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Replying to Yash Ved of IIFL, Dr M P Agarwal says "The Company proposed to diversify to manufacture black out fabrics, flex fabrics, carbon fabrics."
Dr. M. P. Agarwal, Chairman and Managing Director, Shri Lakshmi Cotsyn Limited, is a professional industrialist who has more than 30 years of experience in project implementation, project management, finance and overall industrialist management. He is a qualified Cost Accountant (ICWAI)) and Doctorate (PHD) in Textile costing. He has experience in the industry having worked with leading textile organizations.
Shri Lakshmi Cotsyn Limited (SLCL) has emerged as one of the largest integrated technology driven textile players of India with a wide range of Products. The Company is engaged in the processing and manufacturing of Blended Suiting & Shirting, Cotton Fusible Interlining, Embroidery & Lace Fabric, Quilted Fabric, Denim Fabric, Bottom Weight Fabric, Wider Width Fabric, Terry Towel, Technical Textile and Nylon Coated Fabric, Home Furnishing Fabric and Readymade garments. The company also have the Manufacturing Facilities for Textile Chemicals, Yarn Dyeing and Power Plant for captive consumption.
Replying to Yash Ved of IIFL, Dr M P Agarwal says "The Company proposed to diversify to manufacture black out fabrics, flex fabrics, carbon fabrics."
What are your plans on the technical textiles? How do you see the prospects for this segment in India in terms of demand, growth rate, etc.? The Company is presently manufacturing various technical textile fabrics, which include high altitude fabric, PU Coated Nylon Fabric, Nuclear Bio-Chemical Fabrics, ballistic plates etc. Now the company proposes to diversify into manufacture of black out fabrics, flex fabrics, carbon fabrics and IRR fabrics with estimated total capital expenditure of Rs.3bn.
In India, demand for technical textile is expected to grow exponentially owing to widening applications of fire retardant textiles, used in hotels, multiplexes, malls and defence sector. India’s Ministry of Textiles is expected to make the use of fire retardant fabrics mandatory in public places, which will create an additional demand for such fabrics.
Brief us about your expansion plans? The company is currently expanding its terry towel manufacturing capacities from 3,000 MTPA to 15,000 MTPA. In view of the power shortages, SLCL is also setting up a 16 MW power plant for captive use. The total cost of both the projects is Rs. 3778 mm. The company has raised 2500 mn as term loan and the balance has been raised through internal accruals. The project is expected to be commissioned by Sep. 2010.
The company manufactures various technical textiles which includes fusible interlining fabric, high altitude fabric, PU coated fabric etc. In view of the increasing demand, the company has decided to enhance the capacity from 12.5 MMPA to 25.0 MMPA. It is also venturing into manufacturing of black out fabrics, flex fabrics’, carbon fabrics etc. The estimated capital cost for the project will be Rs. ~4.82 bn.
SLCL has the capacity to manufacture 20 MMPA of denim p.a., which it intends to increase to 40 MMPA. It also intends to increase the manufacturing capacity of wider width fabric from 12 MMPA to 30 MMPA. The estimated capital cost for the project will be Rs. ~5.10 bn.
The company has recently acquired 25,000 spindles on job work at Fatehpur from U.P. State Co-operative Federation Ltd. Besides this, the company is also setting up a 50 MW Solar power plant in Rajasthan and 300 MW Thermal Power Project in the state of Chattisgarh.
What are your fund raising plans? The Company has convened the EGM of the shareholders for approving the resolution for raising equity of Rs. 5bn for its various projects viz., Technical Textiles, Denim, Sheeting and Spinning mill etc.
How is your power plant and defence business undergoing? The Defense business consists of fabric, technical textile products and ballistic products. In normal fabric net margin comes to around 5-6%. In technical textile, it goes from 15-25% and in case of ballistic product it is 10-11%.
Tell us about your R& D facility? The company invested Rs. 250mn in advanced testing laboratories to evaluate physical and chemical properties.
Some of our competitors are:
Brief us about your financials? For the quarter ended 30th September, The net sales stood at Rs4.15bn as compared to Rs3.56bn in the earlier quarter. The net profit was also stood at Rs232.4mn as compared to Rs 200.3mn for the earlier quarter.
What is the outlook of the textile industry? The industry growth prospects are very good in textiles and particularly the products, which we are manufacturing such as home furnishings, terry towel, denim, nylon coated fabric and technical textiles. In order to keep up the growth momentum, the company is consistently exploring opportunities for growth and catering to the diverse requirements of Indian and global buyers. The company has ventured into diverse areas of end-to end textile solutions.
There are no funding risks considering the size of project, neither technology risk, as we have already developed the technology and got it approved by DMSRD in regard to Technical Textile Project.
What is your order book position? The orders book position stands at Rs6bn.
What is the Promoter holding? Our Promoter holding is 43.67%.
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