Himatsingka Seide

Last week, the stock was in the limelight when it scaled a new high at Rs.45.90, with no apparent announcement coming from the company. A look into the financials of the company shows that the company is poised to do well in FY13. Infact the company was mired in losses a few quarters ago and in current H1FY13, it has shown a YoY rise of 22% in consolidated net sales at Rs.834 crore. Though the interest outgo remains very high, it was at Rs.33 crore for the H1, it posted a 10% rise in net profit at Rs.22 crore. Net profit for 12MFY12 was at Rs.33 crore which means that clearly, with two more quarters to go, if the company is able to maintain the same momentum, it will end the fiscal on a much higher note. Its distribution revenues in North America through Calvin Klein Home, Barbara Barry and other brands grew 6% while that in Europe, through its brand “Bellora” fell 19%. Its brand, Atmosphere, in India, Middle East and SE Asia, grew 14%.

The company seems to have fully recovered from its forex derivatives contract. The company has stated that as on 9th Aug, the liability on account of a forex derivative contract was crystallised at Rs.15.54 crore. The company provided Rs 18.24 crore on account of the above contract as on June 30. As per the risk management policy, the company continues to hedge foreign-currency exposure through forward-exchange contracts and it has no other derivative contracts. Cotton price, its main staple raw material has also stabilized and prices are expected to remain around same levels. What remains a worry though is its high debt, which currently stands at around Rs.600 crore.