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Indian Luggage Sector
Safari Industries


Safari Industries FY19-20 AR is a good read compared to VIP Industries.

Company is also planning to Diversify in other segments of business in line with VIP Industries.

Few key points:
(1) To attract the foreign investments and to make more space for the FPIs/ FIIs to invest in the equity share capital of the Company, it is proposed to enhance the investment limits of FPIs/ FIIs in the Company upto 49% of the paid-up equity share capital of the Company.
(2) In order to meet with pace of changing business environment and needs, the Company proposed to enlarge its scope of operations. Accordingly, the Object Clause of the MoA Clause III A (2) shall be altered in order to cover wide range of business activities therein.
(3) The Company has an unlisted Indian subsidiary viz. Safari Lifestyles Limited which is not a material subsidiary. (8.30 cr turnover & 0.28 cr loss)
(4) Ratio of the remuneration of each director to the median remuneration of the employees of the company for the FY: 40:1
(5) The number of permanent employees on the rolls of company: 1388 employees
(6) The percentage increase in the median remuneration of employees in the financial year: 8.47%
(7) Percentage to total turnover of the company
Hard Luggage’s: 32%
Soft Luggage’s: 68%
(8) Interesting to note buyers on 20/03/2020:
Malabar India Fund Ltd- 2664 shares
Saif India VI FII Holdings Ltd- 2,978 shares
Mr. Ashish Kacholia- 8,415 shares
(9) Efforts made in technology absorption: • Replaced 3 stage forming machines with 2 stage forming machines.
(10) By using 2 stage forming machines company has reduced the sheet size & offcut generation. This has resulted in saving of Electricity per luggage & increase in Extruder capacity.
(11) Following value engineering projects resulted into major cost benefits:
(12) Nylon shell lug was replaced with new PP lug with slim design thereby reducing the overall cost of product.
(13) Zipper width reduced from 40 mm to 36 mm to reduce the cost & improve the product finish
(14) Kissing puller replaced with non- kissing type puller
(15) Trolley internal bracket removed across all sizes
(16) Aluminum logo which was used in majority of products was modified to reduce the cost by using the MS bracket for fixture.
(17) Started using lining of 190T specifications in all the Magnum products thereby reducing per meter lining cost.
(18) Identified & started using TSA lock with per unit price less than the lock which was used earlier.
(19) Major cost saving derived by removing the elastic & fastener from the top convi- pack.
(20) Import substitute: Additional tooling for PVC handle developed to get 100% qty. from India.
(21) Imported metal logos were replaced with low cost plastic logos developed in India leading to reduced lead time, reduced currency risks and cost savings.
(22)During the year the E-commerce channel continued to grow well with increasing digital penetration and increasing shopper maturity to make higher ticket purchases online.
(23) The Magnum brand continued to grow well with an enhanced product portfolio targeting mass market value seeking consumers
(24) The Genie brand continued to innovate with a wider range of feminine designs targeted specifically at teenage and young girls.
(25) The brand grew well in the Backpack category and also forayed into a wider range of accessorized bags.
(26) The Genius brand widened its product portfolio to include innovative Backpacks targeted at toddlers and kids, expanding its target segment to all young boy.
(27) This is in line with the company's strategic intent targeting the high-growth Backpack market with multiple brands targeting specific consumer sub-segments.
(28) Imported Soft luggage and Backpacks are a major contributor to the sales of the Company.
(29) The Company increased its thrust on Polycarbonate zippered case category in line with shifting consumer preference away from soft luggage.
(30) Company has started hedging its foreign exchange exposure to mitigate its risk arising out of foreign exchange fluctuations.
(31) The Company is also increasing its domestic procurement of Soft luggage and Backpack categories, apart from scaling up the revenue mix from Polycarbonate Uprights produced at its plant in Halol, Gujarat.
(32) Significant growth was observed in the Polycarbonate zippered case category, due to an accelerating shift of consumer preference away from Soft Luggage to more durable and premium looking hard luggage.
(33) The Company is prepared to tap into this opportunity by introducing a wider range of Polycarbonate zippered cases and enhanced production capacity at its manufacturing plant in Halol, Gujarat.
(34) Company discontinued its product ranges of Polypropylene framed hard luggage, given the lack of consumer demand in this category. Consumer preferences have shifted away from traditional framed hard luggage towards the convenience of light and 4 wheeled travel products.
(35) To take advantage of shifting consumer tastes towards Polycarbonate zippered cases, the Company has made investments to upgrade and increase its manufacturing capacity of polycarbonate luggage at its Halol Plant.
(36) To diversify its supply chain and reduce costs, the Company is also increasing its outsourcing of soft luggage and backpacks from India and Bangladesh.
(37) Considering the uncertainty induced by the COVID 19 pandemic, the outlook for the current year looks muted.
23/n Consolidated Annual Nos
(38) Revenue from Ops at 686.82 cr vs 578.96 cr +19%
Gross Profit at 583.01 cr vs 505.11 cr +15.42%
Operating Income at 49.48 cr vs 44.14 cr +12%
EBITDA at 71.95 cr vs 52.45 cr +37%
PBT at 40.22 cr vs 40.97 cr -2%
PAT at 30.66 cr vs 27.21 cr +12.70% Safari Industries Chart att...
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