Eastern Silk Industries Ltd:Future growth prospects and outlook,buy/sell/hold,analysis and recomendation

Scripscan:Eastern Silk Industries Ltd
cmp:13
Code:590022

Story:EASTERN SILK INDUSTRIES, LTD. engages in the manufacture, sale, and export of silk yarn and fabrics primarily in India. It offers fabrics and made-ups, home furnishings, fashion fabrics, handloom fabrics, double width fabrics, scarves, laces and belts, and embroidered fabrics. EASTERN SILK INDUSTRIES exports its products to the United States and Europe, as well as to Australia, the Middle East, and the Far East. The company was founded in 1946 and is based in Kolkata, India.India is the second largest producer of silk and international acceptance of its textile designers is improving its positioning in the global silk industry. Indian textile industry also stands to gain considerably from the removal of export quota restrictions, US restrictions on Chinese textile imports and value-added quality.The company has started a new plant worth INR 800mn in Bangalore which has been recently operational.This will surge the total production capacity of silk yarn and fabrics.The company is now focusing on machine made silk fabrics rather than handloom made silk fabrics. Machine made silk fabrics fetches higher margins and have better demand in developed countries.ESIL plans to venture into domestic markets due to an increase in demand for silk in the furnishing sector in India. The margins in the domestic markets are higher as the finished products are sold to the retailers directly.We have initiated a coverage with a price target of INR 22 giving an appreciation potential of 70% in the next 2 years.