CRISIL gives Shri Lakshmi Cotsyn 5/5

CRISIL Research has come out with its report on Shri Lakshmi

Cotsyn. The research firm has initiated coverage on the company with a valuation grade of 5/5, fundamental grade of 2/5 and maintained fair value of Rs 150 per share in its August 8, 2011, report. Shri Lakshmi Cotsyn’s Q4 FY ’11 (June-ending) revenues and profitability were in line with CRISIL’s expectations. Lakshmi Cotsyn reported a 21.1 per cent year-on-year increase in revenues backed by healthy demand growth across value-added segments viz. home furnishing and technical textiles. The company also launched its readymade garment brand DYFI during the quarter. Higher sales of value-added products and better realizations led by robust demand helped the company to offset higher personnel and manufacturing expenses. Lakshmi Cotsyn maintained its EBITDA margin at year-on-year levels of 15.2 per cent.

Adjusted PAT grew by 9.1 per cent year-on-year to Rs 277 million due to healthy revenue growth. However, adjusted PAT margin declined by 30 basis points year-on-year to 6.3 per cent in the third quarter of FY ’11 due to higher interest and lower other income. The company is currently undertaking trial runs and the utilization of the expanded capacity is expected to improve in the subsequent quarters.