Kitex Garments Ltd. share price target

Over the FY12-16 period KGL's revenue, EBITDA and PAT have grown at a CAGR of 15%, 33.7% and 42.6% respectively. The EBITDA and PAT margins of the company are consistently improving and stands at 34.1% and 20.5% respectively as of FY16. KGL is targeting sales growth via three mediums; it's own brand Little Star, licensed agreement with Lamaze and private label business. The management has given revenue guidance of approx. Rs.1,300 mn from Lamaze and Little Star in FY18. The company added a new client Sam's Club, in the first half of the current fiscal, which is a subsidiary of Walmart and is in the wholesale format business. This is a huge...

Results in line with expectations: Kitex Garments' (KTG) 1QFY17 revenues grew 9.4% YoY to INR1.2b (v/s est. of INR1.1b), led by higher garments (+6.6% YoY) and net fabric (+23.1% YoY) revenues. EBITDA margin expanded 80bp YoY to 28.4% (v/s est. of 29.5%), while PAT grew 31% to INR209m on account of lower interest outgo. Management continues to maintain its guidance of 20% annual growth over the next three years due to new client additions and commensurate capacity addition. After increasing capacity to 320,000 pcs/day from 270,000 pcs/day, the company aims to sustain this momentum, which...

Revenues meet estimates; margins miss: KTG's 4QFY16 revenue grew 16.7% to INR1.8b (est. of INR1.7b) led by garments which grew 13.6% and net fabric revenues which grew 46.5%. EBITDA margins contracted 510bp YoY to 37.6%...

Kitex garments is the third largest global player in the infant wear with a significant market share of 70% in India. It has marquee clientele like Mothercare, Toys R us and Jockey who procure products from Kitex, which contributes significantly towards margin improvement and robust revenue growth for the company. Capacity Expansion to be a Major Revenue Driver: Kitex has current fabric capacity of 48 MT & 0.55 mn pcs/day garmenting capacity; & is targeting a capacity of 1.1 mn pieces/day in two years. The management expects capex of Rs.350-450 mn for the group & Rs.150-200 mn for Kitex garments exclusively over the next 2 years.

Kitex Garments Ltd (KGL) together with its sister concern Kitex Children Ltd. (KCL), a part of the Kerala based Kitex Group, is the world's third largest exporter of infant wear (0-2 yrs old). The group boasts of a state-of-the-art manufacturing facilities totaling 110,000 sq.mts, spread over 60 acres of land near Kochi. The group has launched a spirited expansion plan, with the fabrics capacity has already doubled and the Garments capacity to be doubled over the next couple of years. This should see them emerge as the world's leading infants wear maker. With some of the world's best brands such as Toys r' Us, Gerber and Jockey in their client list, KGL is now focusing on deepening the relationship with key large clients to...