Scripscan:Indus Fila Ltd
cmp:13
Code:532821
Story:Incorporated in 1999, IFL was listed in 2007.Indus Fila Limited engages in the manufacture and sale of textiles in India. It offers woven fabric of cotton mixed with manmade fiber, woven fabric of cotton, men’s or boys’ shirting, and women’s or girls’ blouses shirts and shirt-blouses. The company also exports its products to the United States and the European markets.It has its registered office in Bangalore. In FY11, IFL reported revenues of 439crs, with a net profit of 2crs.Despite restructuring in 2009 with a moratorium till FY10, the company has been unable to repay its debt obligations to date. This is attributed to the company's tight liquidity position due to its stretched working capital cycle and debt-funded capex which resulted in huge negative cash flows. The company also suffered mark-to-market losses on its forex contracts, further aggravating its liquidity position.Before taking any positive call on the scrip one should continue to monitor IFL's financial performance and its ability to meet its debt obligations. A positive rating guideline would be regularity in debt service for at least six months.Thus a hold at present levels.
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