strong buy eastern silk industries ltd. 12 months target rs.120. falling rupee will give boost to its profits going forward. promotors already given clear indication that their is no pending derivative transacions. and also confirmed that going forward margins will improve. if rupee goes to 44 or 44.5 it will give futher boost to profits. one more thing when rupee appreciated from rs.49, 48, 45, 42, 40, 39.5 , 38.5 this stock underperformed due to margin errosion. now when rupee is falling rapidly even when rbi is trying to protect rupee value.

its time to buy eastern silk industries ltd, high interest rates will dampen the bullish sentiment in real estate sector. it will not dampen the bullishness of consumer sectors. because 95% of people will not take loans to buy clothes.

Buy Eastern Silk Industries: Tulsian
Published on Fri, Aug 01 at 16:49 , Updated at Fri, Aug 01 at 19:12
Source : CNBC-TV18

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Investment Advisor SP Tulsian is of the view that one can buy Eastern Silk Industries.

Tulsian told CNBC-TV18, \"If you see the performance of Eastern Silk for FY08, if you break them into four quarters they had a similar kind of profitability of about Rs 18-19 crore bottomline with a topline of about Rs 125-130 crore. But then the apprehension or the fear of the forex losses has started coming in which has rightly came in March quarter where they had losses. So again market was apprehending the same kind of losses coming in or reported by the company for this quarter also which did not come. The bottomline is to the extent of Rs 19 crore obviously that includes Rs 2.5 crore as the exchange gain, which they have earlier provided for.\"

He further added, \"The best part is now there are no derivatives contracts outstanding, which the company has clarified except for the forward contracts, which are again related to the working of the company that is again if you have any mark-to-market losses obviously that gets compensated by higher realization in your topline revenue. So taking this into consideration with a book value of close to Rs 49-50 a share which has been subdivided to Rs 2 now ruling at around Rs 18 that makes or that qualifies a very good buy because ultimately if you see an EPS of about 11-12 this used to be a very favored stock or maybe the preferred stock by the market. So with the EPS of about Rs 10-11 or Rs 12 on Rs 2 face value obviously the stock looks quite good that probably the performance of the company will keep continuing in the same manner. Share is ruling much lower than its book value. So I think the result of this company is also a hit.\"

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Buy Eastern Silk: Prabhudas Lilladher (1) 02-Aug-08 21:14 Tracked by (1)


Posted by: MMB Messenger on ( 02-Aug-08 21:14 )
Price : BSE: Rs 17.50 ( 8.02 % ), NSE: Rs. 17.50 ( 8.02 % )
Research firm Prabhudas Lilladher has maintained buy rating on Eastern Silk. At the CMP, the stock is trading at attractive valuations of 5.4x FY08E and 3.9x FY09E revised EPS estimates of Rs 56.3 and Rs 77.9 respectively

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sp tulsian wellknown stock advisor and bse member and prabhudas lilladher are given bullish report on eastern silk industries ltd. 12 months target rs.120. recently. current market price rs.21.70ps. its a multi baggar surely in 12 months time irrespecive of sensex....

Eastern Silk Industries was up 32% last week and was up 9% on Thursday. G Venkatesh, President of Eastern Silk Industries, said they are focusing on the hospitality business currently through supply to five and seven star hotels. The company plans to invest Rs 80 crore in capex in FY09.

Excerpts from CNBC-TV18's exclusive interview with G Venkatesh:

Q: What’s the buzz in Eastern Silk? What are the recent expansions moves that you are planning? Any change in ownership pattern that set your stock buzzing?

A: Everyday is a new challenge for the textile industry now. We are learning by experience because last quarter we saw some recessionary pressures in the US market; it’s all behind us now. We have changed our product mix; we are now more focused on the high end product and accordingly, we are now setting up a new finishing line in our unit in Anekal. The total capital outlay will be roughly around Rs 75-80 crore.

The idea is to increase the production of both velvet as well as the jacquard fabric, which we believe will have a better acceptability in market. It is now getting into a commoditised way which means that more people on the business are doing plain fabric. So instead of depending on plain fabric, we thought it's better to move on to more high value item, maybe the volumes might come down, but the profitability and the bottomline will improve and that’s our strategy now.



Q: Tell us a bit about your supply to the hospitality sector?

A: For hospitality business specific designs, specific colours are being made by our design team and based on the designs that we create, we sell the whole concept to a particular hotel. That increases the volume of business to us both on the high-end as well as on the low-end product.

Q: What would you expect in terms of margin improvement considering the value addition that you have taken up and what would therefore translates by way of profit addition or revenue addition?

A: From an average realisation of about USD 15 per meter last year, we are now trying to achieve an average realisation of about USD 18 per meter. On the high end, we had achieved about USD 23 per meter last year; we are trying to achieve realisation of about USD 26 a meter, which means that our profitability at the top end will improve by about 15-20% on a segment basis.

Q: Your exposure to forward contract as given on June 30 indicates a Rs 4 crore loss. What is the total exposure that you have right now and would you be marking some more losses in the coming few quarters?

A: We have worked out the marked-to-market losses on the basis of the prices prevailing as on March 31 and June 30. But fortunately whatever exposure that we had in the euro dollar, the situation has changed and it has more or less moved to a level where we had booked at those points at about 1.47 to the dollar. So today if you look at marked-to-market losses we have nothing at all.



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Eastern silk is good but there has been a fantastic runup till 25/26.the share is now on its consoladating downtrend and rightly so the volumes have taken a major dip.This share might come down to about 17 or 18 , make a solid base there and then start another run which would take it past this high.It is also important that ES shows a good set of numbers in the coming 2 quarters.Also the rupee has played topsy turvy games this quarter, so it is important to wait and watch cos this run up is purely driven by the divident factor.Just be careful and its better to wait cos falling markets drag everything down . Remember the horse and the donkey travel in the same plane and if the plane crashes u only see blood....

Yes i agree with you,this can be a good pick for longterm In the earlier board we could go to the company and financial from the message it self.Thanks to the new design unable to do so...

Please please do not rely on the analyst reco! This stock is not liked by the market operators and investors as well bcoz of wide variation in results qoq! The management seems to be unprofessional! Take your own decision! Cheers!! =morningstar=...