Pioneer Embroideries Limited
COMPANY BACKGROUND.........................................................
• Pioneer Embroideries incorporated in 1991, was promoted by Mr Raj Kumar
Sekhani and is today an established name in the Embroidery, Yarn and Laces
industry. The company is headquartered in Mumbai and has manufacturing
and processing facilities across the country.
• It is one of India’s largest manufacturer and exporter of embroidered fabric
and laces, with over 3,00,000 design collections.
• The company manufactures dope dyed yarn, marketed under the brand name
of Silkolite and is widely accepted for many applications such as Carpets, Bath
Mats, Upholstery Fabrics, Curtains, Furnishings, Knitting and Label etc.
Key Management
Representative
Designation
Mr Harshvardhan
Bassi
MD
Mr Nawal Sharma
CFO
Key Data
• Pioneer maintains its premium position by leveraging its strength in product
development, superior quality control and the company’s brand “HAKOBA”,
which is a synonym to embroidery.
BSE Code
514300
NSE Code
PIONEEREMB
BUSINESS SEGMENTS....................................................................
Reuters
PIOE:NS
Bloomberg
PNE:IN
• Dope Dyed Polyester Yarn: The company manufactures a wide range of
yarn, like fully drawn yarn, single twisted, doubled yarns, multiplied yarns and
air texturized yarn, from deniers as fine as 30 to as coarse as 600.
• Embroideries: The company manufactures a range of embroidery products
and has a well-established brand “Hakoba” which is a synonym to Embroidery.
• Laces: Different kinds of Laces include cotton lace, cotton guipure lace,
chemical lace, two tone guipure lace, polyester guipure lace etc.
Market Data (INR)
As on 31st Dec 2015
Face Value
10
STRATEGIC ADVANTAGE.............................................................
CMP
80.9
• One of the largest manufacturer and exporter of embroideries and laces.
52 Week H/L
83.5/18.0
• Strong market knowledge and intelligence leading to improved designs with
over 3,00,000 designs in their library of embroidered fabrics and laces.
MCAP (Bn)
1,501
Shares O/S (Mn)
18.5
• Niche presence in dope dyed products, has brought branding in businesses
like embroidery and DDPY.
• One of the few companies to have a color library of more than 1200 shades
for dope dyeing.
• Smaller batch capacity with modern equipment, flexible capacity and wellestablished customer base.
• Owns brand “HAKOBA“ which is a synonym for embroidery across the world.
1 Yr Avg. Vol (‘000) 49.5
1 Yr Avg. T/O (Mn)
23.8
Performance As on 31st Dec 2015
3M
6M
12M
PIONEER
EMB.
155%
155%
256%
• Focus on increase in market share and sales in embroideries business by
leveraging the ‘HAKOBA’ brand.
SENSEX
(0.4)%
(6.8)%
(5.1)%
• Reducing cost of debt and focus on improving profitibility.
BSE
MIDCAP
3.0%
3.0%
6.7%
KEY GROWTH DRIVERS.................................................................
• The company is out of CDR and OTS with banks. This will enable the company
to use cash-flows for business growth.
FINANCIAL PERFORMANCE - CONSOLIDATED..........................
Income
from
Operations
EBIDTA
EBIDTA%
PAT
PAT%
EPS
Shareholding Pattern
As on 31st Dec 2015
FY13
2,413
123
5.10%
-338
NA
NA
PROMOTERS
46.1%
FY14
2,732
190
6.95%
-88
NA
NA
FII
0.0%
FY15
2,715
200
7.37%
110
4.05%
3.63
DII
5.3%
9MFY16^
1,903
154
8.09%
323
16.97%
*14.33
PUBLIC
48.6%
(INR. Mn)
^9MFY16 numbers are on a standalone basis
*EPS includes extraordinary Items
Valorem Advisors | 1
BUSINESS SEGMENTS..........................................................................................................................
