Recommendation: BUY
Equity Research Report: By Kamlesh Bavrva
Part - I Company Overview
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Company Name:
Ambition Mica listed in BSE SME segment (M Group)
BSE
Code: 539223
CMP: 50
and Share Lot Size - 2250
Market
Capital: 59.26 Cr.
Face
Value: 10
52 Week
Low / High: 23/80
Book
Value: 10.54
Dividend
Yield: Nil
Share Pledge
last 2 year: Nil
Current Price/Earning
(TTM): 26.91
TTM EPS:
1.44
52 Week
High/Low ratio – 3.5
Price to
Book Value: 4.74
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Company Profile: Ambition Mica was incorporated in 2010. Company IPO came on June 2015 and w.e.f 14 July 2015 Company listed in BSE SME segment in M group. Ambition Mica Ltd is one of the leading manufacturers of mid segment decorative laminates and door skins. They market laminates under brands like Antique, Art Lam, Antique Aurum, Antique Colourcore and Antique Natural Wood. They also market door skin under brand name Beautique, Texas, Micro Touch, Antique Natural Wood and Door Touch.
They are
specialize in textured laminated and company has diverse range with 1152
designs in laminates and 429 designs in door skins that meets customer fancy.
Company at
Glance:
§ 1st
April 2011, plant started with production of 1mm laminate sheet and door skin
§ 7th
May 2011, company got Quality Management System Certificate and become ISO
9001:2008 Certified Company
§ 13th
January 2012, Bureau of Indian Standard granted ISI certificate to company for
unbeatable quality product.
§ 1st
October 2012, company started another hydraulic press to increase production
capacity 80,000 sheets/month to 1,50,000 sheets/month
§ 1st
November 2013, company became first laminate penal corporation in India who
launch their product in Android and I-Phone via Mobile apps
§ 15th December 2013, company started 3rd
hydraulic press to increase production capacity up to 2,20,000 sheets/month.
Brand: Company markets
laminates products under the brand name of:
§
Antique
§
Art Lam
§
Antique Aurum
§
Antique Colourcore
§
Antique Natural Wood
Distribution Network: Company has
strong dealership in Gujarat and other states.
Company have Antique brand
dealers in -
Ahmedabad,Mahesana,Rajkot,Vadodara,Himmatnagar,Surat,Banglore,Udaipur,Jaipur,Hydrabad,Aurangabad,Hariyana,Raipir,Kanpur,Punjab,Mumbai,Kanpur.
Company have Art Lam brand
dealers in - Ahmedabad,Rajkot,Pune,Mahesana,Vadodara,Surat,Banglore,Indore,Nagpur,Delhi,Hydrabad,Aurangabad.
Products:
1 mm Laminate
§ Antique (24C)
§ Anique Aurum
§ Art Lam
§ Colourcore
§ Natural Wood
0.8 mm Laminate
§
Lam Art
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Share holding pattern as on 31st March 2016
| |
|
|
% Share Holding
|
|
Promoters Holding
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72.97
|
|
Others Public Holding
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27.03
|
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Total
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100
|
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Ambition Mica
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Particulars (in Rs. Cr)
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Mar-16
|
Mar-15
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Mar-14
|
Mar-13
|
Mar-12
|
|
Net Sale
|
49.180
|
38.170
|
35.550
|
20.480
|
13.710
|
|
YOY%
|
29%
|
7%
|
73%
|
49%
|
|
|
Other Income
|
0.140
|
0.010
|
0.020
|
0.010
|
0.000
|
|
Total Income
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49.320
|
38.180
|
35.570
|
20.490
|
13.710
|
|
Total Expenses
|
46.740
|
35.570
|
34.200
|
19.260
|
12.900
|
|
Interest Expense
|
1.790
|
1.560
|
1.140
|
1.190
|
0.940
|
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Depreciation &
Amortization
|
0.500
|
0.460
|
0.490
|
0.380
|
0.290
|
|
TAX
|
0.860
|
0.870
|
0.510
|
0.350
|
0.530
|
|
PBDIT
|
4.890
|
4.620
|
3.000
|
2.790
|
2.060
|
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PBT
|
2.600
|
2.600
|
1.370
|
1.220
|
0.830
|
|
Net Profit
|
1.710
|
1.740
|
0.870
|
0.870
|
0.290
|
|
Equity
|
3.970
|
2.900
|
2.900
|
2.250
|
2.000
|
|
EPS
|
4.300
|
6.000
|
3.000
|
3.900
|
1.500
|
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OPM Margin %
|
9.620
|
12.100
|
8.380
|
13.620
|
14.880
|
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Debt to Equity Ratio
