Research Reports Shri Lakshmi Cotsyn Limited
SLCL's revenues have grown at a CAGR of 45% during the period of FY04-07, while its net profit has grown at a CAGR of 87% during the same period. Going forward, with completion of ongoing expansion plan, increased focus on technical textiles and foray in to high margin garment segment, we believe SLCL will continue to deliver high growth. We expect the company's sales to grow at a 31% CAGR from Rs.6443.8 million in FY07 to 14533 million in FY10E. During the same period, we expect company's PAT to grow at a 40% CAGR from Rs.405.7mn to Rs. 1113.8mn.
The company has reported an EPS of Rs. 39.5 in FY07 that is expected to be Rs.27.7 in FY09E and Rs.38.0 in FY10E (After dilution of equity). At the CMP of Rs.101 the stock is trading at a P/E of 3.6x FY09E earnings and 2.6x at FY10E earnings. We initiate coverage on Shri Lakshmi Cotsyn Ltd with a BUY recommendation and price objective of Rs.152 (implying a Forward P/E multiple of 4x)
