Thread by @TechnoFunda6

#RajapalayamMills - Small-cap stock for 50% gains in short term & 2X in medium term.

CMP – 1219.10 (13/1/22)

Sectoral Tailwinds, Highly Undervalued, Capex, Breakout on Cards ...

(Must read🧵Thread for Investors !)

@caniravkaria Views Invited

#TechnoFunda

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#RajapalayamMills Limited is flagship mill of the Ramco Group’s Textile Division.

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@Anshi_________ Views Invited.

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Ramco Group Textile Division, produces a wide range of yarns from Cotton, Lenzing Modal & Tencel fibres to meet requirements of top class customers across the world.

Ramco Group Textile Division has 18 units across the country.

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Other listed Companies of #RamcoGroup include #RamcoCements, #RamcoSystems and #RamcoIndustries.

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Company is engaged in manufacture of cotton yarn & fabrics.

Its products include Ring Yarn, Compact Yarn, Eli-Twist Compact Yarn, TFO Doubled Yarn, Gassed Yarn, Slub and Multicount Yarn, Model/Tencel Yarn, OE Yarn and Organic Cotton Yarn.

#RajapalayamMills

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Company exports its products to markets, such as Japan, Korea, China, Hong Kong, Malaysia, Indonesia, Thailand, Pakistan, Dubai, Bahrain and Italy.

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@adarshforindia (Views Invited)

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Manufacturing plants of the company are located in Tamil Nadu and Andhra Pradesh.

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Company is also engaged in generation of electricity from its windmills for its captive requirements.

Its wind mills are located in areas, such as Dhanakkarkulam, Irukkanthurai and Uthumalai in Tamilnadu.

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Yarn market in India has bounced back after 2 yrs of slowdown. Due to trade war between US & China and diversion of sourcing textile products by top global brands from China to India demand for textile products including yarn manufactured in India is boosted.

~ Company AR

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Sales Figures in FY 20-21 vs FY 19-20

Mercerized Yarn – 302 Tonnes vs 154 Tonnes
Modal / Tencel Yarn – 329 Tonnes vs 176 Tonnes
Dyed Yarn – 133 Tonnes vs 12 Tonnes

Source : Company AR

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🔟

Company is taking various steps to expand its market presence both in domestic and international markets and hope to achieve higher volume of sales in value added yarns in the forthcoming years.

#RajapalayamMills #TechnoFunda #StockMarket #Investing #Trading

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As part of modernization programme, company replaced Open End Spinning (OE) Machines with fully automatic OE Machines at a cost of Rs 45 Crores.

Company also invested Rs. 59 Crores in last 2 years for modernizing other textile machinery & equipment.

#RajapalayamMills

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In order to take advantage of current higher demand for yarn, the Company has also proposed to expand the spinning capacity by adding 18,144 spindles in Rajapalayam by utilizing the existing building space.

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The Company is also planning to expand the weaving capacity by adding 30 Looms, which will increase the existing looms capacity from 122 Looms to 152 Looms.

#RajapalayamMills #TechnoFunda #StockMarket #Investing #Trading

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Total outlay for all the above capex proposals is Rs 180 Crores, which will be funded from proceeds of Rights Issue, internal accruals and term loan from Banks.

#RajapalayamMills #TechnoFunda #StockMarket #Investing #Trading

Source : Company AR

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Posted excellent results in Sept Qtr.

Net Sales – 171 Crs vs 135 Crs (QoQ) vs 107 Crs (YoY)
Net Profit – 12 Cr vs 5 Crs (QoQ) vs -8 Crs (YoY)

Qtr Results, P&L, Balance Sheet & Cash Flow attached

@nid_rockz & @caniravkaria Views Plz.

#RajapalayamMills #TechnoFunda

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📈Technical Analysis📈

✅Stock is already in strong momentum

✅Breakout on cards

✅20 SMA crossed 50 SMA from below (Bullish)

✅20 SMA crossed 100 SMA from below (Bullish)

✅Stock is becoming relatively stronger than Nifty.

#RajapalayamMills #TechnoFunda #StockMarket

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Stock is trading above all major SMA and EMA ...

10, 20, 30, 50, 100 and 200.

🌟Super Bullish Sign🌟

@Anshi_________ (Views Invited)

#RajapalayamMills #TechnoFunda #StockMarket #Investing #Trading

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🌟Main Investment Rational🌟

Company holds shares of group companies – Ramco Cements, Ramco Systems & Ramco Industries

Current market value of those investments = Rs. 4302/Share

Market Price of #RajapalayamMills should be at least 1700 (applying 60% holding discount)

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✅Favorable government policies for #Textile Sector
✅Export promotion policies for Textiles Sector
✅100% FDI is allowed in Textile Sector under automatic route.
✅PLI Scheme - Rs. 10,683 crore for 5 Years.

#RajapalayamMills #TechnoFunda #StockMarket #Investing #Trading

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Market Cap – 1049.10 Crs
Equity – 8.6 Crs
Promoter Holding – 55.12%
Promoter’s Pledge – 0%

Retail Holding – 21.59% (~ 18 lakh shares)
Out of this ~ 13.52% held by 21 people (~11.63 lakh)

Technically less than 7 lakh shares is floating stock

#RajapalayamMills #TechnoFunda

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Noted long-term investor Govind Parikh hold’s 5.02% stake in the company. He recently bough 60,953 shares at avg price of 930 in December 2021

In September 2021, Promoter Smt. P.V. Nirmala Raju bought 25,130 shares in September 2021 at avg price of 1009

#RajapalayamMills

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Word of Caution

❎Low Volumes
❎Company has low interest coverage ratio
❎Poor sales growth over past five years
❎Low return on equity for last 3 years

#RajapalayamMills #TechnoFunda #StockMarket #Investing #Trading

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Disclaimer : This is not a stock recommendation on #RajapalayamMills. Just a case study for educational purpose explaining #TechnoFunda!

Our team members may be personally invested in the stock hence their opinion may be biased.

Consult Financial Advisor before Investing!

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