Scripscan:Siyaram Silk Mills Ltd
BSE Code:503811
Cmp:303
Target:480
Percentage return:60%
Duration:9-12 months
Story:Siyaram Silk Mills is a part of Siyaram Poddar group. This is a vertically integrated textile company. This company has got in-house facilities for spinning, dyeing, weaving, finishing and also garmenting. The brand Siyaram is available at over 40,000 retail outlets all across the country. Besides that the company is also opening its own exclusive stores where it will sell Siyaram besides other brands, which the company has. Beside Siyaram the company also has Oxemberg and J Hamstead as the other brands under which their garments are sold.Increasing brand consciousness coupled with rising per capita income has stimulated demand for its various products. Vast distribution network facilitates further penetration to have pan-India presence giving it a competitive edge. Increasing capacities coupled with higher utilization is likely to further drive the volume growth.In a highly competitive market the company has successfully differentiated itself amidst both organised and unorganised players through effective branding of its products.The company expects robust demand growth to be aided by higher utilisation and increased capacities across all segments of the company.Siyaram"s vast distribution network of 1,500 dealers and 500 provides it with a competitive advantage. A network this extensive helps it make early inroads with new product lines and styles before competition can bring similar products to the market.At CMP of Rs303, the stock is trading at a very attractive valuation of 5.2 times its fy12 earnings of 58.The company also has got a 20 year track record of uninterrupted dividends.Given its strong brand portfolio, vast distribution network, fairly healthy balance sheet and strong dividend track record,the stock should give 60% return in the next 3-4 quarters.A strong buy altogether.
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