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Friday, June 20, 2008

Pioneer Embroideries Ltd - Investment view

Scrip:Pioneer Embroideries Ltd
Cmp:70
Target:150
Return expected:115%
Duration:9-12 months


[Pioneer Embroideries Ltd news,views and analysis/ Retail venture news and real estate/owner of hakoba brand/results/future prospects/Land bank/Analsyt buy call/cheap and attractive valuations/Solid fundamentals/great buy/Target price/What should be done with Pioneer Embroideries Ltd?]


Story:

Pioneer Embroideries Limited (PEL) is one of the largest players in the embroideries Et laces segment in the world.It is also India's largest manufacturer-exporter of embroideries and bobbin laces.It has got seven embroidery manufacturing units located at Mumbai, Sarigam, Naroli, Haryana, Bangalore, Navi Mumbai and Coimbatore.The company has been struggling to put on good results due to higher interst and depriciation costs but overall the turnover has been on a continuos rise.Now i like the story mostly becuase it has got a big retail and a small real estate presence.For the real estate segment the company has already signed a development agreement with Suntech Realty and it’s coming up in Borivali,Mumbai.It has also got real estates in Bangalore, in Coimbatore,Delhi and few other places as well.Plenty of you have heard the name of the retail store"Hakoba" isnt it?Its a subsidary of the company and is called Hakoba Lifestyle Limited where it owns 85% and 15% being with BCCL.The company presently has 64 outlets in 35 cities of india.The company is planning to increase the retail stores to 200 by fy09.The retail segment contributed 43crs of reveue in fy07 and the same is expected to increase at a tremendous speed going forward.At present prices of 70rs its market cap should be around 84crs.The mumbai property alone is worth 50crs,if i add up all the real estates the same would total up to 70-75crs.The company is the leader in its field with 7 manufacturing units, so the rest of the market cap gets added there.So what about the 200 hakoba stores by 09?Chow guys...You are getting them for free...64 outlets generated 43crs of revenues..how much 200 stores can?Put up the calculator and calculate coz in the scrip price of 70 it hasnt been calculated yet.

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