Mayur Uniq

For the past couple of days, Mayur Uniquoters has been hitting new highs and been consistently in the green. The stock got into the limelight after its Board approved raising Rs.70 crore through preferential allotment to PE firm, West Bridge Capital. Funds raised will be used for capital expansion purposes, including setting up a PU Plant. The issue of compulsorily convertible participating preference shares was made to the WestBridge at Rs.471.06/share. 12 months from date of allotment of these CCPS, the preference shares will be converted into two equity shares for every one CCPS at a price of Rs.235.53/share. After conversion of the CCPS into equity shares, promoters stake which currently stands at 70.80%  will come down to 66.26% and WestBridge will hold 6.42% stake.

This company is one of the leading manufacturers of artificial leather/PVC Vinyl with a capacity 1.85 million linear/month and is currently operating full throttle at full capacity. The company has made a niche for itself by concentrating on providing quality leather to auto (upholstery), footwear and furnishings sectors, giving it better margins and beating intense competition from the unroganised sector. Many leading Automotive OEMs like Ford, Tata Motors, Chrysler, Maruti, M&M, Swaraj, LML, Nissan, LML, Honda Motorcycles BMW, and Daimler have the company on their approved vendor list. This is the only Indian company to get a foothold in the international auto sector. It is also a supplier to leading footwear manufacturers like Bata, Liberty, Action, Paragon. Even in the replacement market it has made a good base for itself. The company just declared a 1:1 bonus and yesterday was the record date. The company has declared a 1:1 bonus in FY13 too.

The company has put up a good performance for Q3FY14, with net profit showing a YoY rise of 40% at Rs.14 crore. This was on a 28% rise in net sales at Rs.118 crore. The company has integrated backward to make synthetic knitted fabric which is a huge raw material apart from chemicals like PU and PVC. This gives the company excellent quality of fabric, brings down its own procurement cost and more importantly, will get more market share in export as well as domestic market due to lower rejects thus increasing the margins. The capacity of the company is presently at about 19 lakh meter/month of this artificial leather which will get ramped up to about 21-22 lakh/meter post this backward vertical integration. For 9MFY14, the company posted a net profit at Rs.38 crore compared to Rs.43 crore for 12MFY13. Clearly, FY14 will end on a much higher note.