Equity Watch

Arrow Webtex in its New Avatar is a Goldmine

Arrow Webtex in its new Avatar ( BSE CODE 532848) got listed on 28th May 2007,after getting merged with Crede Holding Co. Ltd. Arrow Webtex old  ( BSE CODE 514193)  was a 23 year old company pioneer in Elastic and Nonelastic Tapes, woven and printed labels having clients such as VIP,Colorplus,Rupa,Jockey,Kouton,Nike,Park Avenue,Zodiac,Dixcy,Heinnes and Mauritz etc .Almost all the top brands and many other garment and under-garment exports and domestic brands.

After merger equity of Arrow Webtex new increased to Rs. 10.5 crores from its earlier equity of Rs. 3 crores. New Arrow Webtex has 3 subsidiary companies namely :

  • Fasttrack Impex Pvt Ltd  in Real Estate Development
  • Aryanish Finance & Investment Pvt ltd  in Real Estate Investments
  • High Street Cruise and Entertainment Pvt Ltd  in Gaming and Entertainment

Latest Results for Q4 ended 31st March appear very encouraging:

Scrip Code : 532848    Company Name : Arrow Webtex Ltd

Type Audited
Date Begin 01 Jan 07
Date End 31 Mar 07
Description Value(Rs. million)
Net Sales 208.03
Other Income 0.49
Total Income 208.51
Expenditure -59.8
Operating Profit 148.71
Interest -15.43
Gross Profit 133.28
Depreciation -4.67
Profit before Tax 128.61
Tax -29.7
Profit after Tax 98.91
Net Profit 98.91
Equity Capital 105.05
EPS 9.42
Nos. of Shares – Non Promoters 2946766
Percent of Shares – Non Promoters 28.05
Result Type Q
  Notes

Considering that its the 1st Quarter after merger, an EPS of Rs. 9.4 on equity of Rs. 10.5 crores amounts to an EPS of Rs. 33.25 on premerger equity of Rs. 3 crores. and gross margin EBIDT of 71% and Net margin of about 50% is really awesome.On a prorata basis co. should show top line of Rs. 80 +crore with EPS of Rs. 40 for FY08.

 Arrow Webtex OLD on an equity of Rs. 3 crore had an EPS of  Rs. 45 for FY06 and was commanding a price of Rs. 948 ( 52 weeks High ) as on 27th April 2006

Scrip Code : 514193    Company Name : Arrow Webtex Ltd  OLD

Type Audited Audited Audited Audited
Date Begin 01 Apr 05 01 Apr 04 01 Apr 03 01 Apr 02
Date End 31 Mar 06 31 Mar 05 31 Mar 04 31 Mar 03
Description Value(Rs. million)
Net Sales 308.06 145.93 185.9 72.62
Other Income 20.41 13.06 1.34 3.92
Total Income 328.46 158.99 187.25 76.54
Expenditure -130.76 -104.98 -133.81 -69.63
Operating Profit 197.7 54.02 53.44 6.91
Interest -0.35 -0.95 -3.93 -0.96
Gross Profit 197.35 53.07 49.5 5.94
Depreciation -6.99 -8.84 -8.9 -7.82
Profit before Tax 190.36 44.23 40.6 -1.87
Tax -57 -12.95 -6.53
Profit after Tax 133.36 31.28 34.07 -1.87
Prior Period Items 1.3
Net Profit 134.66 31.28 34.07 -1.87
Equity Capital 30.01 30.01 30.01 57.54
Reserves 178.23 79.09 54.27 13.26
EPS 44.87 10.42 11.35 -0.33
Nos. of Shares – Non Promoters 841933 798807 773807 3094874
Percent of Shares – Non Promoters 28.05 26.61 25.78 53.78
Result Type A A A A
  Notes

For FY 08 we expect EPS to exceed Rs. 50 and the share may command P/E of atleast 20 and thus market price may touch  Rs. 1000  or near about in one year .

BUY at CMP of Rs. 225  is recommended with atleast one  year HOLD

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