DOPE DYED POLYESTER YARN: (Revenue contribution 78%)
• PEL set up a Dope Dyed Polyester Yarn (DDPY) manufacturing facility in Kala-amb, Himachal Pradesh in 2007, sensing
this niche industry which was in need of supplying a wide range of quality products at user-specific order size.
• PEL’s DDPY plant at Kala Amb, Himachal Pradesh, is today one of the most unique (end to end solution) plant in India
and probably in the whole of South East Asia.
• In DDPY, the yarn is dyed at the polymer stage and before the extrusion process, the solution of polymer is mixed with
pigment and the extruded yarns are colored with excellent colour fastness.
• PEL has managed to garner notable market presence in this vertical with over 1200 shades and customized order
quantities as per customer requirements.
• Cognizant of the growth prospects of the business, the capacity was enhanced from 4800 MTPA to 12,000 MTPA, with
current utilizations at optimum levels.
• The Dope Dyed business has emerged as a profitable venture and a good diversification over the years.
• The product range includes air texturized yarns, carpet yarns, twisted yarns, fully drawn yarns.
EMBROIDERY AND LACES: (Revenue contribution 22%)
• The range includes Schiffli All Over Embroidery Fabrics or trimmings, Guipers or Chemical Laces, motifs etc.
• Unmatched quality and high tear strength make the products acclaimed among the patrons.
• Used extensively in ladies garments, children wear, lingerie internationally.
• Presently, Pioneer Embroideries is the largest manufacturer of laces in the world with a capacity of around 14 million
meters.
• Different kinds of laces – Flat bed knitted laces, cotton lace, cotton guipure lace, crochet lace, torchon/ bobbin lace,
chemical lace, two-tone guipure lace, polyester guipure lace etc.
• Bobbin Laces are a cyclical fashion product used to increase the visual appeal of garments.
• The company has over 3,00,000 designs in their library of embroidered fabrics and Laces.
GEOGRAPHICAL BREAK-UP FY15
Embroidery
& Laces
22%
Export
17%
Dope Dyed
Yarn
78%
Domestic
83%
PEER COMPARISON - TRAILING 12 MONTHS (INR Mn)...................................................................
Income from
Operations
EBITDA
EBITDA%
PAT
PAT%
M Cap
2,575
257
10.00%
311
12.10%
1,501
19,282
3,719
19.30%
1,929
10.00%
43,410
7,348
1297
17.70%
449
6.10%
3,614
Sutlej
20,090
2,488
12.40%
1,122
5.60%
9,031
Indorama Synthetics*
25,850
483
1.90%
-665
-2.60%
5,162
Company
Pioneer Embroideries*
Indo count*
Nitin Spinners
* Standalone Numbers
Valorem Advisors | 2
CONSOLIDATED INCOME STATEMENT..............................................................................................
Particulars (INR. Mn)
FY13
FY14
FY15
Income from Operations
2,413
2,732
2,715
Total Expenses
2,290
2,542
2,515
123
190
200
5.10%
6.95%
7.37%
63
12
168
Profit before Depreciation, Interest & Tax
186
202
368
Depreciation
131
114
187
Finance Cost
223
167
120
PBT
-168
-77
61
Tax
185
0
0
-353
-77
61
-15
0
0
EBITDA
EBITDA Margin (%)
Other/Exceptional Item
Net Profit/(Loss) before Minority Interest and
Profit of Associate
Minority Interest
Share in Profit/ (Loss) of Associate
-
-11
49
-338
-88
110
PAT Margin (%)
NA
NA
4.05%
EPS (Diluted)
NA
NA
3.63
Profit After Tax
CONSOLIDATED BALANCE SHEET.....................................................................................................
