Vardhman Acrylics good company

Vardhman Acrylics

CMP Rs.36

Target Rs.60/75 in 9-12 Months

👉🏻Vardhman Acrylics Limited (VAL) was set up in 1999 as a subsidiary of Vardhman Textile Limited. The parent company holds 70% shares of the subsidiary. VAL is engaged in the business of manufacturing Acrylic Fiber, which is used in Hand-knitted Yarns, Blankets, Jerseys, Sweater, Saris, Upholster, Carpets etc. The manufacturing plant is located at Jhagadia, Gujarat in collaboration with Marubeni & Exlan of Japan. The capacity of the plant is 20,000 MT. The wet spun technology employed to spin the fiber is sourced from Japan Exlan Co. Ltd. Products are marketed under the brand name VARLAN. Approximately 74% of the company`s revenue comes from selling finished goods, while the rest comes by trading Acrylic Fiber and Acrylonitrile.

👉🏻Core business EBITDA at INR 45 cr; Available at Mcap of INR 110 cr (ex-cash)

👉🏻VAL`s market capitalisation is at INR 318 cr and net cash at INR  208 cr. Core business, which is doing EBITDA of INR 45 cr and sales of INR 411 cr are available at INR 110 cr Mcap (ex-cash).

👉🏻ROCE of the business is at 30%.EBIDTA margins at 12-15 percent. Debt free.

👉🏻Cash and investment comes to 208 crores or Rs.22.20 per share half of the market price. So entire business available at just Rs. 11.80 per share. Company Belongs to one of the Biggest Group In TEXTILE Industry.