0.43 0.47 0.20 0.01 0.01 Total Equity 21.42 21.79 21.83 21.95 21.99 Debt/Equity - - - - - Working Capital 19.15 17.88 17.24 16.99 16.92 Report as of 02-Feb-2016. Initiative of the BSE Investors Protection Fund. 2016 Morningstar. ll Rights Reserved. Please refer to the disclaimers on the last page of this report.
Page 2 of 5 Income Statement Total Revenue 72.37 73.37 18.68 13.24 26.33 Cost of Revenue 64.75 72.46 17.28 10.93 26.03 Gross Profit 7.62 0.91 1.40 2.30 0.30 Operating Expense 2.63 1.26 2.37 3.01 1.14 Operating Income 6.05 0.60 0.01 0.18 0.07 Pre-tax Income 6.05 0.67 0.03 0.18 0.07 Tax Provision 2.07 0.30-0.01 0.06 0.02 Minority Interests - - - - - Balance Sheet Stock Holders Equity 21.42 21.79 21.83 21.95 21.99 Long Term Debt 0.43 0.47 0.20 0.01 0.01 Total Non-Current Liabilities 0.43 0.47 0.20 0.01 0.01 Payables 0.46 7.78 5.00 5.88 5.56 Total Liabilities 1.53 10.32 5.80 6.56 6.02 Net PPE 2.40 3.15 3.61 4.09 3.73 Goodwill and other Intangible ssets - - - - - Total Investments 0.11 0.11 0.11 0.27 0.62 Total Non-current ssets 2.70 4.38 4.80 4.98 5.08 Trading and Other Receivables 9.00 14.72 12.60 13.53 10.97 Inventory 3.15 4.69 4.34 4.19 4.08 Cash and Cash Equivalents 7.87 7.88 5.74 5.66 7.76 Total ssets 22.96 32.11 27.63 28.51 28.01 Cash Flows Depreciation and mortization 0.14 0.14 0.14 0.21 0.32 Change in Working Capital -4.54 0.02-1.36 0.69 2.36 Operating Cash Flow 0.23 0.43-0.70 1.24 1.06 Capital Expenditure -0.16-1.43-1.29-0.86-0.16 Investing Cash Flow 0.37-0.59-1.13-1.02 1.33 Net Common Stock Issuance - - - - - Net Issuance Payments of Debt -0.79 0.28-0.24-0.26-0.19 Cash Dividends Paid - - - - - Financing Cash Flow -0.84 0.17-0.31-0.31-0.28 Changes in Cash -0.24 0.01-2.14-0.08 2.11 Report as of 02-Feb-2016. Initiative of the BSE Investors Protection Fund. 2016 Morningstar. ll Rights Reserved. Please refer to the disclaimers on the last page of this report.
Page 3 of 5 Financial Performance The company s total revenue grew by 99% to INR 26.33 crores in FY 2015. It registered an operating income of INR 0.07 crores in FY 2015, a decrease of 61.1% due to which operating margin declined by 111 basis points to 0.28% versus the last year. The company s net income stood at INR 0.06 crores in FY 2015, registering a decline of 50% year-over-year. Revenue Growth Key Risks The company s business may get affected due to severe competition from cheaper imports of second-hand machinery, change in government policy during the reform process and encouraging easy imports of new and second-hand textile machinery. The sector also lacks investment into research and development. Competition from high tech machinery of European and South-East sian countries is a real challenge for the domestic companies. China is leading in the field of textile exports as it manufactures not only spinning, weaving and processing machinery but also knitting, embroidery and plants for the non-woven industry. Competitors lok Industries Ltd and S R K Industries Ltd are two of the competitors of the company. lok Industries Ltd is engaged in the business of textile manufacturing including mending and packing activities. Its segment comprises of five divisions, namely, cotton yarn, apparel fabric, home textiles, garments and polyester yarn. The company reported revenue of INR 22355 crores for FY 2015, an increase of 10.34% year-over-year. S R K Industries Ltd has a diversified business into textile and construction. The company focuses on trading in textile fabrics and undertakes redevelopment of residential properties in and around Mumbai. The company s segment comprises of Textiles, Real Estate Development and Software Development. The company reported revenue of INR 3.04 crores for FY 2015, a decrease of 87% year-on-year. Gross Margin Operating Margin Report as of 02-Feb-2016. Initiative of the BSE Investors Protection Fund. 2016 Morningstar. ll Rights Reserved. Please refer to the disclaimers on the last page of this report.
Page 4 of 5 Industry Overview The textile machinery industry in India is the second largest in the world and is one of the largest segments of the domestic machinery manufacturing industry. This industry is nearly 60-years-old and has about 1,000 machinery and component manufacturing units. Nearly 300 units produce complete machinery and the remaining produce various textile machinery components. The total investment in this industry is around 2,000 Crores. Majority of the production comes from Tamil Nadu and Gujarat, collectively contributing around 84% of the production. Trailing Returns Indian imports for textile machinery parts and accessories have grown at a CGR of 25% in last few years. Though exports are very low as compared to imports, it is showing an increasing trend at a CGR of 36%. Domestic demand for textile machinery is increasing at a CGR of 17% over the year. However the demand met by indigenous manufacturers is not even half of the total demand. The Indian textile engineering sector offers the modern technicallyadvanced machinery for spinning, weaving and processing sector as well as simple machinery required in ginning and pressing industry. However it continues to face stiff challenge from high-tech machinery of European and Southeast sian countries. Return on Invested Capital (ROIC) Quarterly Results except EPS (Rs.) Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Revenue 1.61 3.65 19.71 1.10 2.26 Expenditure -1.74-3.63-21.49-1.37-2.44 Interest -0.03-0.04 - - - PBDT -0.17-0.01-1.79-0.26-0.18 Depreciation -0.08-0.07-0.08-0.08-0.08 PBT -0.25-0.08-1.87-0.34-0.26 Tax 0.08-0.17 0.48 0.03 0.01 Net Profit 0.10 0.15-1.12-0.07 - Equity 16.14 16.14 16.14 16.14 16.14 EPS - - -0.01 - - *Standalone figures Report as of 02-Feb-2016. Initiative of the BSE Investors Protection Fund. 2016 Morningstar. ll Rights Reserved. Please refer to the disclaimers on the last page of this report.
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