Ludlow Jute
Ludlow Jute happens to be the only jute mill in India built by the Americans. The mill was purchased by S.S Kanoria group from the Americans in 1977. They now hold 67.20% equity of the company. Its production capacity stands at 60,000 mtpa. It is stated to be one of the most modern and mechanized jute mills of India.
Recently the Govt approved mandatory use of jute packaging material for foodgrains and sugar. It has said that at least 90% of foodgrain output and 20% of sugar production will be reserved for packaging in jute, for a period of July 1, 2015 to June 30, 2016. This is expected to boost demand and that’s precisely why jute stocks are in the reckoning.
Financially, we can see the phenomenal rise in its raw material costs – raw jute prices. Ludlow’s raw material costs rose by 55% but thanks to the 25% jump in net sales at Rs.1034crore, it could end the quarter with a net profit at Rs 60 lakh v/s Rs.2.5 crore (YoY) and Rs.1.5 crore net profit in Q3. EBITDA came in at Rs.4 crore v/s loss of Rs.2.5 crore (YoY) and margins were good at 3.5%.
The company ended FY16 with a 53% jump in net sales at Rs.351 crore and net profit of Rs.6 crore v/s loss of Rs.4 crore in FY15. Its borrowings have gone up 77% to Rs.39 crore. It ended the year with an EPS of Rs.5.27 (face value Rs.10).
Its equity stands at Rs.10.80 and reserve is at Rs.29 crore.