|
0.820
|
1.390
|
2.280
|
3.080
|
2.350
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Interest Coverage Ratio
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2.450
|
2.670
|
2.200
|
2.030
|
1.880
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Current Ratio
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1.150
|
1.120
|
1.125
|
1.085
|
1.081
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ROCE
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10.450
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12.810
|
6.850
|
8.250
|
3.970
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ROE/RONW
|
13.630
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25.230
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19.110
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25.820
|
12.910
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§ Company has increased production capacity from 1,50,000 sheets/month to
2,20,000 sheets/month from December 2015 due to strong domestic demand and it
is a strong sign for the company to grow as management is investing in capex.
§ Strong Management and Promoters group
§ During the year revenue of the company has increased from Rs.3817.63 to
4931.75 Lakhs
§ During the financial period company’s reserves and surplus increased from
Rs. 398.30 to 573.90 Lakhs. The reserve further increased by the Rs. 322.20
lakhs on account of share premium received pursuant to issue of shares through
IPO.
§ The Profit of the company decreased in spite of increase in sales was
mainly due to increased competition in the market.
§ From the above financial data, company has posted over 38 % CAGR in five
years ending March 2016 while net profit came down 1.72 % on YOY basis.
§ From my point of view, any company has report CAGR above 20 is a good
indication. Ambition Mica Net profit has posted over 50% CAGR in five year
ending March 2016 which is above 20%.
§ Interest coverage ratio is 2.450 and in my point of view, interest coverage
ratio of below 1.5 should raise doubts the company’s ability to meet the
expenses on its borrowings.
§ Debt/equity ratio is 0.820 which is below 1
§ Current ratio is 1.15 and in my point of view, higher current ratio
healthier short term liquidity comfort level. A current ratio below 1 indicates
that the company may not be able to meet its obligations in the short run.
§ At CMP 50, Stock is trading at PE multiple of 11.6X to trailing twelve
month earning whereas industry average is 40X. This makes the stock undervalue
at current price.
So I value the company
at conservative PE of 25X the price comes at Rs.107. Hence stock can be a multibagger for the next 3 years.
Please note:
Note: The
articles are not research reports but assimilation of information available on
public domain and it should not be treated as a research report.
Registration status with SEBI: I am not registered with SEBI under the (Research Analyst) regulations 2014 and as per clarifications provided by SEBI: “Any person who makes recommendation or offers an opinion concerning securities or public offers only through public media is not required to obtain registration as research analyst under RA Regulations”
Disclosure: It is safe to assume that I might have the discussed companies in my portfolio and hence my point of view can be biased. Readers should consult registered consultants before making any investments. I am not responsible for any profit and loss and it is not a investment advice. This is only my experience point of view.
Registration status with SEBI: I am not registered with SEBI under the (Research Analyst) regulations 2014 and as per clarifications provided by SEBI: “Any person who makes recommendation or offers an opinion concerning securities or public offers only through public media is not required to obtain registration as research analyst under RA Regulations”
Disclosure: It is safe to assume that I might have the discussed companies in my portfolio and hence my point of view can be biased. Readers should consult registered consultants before making any investments. I am not responsible for any profit and loss and it is not a investment advice. This is only my experience point of view.
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