Thread by @riteshdaga83

#Stylam Ind

Stylam Industries is the one of the fastest growing companies in the high-quality decorative laminates and allied products industry.

The company is engaged in the manufacturing of decorative laminates under the brand name “STYLAM” and

exports its products primarily to European and South East Asian countries. The products of the company find application in furniture and real estate industry.

Asia’s largest single location laminate manufacturing plant with a diverse product portfolio,

catering to a wide range of customer preferences, built with over 30 years of experience in the industry.

Financial

-ROE and ROCE was around 19.3% and 17.3% respectively (Good)

-Face Value: INR 5, MCAP: INR 1800 Cr, Equity Cap: 8 Cr, PE: 23 (Good)

-Q2FY23 topline was around INR 246 Cr Vs. 172 Cr in Q2FY22 up by 43% in YoY.

-FY22 topline was around INR 659 Cr Vs. 480 Cr in FY21 up by 38% in YoY.

-Q2FY23 bottomline was around INR 24 Cr Vs. 15 Cr in Q2FY22 up by 60% in YoY

-FY22 bottomline was around INR 80 Cr Vs. 71 Cr in Q2FY22 up by 12.6% in YoY

-Q2FY23 EBITDA was around INR 40 Cr Vs. 35 Cr in Q1FY23 Vs. 24 Cr in Q2FY22

-Q2FY23 EBITDA margin was around 16.1% Vs. 14.2% in Q1FY23 Vs. 15% in Q2FY22. Therefore up by 170 bps in YoY and 110 bps in QoQ.

- PAT margin in Q2FY23: 9.8% Vs. 8.5% in YoY and 8.9% in QoQ.

-OPM was around 15% and which is in range around 15-17%.

-Promoter hold around 54.6%, FIIs: 5.4% and DIIs: 11.3%. FIIs and DIIs increased their stake in last 3 quarter (Positive trend)

*Opportunities/Strength*

- Global Pioneer for the ‘Hot Coating Process’ of PU+ Lacquer coating on thin laminates. This one-of-a-kind Hot Coating Process machine is made with a patented technology by KLEIBERIT and BARBERAN.

- Pioneer in India for Solid Acrylic Surfaces, setting up the first production line to manufacture these products in India.

- Diversified into a new segment and added a short cycle press capacity for lamination of impregnated paper on Medium Density Fiber (MDF) panels

- About two-third of revenues are derived from exports to over 65 countries; the balance being derived from presence across the Indian subcontinent.

- Margin growth is 18% CAGR in last 5 years.

- The company has reached about 80% capacity utilization level in the laminates division. Company now started modular expansion at the existing facilities that will increase capacity by up to 40%. This will entail a total Investment of INR 40 Cr.

Weakness/Key concern

-Export sales in Q2FY24 by 3% QoQ degrowth.

- Working capital cycle stands at 82 days for the second quarter (vs. 75 days for Q1FY23), due to slight increase in receivables and inventory holding days.

- The domestic laminates industry is highly fragmented with majority of the sector comprising of unorganised players. Competition from both organised as well as unorganised players leads to pricing pressure for the players in the industry.

View: Company is currently trading at reasonable valuation and looks good as an future prospectus. Strengthen domestic presence with a deeper reach and penetration and creation of a strong brand. Investor can accumulate the share based on their risk appetite for long term purpose