In the fabric segment, SSML has four brands-Siyaram, Mistair, Feather and J Hampstead. In the readymade garments it has two brands, Oxemberg and MSD (Monday to Sunday Dressing). Nearly 83% of the revenue is generated in the fabric division, 11% from readymade garments and the balance from the yarn division.
With the focus on its core competence viz. fabric manufacturing and on its major markets in Tier II & Tier III cities and the rural areas, concentrating on B and C class cities, the continuous investments in ramping up capacities, it cost rationaliation initiatives and focus on improving margins etc. gives strong visibility to SSML’s revenue & profitability going forward.
SSML’s is liberal in distribution. Apart from handsome dividends it has to its credit three bonus issues-3:5 in 1984; 1:2 in 1988 and 1:1 in 2006. The current strong earnings and fundamentals make it once again an ideal bonus candidate.
For FY11, SSML is likely to post an EPS of Rs.45. At the CMP of Rs.178, the share is trading at a P/E of 3.9 on FY11 earnings. The share is recommended with a target price of Rs.260 in the medium term, which would fetch a gain of about 45%. The 52-week high/low of the share has been Rs.189/79.
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