equity research on brfl

8/14/2019 Equity research on BRFL

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-:BOMBAY RAYON FASHION-:BOMBAY RAYON FASHION

PRESENTED BY:

SIDHARTHA SANKAR SAMALSIDHARTHA SANKAR SAMAL


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FUNDAMENTAL ANALYSISFUNDAMENTAL ANALYSIS


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Account 14% to total industry out put. Accounts about 30% in the total export Global recession

Less export orders

Price of raw materials like cottons

Bottleneck like Power,Tamilnad Growing Economy and potential domestic and international market Abundant Raw material availability that helps industry to control costs and

reduces the lead time across the operation. Availability of low cost and skilled man power provides competitive

advantage to industry.

Growth rate of domestic textile industry is 6-8% per annum Greater investment and FDI opportunities are available.

TEXTILE INDUSTRYTEXTILE INDUSTRY


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According to Shri. R.K. Dalmia, Chairman of the Confederation of Indian TextileIndustry :-

Stimulus package

v It has also been affected by negative government decisions

Reduction of drawbacks rates withdrawal of interest subvention on export credit

Increase in minimum support prices for cotton .

Exchange Rate

Export earnings increased as Rupee depreciates (50% to USA Exports)

GDP- Has Decreased

Inflation has Increased put negative impact

ECONOMY ANALYSISECONOMY ANALYSIS


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It was incorporated as Mudra Fabrics Private Limited (MFL) on May 21,1992

On October 13, company was converted into a public limited company.

On September 30, 2004 it was named as Bombay Rayon Fashion limited(BRFL).

Promoter Mr. Janardhan Agrawala. Mr. Aman Agrawal and Mr. PrashantAgrawal

Share holdings:- The major chunk(Till 30/9/2008)

Indian Promoter-48.42%

Mutual Funds-12.82

FIIs-37.92

COMPANY ANALYSISCOMPANY ANALYSIS


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PEER VALUATIONPEER VALUATION

i h i d b f h f ll


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Operating Segments: It has capacity to produce 28.8mn garments but after the fullexpansion, the capacity will reach approximately 71.4mn pieces. It has sold 14.64mnpieces of garments in FY08

The current capacity of fabric manufacture is 55mn meters, out of which it has sold

48.86mn meters during FY08.After the expansion the fabric capacity will reach approx235mn meters of fabric

The company has taken up massive expansion plans, which include setting of garmentmanufacturing capacity of 100000 pieces per days and fabric capacity of 180mn/annum.

Garments unit are coming up at Ichalkaranji, Nanded, Latur and Osmanabad.

COMPETITIVE OPERATIONAL BUSINESS MODEL:- The company has yarndyeing, processing, and garment sewing at the same loca-tion, which helps it to reducethe lead time to 30 days.

Labor Intensive Industry- China and India (Beneficiary)


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TECHNICAL ANALYSISTECHNICAL ANALYSIS


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Major AcquisitionsMajor Acquisitions


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FINANCIAL OUT LOOKFINANCIAL OUT LOOK


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FORECASTED FIGUREFORECASTED FIGURE


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TREND LINETREND LINE


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5 DAYS MOVING AVERAGE5 DAYS MOVING AVERAGE


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50 DAYS MOV.AVG50 DAYS MOV.AVG


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EXPO NENTI AL MOVI NG AVERAG EEXPON ENTI AL MOVI NG AVERAG E


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Interpretation:- In our case BRFL the beta of its stock is 1.03, its more than1,it will react 3%

more strongly than the average ups and downs of the market. Its better in risingmarkets ; they tend to rise in the value more.

In our case the correlation of BRFL is 0.46307.It means the security will move inthe same direction of the market

It means if the market return is high the return on security will be high and vis-versa. But the return will vary .04% than the market return.


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RESISTENCE AND SUPPORTRESISTENCE AND SUPPORT


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CONCLUSIONCONCLUSION

HOLD EXISTING BUY

NEW ENTRANT


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equity research on brfl

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