Scripscan:Katare Spinning Mills Ltd
cmp:21
Code:502933
Investing-reflections:Katare Spinning Mills operates in the textile (cotton yarn) and hotel industries.The profits on both segments are similar.Management expects cotton yarn demand to remain strong domestically and internationally over the long run.The company operates a hotel in Solapur with about 54-room capacity. It is enjoying reasonable occupancy rates as a result of tourism and industrial development around the area as well as a refurbishing exercise undertaken on the hotel in the previous year.The company reported reasonably stable operating profits (but declining margins) on growing revenues – reporting over 2cr in operating profits on revenues of 47cr.Its net debt load appeared to be backed by net current assets alone.The business is exposed to hikes in cotton prices, which shot up over 100% in the previous year.This has resulted in lack of demand and un-remunerative prices resulting in poor returns on substantial capacities added in previous years. Inflationary factors also raise other costs, which the company is unable to pass on effectively to customers as a result of relatively low bargaining power with brand-name customers.The textile industry suffers from periods of overcapacity depressing selling prices and profit margins.Overall, the industry is notorious for generating low returns on capital.The company, being a net exporter, is adversely impacted by the recessionary economic conditions in customers’ countries as well as a strengthening INR.Besides, government policies on cotton and yarn exports distort the demand/supply equation, which affects the company’s results (usually adversely).
Search This Blog(Over 800 companies covered in the blog).
Archives : Old artciles
Important Disclaimer&Privacy policy
This blog does not share personal information with third parties nor do we store any information about your visit to this blog other than to analyze and optimize your content and reading experience through the use of cookies.You can turn off the use of cookies at anytime by changing your specific browser settings.This privacy policy is subject to change without notice and was last updated on 20.3.2013. If you have any questions, feel free to contact me directly here: arunsharemarket@gmail.com
Investment in equity shares has its own risks.Sincere efforts have been made to present the right investment perspective.The information contained herein is based on analysis and up on sources that I consider reliable. I,however,do not vouch for the accuracy or the completeness thereof.This material is for personal information and am not responsible for any loss incurred based upon it & take no responsibility whatsoever for any financial profits or loss which may arise from the recommendations above.The stock price projections shown are not necessarily indicative of future price performance.The information herein, together with all estimates and forecasts, can change without notice.
