KSL and Industries Limited
Introduction
KSL and Industries Limited is a publicly traded textile manufacturing firm that was incorporated as early as in 1983 and is traded on Bombay Stock Exchange (BSE). The company mainly operates in spinning and yarn manufacturing, with its headquarters located in Silvassa, Dadra & Nagar Haveli.
Industry Overview
Textile is considered as one of the largest industries in India, which is splashing big in employment, exports, and the economy of the country in general. India is a leading cotton and textile manufacturer in the world, providing approximately 2-3 percent of GDP and approximately 12 percent of exports. The industry comprises spinning, weaving, processing, and garment production.
Purpose of the Analysis
Knowledge of the operation and structuring of KSL and Industries Limited.
* Detract into the history of the management and the promoters.
* Check the health and the financial performance of the company.
Company Overview
Background and History
KSL and industries Limited was established in 1983 and has increased its textile operations throughout the years. They have a number of plants in Nagpur, Thane, and Silvassa to produce textile products.
Business Model
The primary area of focus of the company is the production of textiles particularly spinning and production of yarn. The model resembles the following:
* Produce clothing out of its factories.
Sell them to the domestic market of textiles.
* Have related textile work subsidiaries.
Key Products / Services
Making textiles is simply the core business and is the main source of revenue of the company (100 percent).
Market Position
KSL and industries limited is a medium player in the textile industry. They are rivals to other local manufacturers in India, though they have struck some financial plateaus in recent times.
Introduction Promoter / Founder.
Manoj Kumar Sharma is the managing director.
Pravin Kumar Parekh -Independent Director.
Trivendra Shambhu Singh -Independent Director.
Bhanu Pratap Singh - independent director.
Neha Patil – Director
Manasi Wadkar – Director
Professional Background
The management team has experience in:
* Textile manufacturing
* Business management
* Corporate governance
Company Growth and Strategic Decisions Role.
They handle:
* Operational day to day and strategic planning.
* Making plants leaner and modernizing technology.
* Enhancing government and fiscal oversight.
Financial Statement
Profit and Loss
Particulars (₹ Cr) | Mar-18 | Mar-20 | Mar-21 |
Sales | 138.28 | 19.11 | 0.12 |
Gross Profit | -28.65 | 2.05 | -8.38 |
EBITDA | -44.80 | 0.15 | -9.48 |
Depreciation | 79.40 | 63.88 | 44.36 |
Earnings Before Tax | -227.74 | -63.73 | -53.84 |
Net Profit | -232.61 | -51.79 | -80.23 |
Interest | 103.54 | 0.00 | 0.00 |
Balance Sheet
Particulars (₹ Cr) | Mar-18 | Mar-20 | Mar-21 |
Equity Share Capital | 40.27 | 40.27 | 40.27 |
Reserves | -1,126.88 | -845.96 | -926.20 |
Equity (Capital + Reserves) | -1,086.61 | -805.69 | -885.93 |
Borrowings | 1,489.71 | 1,086.77 | 1,086.83 |
Other Liabilities | 407.76 | 269.83 | 296.96 |
Total Liabilities | 810.86 | 550.91 | 497.86 |
Fixed Assets | 718.08 | 467.90 | 423.54 |
Current Assets | 46.42 | 33.72 | 23.28 |
Total Assets | 810.86 | 550.91 | 497.86 |
Cash Flow Statement
Particulars | Mar-18 | Mar-20 | Mar-21 |
Cash Flow from Operating Activities | 1,843 | 973 | 2,931 |
Cash Flow from Investing Activities | 433 | 915 | -1,507 |
Cash Flow from Financing Activities | -2,254 | -2,244 | -1,034 |
Net Cash Flow | 22 | -356 | 390 |
Ratio
Particulars | Mar-18 | Mar-20 | Mar-21 |
|---|---|---|---|
Sales (Cr) | 138.28 | 19.11 | 0.12 |
Net Profit (Cr) | -232.61 | -51.79 | -80.23 |
Gross Profit (Cr) | -28.65 | 2.05 | -8.38 |
Current Assets (Cr) | 46.42 | 33.72 | 23.28 |
Current Liabilities (Cr) | 407.76 | 269.83 | 296.96 |
Borrowings (Cr) | 1,489.71 | 1,086.77 | 1,086.83 |
Equity (Cr) | -1,086.61 | -805.69 | -885.93 |
Interest (Cr) | 103.54 | 0.00 | 0.00 |
Total Assets (Cr) | 810.86 | 550.91 | 497.86 |
Strengths
* The company possesses more than 35 years of experience in the textile industry.
A variety of production plants.
* They are a listed company, and hence, they adhere to corporate governance regulations.
* Have a large and expanding industry.
Weaknesses
* massive losses within the books in the recent past.
* Outdated machinery leading to hiccups in its operation.
* Depreciation and running costs are high.
Risk Factors
* The textile market is volatile.
One product: heavy maintenance costs and operational costs.
* Both local and international competition.
* The high dependence on the modernization of facilities.
Future Outlook
It is planned to update spinning equipment and modernize machinery and increase efficiency and output. The management desires to cut on costs and enhance performance of the plants which should see the books appear better.
Conclusion
Financial Health Final Evaluation.
The recent findings reveal huge losses and this is primarily due to depreciation and high costs of operation. That is an indicator of financial strain and the necessity to reorganize operations.
Investment or Performance Perspective.
To an investor, it is a dangerous gamble because the losses are incurred every time. But when the technology upgrades and efficiency increment kicks off, the performance of this company may reverse.