PBM POLYTEX LIMITED (514087) - STOCK OF THE WEEK

Dear Friends, Today I am expressing my view on one textile stock.

PBM POLYTEX LIMITED (514087) 

PBM Polytex Limited was incorporated on the 24th November 1919 in the name and style of ‘The Petlad Bulakhidas Mills Co. Ltd.’ . The management of the company was taken over by ‘The House of Patodias’ in 1978 and the name of the company was changed to PBM Polytex Ltd.

Subsequent to the takeover, extensive modernization of the mills was effected. Company’s factory buildings were repaired and additional buildings were constructed. Plant and Machinery were gradually replaced with latest machinery through fifteen major modernization programs during the past 20 years.

The company has installed indigenous as well as imported machinery sourced from world class manufacturers like Lakshmi Machine Works Ltd. Coimbatore, Luwa Switzerland, Vouk Italy, Schlafhorst Germany, Zellweger Uster Switzerland and Murata Japan.

As the company progress ,for perfection and also to meet the ever-increasing demands PBM commissioned second plant in 1992, PBM Unit # 2, i.e. BLP Super Spinners. The company’s plant, spread out over sprawling 20 acres at the Boregaon in Chhindwara district in Madhya Pradesh near Nagpur, is one of the most sophisticated in its class in the country.

Dedication as the cornerstone of the group’s policy and quality as its perpetual goal, the future is bright indeed for PBM & BLP.

PBM manufactures a wide range of products from Ne 24’S to Ne 80’S, both single and TFO doubled yarns from as many as 25 raw material mixes. Besides Indigenous raw cotton like DCH 32, MCU 5, Shankar 6 and MECH.

Its specially selected imported varieties includes Egyptian Giza, USA Pima, USA SJV, Israel Pima, Peruvian PIMA, Sudan VS, Californian Acala SJV, Colombia, Acala, Australian, Central American SJV, West African and Turkish.

YEAR TO DATE COMPANY AT A GLANCE

 1919 - The Company was Incorporated on 24th November, in the name of The Petlad Bulakhidas Mills Company, Ltd.

The company's object is to manufacture all kinds of processing yarns, industrial yarns, hosiery yarns, polyester blended yarns and other specialised yarns. The company also has exclusive selling rights from reputed international business house.
1945 - On 5th April, the paid-up value of each equity share of Rs.100 was reduced to Rs.50 per share as per order of the high court of Baroda.
1948 - On 30th August, the paid-up value of each equity share was raised to Rs.100 and the company capitalised an amount of Rs.4,73,650.
1949 - 9,473 - 4% bonus pref. shares issued to the Equity shareholders in the prop. 1:1.
1969 - On 28th August, Gujarat High Court slashed the paid-up value of each equity share to Rs.23. The company sub-divided the paid-up value of equity shares into shares of Rs.10 each after the issue of bonus shares along with the public offer during February 1987.
 As per the order of the Gujarat High Court dated 28.8.69 paid up value of every pref. and Equity share reduced to Rs.21 and 23 respectively. The pref. shares to rank for dividend from 1.1.70 onwards. 43,478 shares to be issued under instruction from Gujarat High Court.
1970 - 32,959 No. of equity shares issued as fully paid-up under the scheme.
1974 - 42,432 bonus equity shares of Rs.23 each issued in prop. 1:1 on 25.3.1975.
1978 - The management of the company was taken over by the `House of Patodia' whose range of activities covered all spheres of textile from basic raw material to finished products. The House also acts as indenting agents for multinational companies of Austria, France, Japan, Taiwan etc.

1986 - Effective from 20th October, the company's name was changed from The Petlad Bulakhidas Mills Co., Ltd., to PBM Polytex, Ltd.
Pref. shares redeemed on 1.1.1987. 84,864 bonus shares of Rs.177 each allotted in February 1987 to existing equity shareholders to make the shares Rs.200 paid-up each. Equity shares then subdivided into shares of Rs.10 each. 2,720 No. of equity shares of Rs.10 each then allotted to employees etc.
1987 - The Company issued 90,000 - 15% non-convertible debentures of Rs.100 each. These debentures redeemable on 10th April, 1994 at 5% per annum.
 During February, the company issued 4,50,000 No. of equity shares of Rs.10 each for cash at a prem. of Rs.2 per share linked to 90,000 - 15% secured redeemable non-convertible debentures of Rs.100 each. Of these, the following were reserved for allotment on a preferential basis: 
(i) 22,500 shares linked to 4,500 debentures to employees (none were taken up)
(ii) 9,000 shares linked to 1,800 debentures to business associate (none were taken up) and

(iii) 1,12,500 shares linked to 22,500 debentures to Non-resident Indians on repatriation basis (only 44,200 shares and 8,840 debentures taken up). The balance 3,06,000 No. of equity shares linked to 61,200 debentures, along with unsubscribed portion of 99,800 shares and 19,960 debentures not taken up under the preferential quota, were offered to the public (all were taken up)
1988 - With a view to diversifying its activities, the Company to set up a synthetic yarn texturising and twisting project at Pipari (Silvassa) in the Union Territory of Dadra and Nagar Haveli. This went into production in the last quarter. This diversification would bring about decentralisation of production with blended yarn being manufactured at Silvassa and 100% cotton yarn being manufactured at Petlad in Gujarat.

