Lakshmi Cotsyn plans 1,500 MBOs

Shri Lakshmi Cotsyn has suffered a fall in stock by 44 per cent over the last six months.

But the company’s fundamentals and outlook for the coming quarters look promising. It plans to focus on the high-margin technical textile business and retailing. The company has undertaken expansion of capacities across various segments including technical fabric, denim, fusible interlining fabric and terry towels. Through this expansion, it will expand its technical textile capacity from six million meters to 64.5 million meters by September 2011. It plans to expand the terry towel capacity by five times to 15,000 tons and double its fusible interlining and denim capacity to 12.5 million meters and 40 million meters respectively.

Shri Lakshmi, which began in 1993 as a small textile unit, is considered among one of the premier manufacturers of home furnishing products and is known for denim fabrics, terry towels, bed linen, cotton fusible interlining, embroidered fabric, technical textile products and ballistic products. It’s known for delicate designs, attractive colors, unmatched workmanship and subtle elegance. Shri Lakshmi Cotsyn is a market leader in technical textiles. The company is set to benefit from the doubling of its home furnishing and fabrics segments. The fabrics segment includes denim, bottom weight, blended, quilted and embroidery and home furnishing includes terry towels and bed sheets. Both these segments, in all, contribute more than 28 per cent to the company’s total revenues.

Moreover the company plans to open 1,500 multi-brand retail outlets on a franchise model this fiscal. In the third quarter ending March 2011, the company’s net profit increased by around 9 per cent to Rs 27.7 crores on a year-on-year basis. Also, its net sales jumped by around 14.3 per cent to Rs 437.8 crores. After witnessing a sharp fall in the past year’s June quarter, the company’s operating profitability is once again closer to the year-ago level of above 16 per cent.