Liabilities (INR Mn)
FY13
FY14
FY15 Assets (INR Mn)
Share Capital
444
444
407
Net Fixed Assets
Reserves & Surplus
-95
276
577
Goodwill on Consolidation
-
-
30
Shareholder Funds
Share Application Money
FY14
FY15
1,114
1,024
886
107
107
107
82
27
76
253
223
225
Non-current Assets
Non-current investments
Long-term loans & advance
Non-current Liabilities
Long-term Borrowings
FY13
Other non-current assets
1,025
135
375
Current Liabilities
4
4
5
Minority Interest
77
78
77
Foreign Currency Translation
29
29
29
Current Assets
Short-term Borrowings
963
995
498
Inventories
343
296
340
Trade Payables
223
193
193
Trade Receivables
412
413
222
Other Current Liabilities
673
949
585
Cash and Bank Balances
36
39
42
38
50
67
806
789
701
8
13
22
3,271
3,042
2,732
Short-term provisions
Short-term Loans & Advances
Other current assets
GRAND TOTAL - LIABILITIES
Ratio
3,271
3,042
2,732 GRAND TOTAL - ASSETS
FY13
FY14
FY15
Return On Equity (%)
NA
NA
10.8%
Return on Capital Employed (%)
NA
4.1%
0.7%
Fixed Asset Turnover Ratio
2.2
2.7
3.1
Net Working Capital Days
106
91
78
Net Debt/Equity
5.6
1.5
0.8
Valorem Advisors | 3
INVESTOR RELATIONS TEAM AT VALOREM ADVISORS.....................................................................
Name
Designation
Email
Phone
Anuj Sonpal
CEO
[email protected]
022-3006-7525
Sheetal Khanduja
Head - Relations
[email protected]
022-3006-7521/2/3/4
Prasanna Pathak
Head - Research
[email protected]
022-3006-7521/2/3/4
Shreyans Jain
Account Manager
[email protected]
022-3006-7521/2/3/4
Account Manager
Account/s
Kenneth Mendonca
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Mayur Joshi
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Shreyans Jain
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Veerendra Reddy
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Modi Naturals
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Valorem Advisors Disclaimer:
Valorem Advisors is an Independent Investor Relations Management Service company. This Report has been prepared
by Valorem Advisors based on information and data which the Company considers reliable, but Valorem Advisors and
the Company makes no representation or warranty, express or implied, whatsoever, and no reliance shall be placed
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contents of, or any omission from, this Report is expressly excluded. Valorem Advisors also hereby certifies that the directors
or employees of Valorem Advisors do not own any stock in personal or company capacity of the Company under review.
Pioneer Embroideries Limited Disclaimer:
No representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness,
accuracy, completeness or correctness of the information or opinions contained in this Report. Such information and
opinions are in all events not current after the date of this report. Certain statements made in this report may not be
based on historical information or facts and may be “forward looking statements” based on the currently held beliefs and
assumptions of the management of Pioneer Embroideries Ltd (“Company”), which are expressed in good faith and in their
opinion reasonable, including those relating to the Company’s general business plans and strategy, its future financial
condition and growth prospects and future developments in its industry and its competitive and regulatory environment.
Forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the
actual results, financial condition, performance or achievements of the Company or industry results to differ materially
from the results, financial condition, performance or achievements expressed or implied by such forward-looking
statements, including future changes or developments in the Company’s business, its competitive environment and
political, economic, legal and social conditions. Further, past performance is not necessarily indicative of future results.
Given these risks, uncertainties and other factors, viewers of this report are cautioned not to place undue reliance on
these forward-looking statements. The Company disclaims any obligation to update these forward-looking statements to
reflect future events or developments.
This report is for general information purposes only, without regard to any specific objectives, financial situations or
informational needs of any particular person. This report does not constitute an offer or invitation to purchase or subscribe
for any securities in any jurisdiction, including the United States. No part of it should form the basis of or be relied upon
in connection with any investment decision or any contract or commitment to purchase or subscribe for any securities.
None of our securities may be offered or sold in the United States, without registration under the U.S. Securities Act of 1933,
as amended, or pursuant to an exemption from registration there from.
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