IPO: KPR Mills
Avoid
Business: Textiles. Location: Tirupur.
Primarily a knitwear exporter- Yarn contributes 50% and garments contribute 25% of total revenue for FY2006-2007.
Objective of fund raising:
Part finance the expansion project
Positives:
High operating margins on the back of captive power plant
Efficient sourcing
Locational advantage
Negatives:
Depreciating rupee
Nothing unique- more over a me too player
Valuations
P/E of 15-17 times on fully diluted equity considering FY2007 earnings.
Call: Avoid- better options available in the market
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