Friday 14 November 2014

Kitex Garments Limited : A great long term buy

Company got suggested to members a couple of weeks back at 338 bucks.Its quoting at 410rs presently.Company has got stunning potential.Readers its your time to capitalize on the same.

   Kitex Garments Limited   

Trade4target : Stock tips
Scripscan:Kitex Garments Limited
Traded in:Nse-Bse 
Return percentage:40%
Duration:9-12 months
5 year CAGR return expected:25-30%
5 year target potential range:1031rs-1254rs

Business : Kitex Garments Ltd manufactures toddler wear for most of the international brands such as MotherCare, Toys R Us, Gerber etc and is ranked as the third largest company of such type in the world.Company also supplies to jockey.Group employees to over 8000 peeps.It is the only company in the world which uses Acutex 1 quality of input.Add up more safety features like 100% certified safe process and organic dyes using threads from the number 1 codes etc which makes it the most favorable supplier for infant clothes.The company has to its credit the Best Vendor Award from Toys R Us and Gerber for the past couple of years. So trade4target advice to investors for this company.

Brand play : Kitex is all set to roll out its own branded products in the United states within the next quarter.Management expects turnover of 30-40crs in the maiden year.

Conclusion : Kitex garments specializes in infant wear market.The company derives majority of its revenue from export sales with exports contributing more than 90% to sales revenue in FY14.The company is about to be the world's biggest infant wear manufacturer in the next 2-3 years.Sales and PAT over a 10 year period have grown at a fierce speed of 21% and 43% respectively.Company boasts of a ROE of over 35%.Kitex is expected to grow 28-35% CAGR for the coming few years.The company is aiming a PAT of 100-106crs in fy16.At present prices it quotes at a forward PE multiple of 16x its fy16 earnings.This kinda companies trades at 20-25 PE's in most days.PE will expand more once it bags the bragging right of being the largest player in its segment.Assigning a PE of 22x,the target price gets assigned.FII's will eat up this kinda amazing businesses.A great medium to long term buy.

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