Premco Global Ltd. share price target

ICICI Securities Ltd | Retail Equity Research Premco Global (Premco) reported a muted Q3FY17 performance; with net sales for the quarter coming in at | 17.5 crore, down 12% YoY. The sales de-growth was largely tracking muted export sales and a slower-than-expected pick-up from the Vietnam plant From Vietnam, Premco reported sales of | 3.2 crore for the quarter with just breakeven at the EBITDA level On a consolidated basis, EBITDA in Q3FY17 came in at | 2.7 crore...

ICICI Securities Ltd | Retail Equity Research Premco Global reported a fairly decent Q2FY17 performance; largely tracking our investment rationale. Net consolidated sales for the quarter were at | 21.7 crore, down 3% YoY. The company reported external sales of | 1.5 crore from the Vietnam facility for this quarter On a consolidated basis, EBITDA in Q2FY17 came in at | 5.6 crore (EBITDA margin at 25.9%) while PAT in Q2FY17 was at | 3.0 crore Premco commenced operations at its Phase I unit in Vietnam in...

PREMCO GLOBAL LTD recently attended the AGM of Premco Global (Premco) and met Lokesh Harjani, Executive Director at Premco, to get an insight into the global narrow elastic industry and the company’s role in the value chain. Premco is a technical textile company established in 1966. It is primarily into manufacturing woven & knitted narrow elastic fabric, which find application in innerwear (both men & women). The company has an installed capacity of 11.1 crore metre annually with production at ~9 crore metre in FY16, implying capacity utilisation of ~80% and blended realisation of ~| 9/metre. Premco is primarily an export unit with export sales at ~65% of sales. Domestically, the company’s key clients are Rupa, Lux among others while in exports key client is Hanes (US). In FY13-16, sales grew at a CAGR of 11.6% while EBITDA & PAT grew at a CAGR of 32.0% & 34.6%, respectively. In FY16, sales were at | 73.5 crore, EBITDA at | 20.1 crore (EBITDA margins at 27.3%) and PAT at | 12.6 crore. Premco is in the midst of executing a capex programme (capacity 7 crore metre), which will result in healthy sales and PAT growth, going forward. However, the company is susceptible to foreign exchange risk due to high exposure to foreign currency.