Nakoda, an ISO 9001 – 2000 company, is one of the prominent players in the Polyester Filament Yarn Industry in India. From a modest capacity of 354 MTPA in 1986, Nakoda grew to 50,000 MTPA capacity company by 2008. With the completion of its ongoing backward integration/ expansion / forward integration project with a capital outlay of Rs 333 Cr, Nakoda will achieve a capacity of 1,40,000 MTPA by August / September, 2010. Nakoda is contemplating further investments of over Rs 1,500 Cr to raise the capacity to a level of 5,00,000 MTPA in India and abroad with inorganic growth withÂ future overseas acquisitions.
In the year 1999 the company was successful in acquiring plant and machineries of Garware Nylons Ltd. (in Liqn.) Pune. It has enhanced its POY production capacity to 21600 MTPA in the year 2001. Further, company also acquired POY production facilities of Indian Organic Chemicals Ltd., Chennai. The equipement of same were used at surat plant for further expansion and to enhance production. In the year 2004 POY spinning capacity has been expanded to 31000 MTPA.
In the year 2007 company undertook expansion envisaging addition of 20,000 MTPA of Fully Drawn Yarn (FDY) to the existing capacity. The FDY plant became fully operational in November 2007. FDY is expected to improve both, the top and bottom line of the company significantly as FDY is a more value added product. Unlike POY needs to be texturised before conversion to fabrics while FDY can be directly used for weaving…
Company is on an expansion mode http://nakodaltd.com/news-media.html with investment of Rs. 1500 Cr. lined up for the next 5 years..
With equity of Rs. 33 cr ( 6.6 Cr shares of FV =5 ) the market cap is less than Rs. 100 crores, while the turnover is expected to touch Rs. 5000 cr after the said expansion is complete..Company has acquired a plant in South Korea http://www.bseindia.com/xml-data/corpfiling/AttachHis/Nakoda_Ltd_070810.pdf which is already running.
Company is expected to report an EPS of Rs. 7 for the year ending Dec. 2010.The share is available at P/E of only 2.
Buy at CMP is recommended for 2 years HOLD
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