1989 - Esotex Industries and Exports Ltd., a 100% Export Oriented spinning unit jointly promoted by the company commenced commercial production. The company invested Rs.70 lakhs in the equity capital of the joint venture.
5,37,500 Bonus equity shares issued in prop. 1:4 on 17.1.1990.
1990 - The company issued 14% non-convertible debentures worth Rs.99 lakhs to SBI Mutual Fund on private placement basis for meeting the long term working capital requirement.
7,00,000 No. of equity shares issued (prem. Rs.8 per share) of which 35,000 shares reserved for preferential allotment to employees (only 26,400 shares taken up). The balance 6,65,000 shares, along with 8,600 shares not taken up by employees, were offered for public subscription in March. (all were taken up).

1991 - The Company had set up a new unit at Bargaon in Chinndwara district in M.P. near Nagpur with a spindleage of about 18,000 with a view to manufacturing yarn of export variety.

1993 - 16,93,750 Rights shares issued in prop. 1:2.

1995 - 10,16,250 Rights Equity shares issued at par in prop. 1:5.

1996 - The company proposed to issue 2032500 No. of equity shares for cash at par aggregating Rs.2.03 crores, on rights basis in the ratio of 1:3.

2005 -Company has recommended dividend @ 6% on the paid up Capital (i.e. Paise 60 per share of Rs 10/- each).

2006 -Company has recommended a dividend @9% on the Paid-Up Capital (i.e. Paise 0.90 per share of Rs 10/- each). 

2007 - Company has recommended dividend @ 10% on the Paid Up Capital (Rs 1/- per share of Rs 10/- each).

2010 -Company has recommended dividend @ 20% on the Paid Up Capital (i.e. Re. 2/- per share of Rs. 10/- each).

2011- PBM Polytex Board has recommended dividend @ 10% on the Paid Up Capital (i.e. Re. 1/- per share of Rs. 10/- each).

2012 - Company Board has recommended dividend @ 15% on the Paid Up Capital (i.e. Rs. 1.50 (Rupee One and Fifty Paise) per share of Rs. 10/- each)

2013 -PBM Polytex Ltd has recommended dividend @ 20% on the Paid Up Capital (i.e. Rs. 2/- (Rupees Two Only) per share of Rs. 10/- each).

2014 -PBM Polytex Ltd has recommended dividend @ 25% on the Paid Up Capital (i.e. Rs. 2.50 (Rupees Two and Fifty Paise only) per share of Rs. 10/- each.

2015 -PBM Polytex Ltd has recommended dividend @ 60% on the Paid Up Capital (i.e. Rs. 6/- (Rupees Six only) per share of Rs. 10/- each.

2016 -PBM Polytex Ltd has recommended dividend @ 30% on the Paid Up Capital (i.e. Rs. 3/- (Rupees Three only) per share of Rs. 10/- each.

This year Company Declared dividend 30% on the paid up Capital i.e 3/- per share of Rs 10 each

Company website : Clickhere

OUTLOOK

Company shares are trading in BSE. Promoter holding in company 74.16%

Company posted 61.39 Cr top line in March qtr.

(QoQ increased 34%)

Net profit is 3.8 Cr in the March qtr.

(QoQ increased 72%)

Company reducing debt.

Debt to equity ratio 0.12

Stock is trading low PE 11 as compared to industry PE & its peers.

Book Value Rs 131

Dividend 30%  Rs 3 per share

Stock is trading at Rs 91.

Company stocks are trading well below its book value of Rs 131, and PE is low as compared to its peers and whole sector. Company has reduced debt and ratio stands against equity is 0.12. Company is very experience in this field of manufacturing cotton yarns for knitting and weaving. As the sector is in the booming mode is a significant positive for the stock.

By looking at the above and significant outperformance in the last qtr , this stock will give good returns to the investors in days to come.

NOTE : THE ABOVE IS NOT A RESEARCH REPORT NOR A RECOMMENDATION  BUT INFORMATION AS AVAILABLE ON PUBLIC DOMAIN. 

Registration status with SEBI: I am not registered with SEBI under the (Research Analyst) regulations 2014 and as per clarifications provided by SEBI: “Any person who makes recommendation or offers an opinion concerning securities or public offers only through public media is not required to obtain registration as research analyst under RA Regulations”