Indo Count Industries Limited: - Buzzing stock
Incorporated in 1988, Indo Count is an integrated bed linen manufacturer with a focus on processing. Promoted by Mr Anil Kumar Jain, the company has three businesses - home textiles, yarn and electronics.
Company derives major revenues from its textile business. Indo Count is vertically integrated right from spinning to finished made ups. Indo Count has the right scale of production to suit big retailers' requirements. The company believes “Economies of scale can be made very effective to be competitive on product offers and successful products can be made the best buy products”.
The company has seen significant improvement in profitability in terms of operating margins and net profit margins over 5 year period. L&T mutual fund, Birla sunlife mutual fund and UTI mutual fund are few of the fund houses which have invested in this counter. Indo Count Industries ltd. has a state of art manufacturing facility and is an integrated home textile company. The company has global presence and its innovation leads to new products that performs well in the market.
In its presentation the company has mentioned following points as favourable for the counter :-
- Availability of cheap raw material in India
- Competitive cost structure (power and manpower costs)
- Rising government costs and favourable policies
- Free trade agreeemnt with ASEAN countires
- Porposed agreement with EU
- Improving demand in US economy.
However analyst see it as risk that Indo Count generates 2/3rd of its revenues from US alone. The counter is trading at a PE multiple of 19.75 with a market capitalisation of 2877.10 crores. The stock has delivered 101 percent returns on YTD basis and in one year the stock has delivered a whopping 610 percentage returns. On a three year basis the stock has generated 335 percent returns and on a five year basis the stock has delivered 146.90 percent returns. Investors are well advised to track this counter from a long term investment prespective.