In 2012, Sudar Industries extended to the manufacture of pharmaceutical intermediaries and agro-chemicals following the acquisition of a chemical unit in Vadodara (Gujarat, India). The company specializes in the manufacture of shirts, trousers and other apparel for men, women and children.It markets apparels, under its own brand "Glory to Glory". The company is also engaged in contract manufacturing for Indian brands and merchant exporters. The core business (apparels) contributes approximately 62% to the company’s top line while the chemicals and intermediate business (specialty chemicals) accounts for the remaining 38%.
The Company has two manufacturing facilities as under :
- Integrated Apparel Manufacturing facility at Khalapur, Raigad District, Maharashtra employing state of the art technology and automated machineries to manufacture readymade garments, catering to men, women and children.
- Manufacture of high end fine chemicals at Baroda providing intermediate products for Pharmaceutical Industry and Agro Chemical Industry
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Financials: In FY14, the company came out with excellent set of numbers. The Net income of the company in FY14, zoomed to Rs.856.43 Cr as against Rs.440.02 Cr in the corresponding period previous year. The net profit of the company in FY14 came out to be Rs.41.07 Cr as against Rs.25.58 Cr in FY13. The EPS of the company for FY14 came out to be Rs.18.25 as against Rs.11.38, in the corresponding period previous year.
For Q2FY15, the total income of the company came out to be Rs.302.79 Cr as against Rs.223.04 Cr in the same period previous year. The PBT of the company for Q2FY15 came out to be Rs.19.25 Cr as against Rs.7.02 Cr in Q2FY14. The net profit of the company almost tripled to Rs.13.01 Cr in Q2FY15 as against Rs.4.74 Cr in Q2FY14. Th H1FY15 EPS of the company stands at Rs.10.87. There were also marked improvements in the OPM and NPM.
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Conclusion: SIL is present in a competitive market with challenges from big and the small players in the industry. Due to this, the price sensitivities get tested where reliance is placed more on volume based business. This threat, however, does not affect Sudar because of its control over raw material sourcing. The company is a dominant player and has been able to control quality, save timelines, manage costs and deliver at a short notice. SIL enjoys a pricing power with an ability to get the price lower and yet manage to get higher returns than other competitors. The key strengths of the company include its manufacturing infrastructure and the ability to deal successfully in a complex market situation. Sudar has set ambitious goals for 2014-15 in expectation of an upward trend in the global economy. The senior leadership team has set in motion a set of strategic initiatives to enhance revenue and profitability. The focus will be expanding markets, portfolio profitability will be analyzed on a continuous basis. By implementing these strategies, Sudar aims to increase revenues and margins higher than the industry average. The company is targeting to emerge as cash flow positive, eliminate leverage and enhance shareholder returns.