Recommendation from Textiles Industry

RSWM LTD | BSE CODE: 500350 | VOLUME: 22067 | CMP: Rs. 323.50

RSWM is engaged in the manufacturing of synthetic and blended spun yarn, polyvinyl fabric and denim fabric. It offers range of products in terms of fiber blends, counts and shades. RSWM supplies its yarns to several well-known companies including Raymonds, Uco Denim, D’ Decor, Arvind, Siyaram Silk Mills, Welspun Group, and Alok Industries. Recently the company has commenced commercial production at its new Kanya Kheri plant in Bhilwara district of Rajasthan at a cost of Rs 182 crore, will increase the company’s yarn production capacity by 5,400 tonnes per year and will help to earn annual revenue of Rs 180 crore from its production of cotton and cotton blended melange yarn. From last three years the company has been paying dividend of Rs 10 per share. Currently stock is trading at PE ratio of 8.8x with a EPS of Rs 36.68 of FY15.

Garware-Wall Ropes | BSE CODE: 509557 | VOLUME: 20697 | CMP: Rs. 266.30

Garware-Wall Ropes is betting big on protected farming and aquaculture to boost the country’s rural economy, thereby benefitting both farmers and fisher-folk. The company has a strong presence in more than 72 countries, is expected to be a Rs 1,000 crore entity in the next two years. Net sales for FY15 reported at Rs 784.25 crore, up by 14 per cent on YoY basis. EBITDA grew by 24 per cent to Rs 81.44 crore and EBITDA margin was up by 90 bps to 10.4 per cent. PAT for the year ended Mar 2015 jumped by 61 per cent at Rs 43.05 crore due to interest cost decline of 20 per cent to Rs 10.25 crore and depreciation was down by 14 per cent to Rs 12.39 crore. We believe the company will improve in its operating margin from current level due to correction in crude oil prices eases the company’s raw material costs.