1. INTRODUCTION

• Brief Introduction of the company  

Shiva Mills Ltd. is an Indian textile manufacturing and distributing company. The company's operations include cotton yarn production. The company office is located in Coimbatore, Tamil Nadu. The company also expanded their business in windmills energy generation and used this renewable energy in their manufacturing plant. The company focuses on producing quality cotton yarn and selling in the domestic market. 

• Industry Overview  

The Indian textile and apparel industry is significant at global as well as at country level. This industry generates employment and improves the country's GDP. This industry has a very great future because of increasing demand in textile and fashionable products. However, this industry faces many challenges like raw material price fluctuation, global competition, and change in demand. 

• Purpose of the Analysis 

This research and analysis will help to understand the financial condition of Shiva Mill Ltd. also this analysis will help to know more about the company and about the textile industry in the country... The analysis will cover all companies’ profit and loss statements, balance sheets and key financial ratios. 

2. COMPANY OVERVIEW 

• Background and History 

Shiva Mill Ltd was founded in 2017 and their office is located in Coimbatore, Tamil Nadu. The company operated in the textile manufacturing industry and later became a separate entity after its demerger from Shiva Texyarn Ltd. The company mainly focuses on spinning operation and production of cotton yarn. Over the years the company expanded their business in renewable energy from windmills. 

• Business model

The company follow Trading and Manufacturing Model-

1) Sales and Distribution Model

             2) Manufacturing of Textile Product Model 

3) Energy Support Model.

• Key Product and Services 

1) Cotton Yarn 

2) Waste Cotton 

3) Wind Power Generation 

4) Textile Manufacturing Support.

• Market Positioning 

Shiva Mill Ltd operates in cotton spinning and manufacturing cotton yarn. The company sells their product in the domestic market, also supplying yarn to wavering and garment manufacturing. The company maintains a stable position in the market by providing good quality products in the market. The company uses renewable energy in the manufacturing process to be environmentally friendly. By these activities the company is able to maintain good and long-time relations with buyers.

3. PROMOTERS / FOUNDER

4. FINANCIAL ANALYSIS

• Income statement analysis        

                                                                                                                   (In Lakhs)

              Key Observations of Income Statement:

1) Revenue increased in FY25 as compared to FY24 that shows sales performance increased.

2) After an increase in revenue, the company still reported a net loss of 3.8 cr. due to high depreciation         cost and operating expense.  

• Balance sheet analysis 

                                                                                                                          (In Lakhs)

End of the FY25 –

1) Equity share capital – There is no change in Equity share capital.

2) Current asset – Company has slightly decreased current asset.

3) Current Liability – Current liability is high due high borrowing. 

• Cash Flow Statement 

                                                                                                                             (In Lakhs)

            Noted -

             1) Cash balance is decreased because of loan payment and operating expenses.

             2) Cash from financing activity is negated because of repayment of borrowing.

• Key financial Ratio 

• Profitability Ratio  

Net Profit Margin = (2.25%)

•  Liquidity Ratio  

  Current Ratio = 2.31

•  Leverage Ratio   

Debt / Equity Ratio = 0.11

• Efficiency Ratios

Earnings per Share = (4.41)

• Year on year comparison ( 3 years revenue)

5. KEY INSIGHTS AND INTERPRETATION 

• Strengths 

1) Stable revenue growth from operation.

2) Use renewable energy which reduces electricity cost.

3) Strong experience as a promoter in the textile industry.

• Weakness 

1) The company is facing a net loss.

2) High operating expense and depreciation cost affect profitability.

• Risk factor 

1) Fluctuation in raw material cost. 

2) Dependence on textile market demand and economic conditions.

• Future Outlook 

The Shiva Mill Ltd is in a good financial condition but facing continued net loss. The company's future growth is fully dependent on their performance and other factors. The factors include demand for textile and garment products in the domestic and other country markets, maintaining competitive pricing for quality products. By improving on operating efficiency and cost management they could be able to convert net loss into net profit in future.

6. CONCLUSION 

Final evaluation of financial condition 

The Shiva Mill Ltd. has a stable operational production and revenue growth from operation. However the overall company is facing net loss and profitability challenges because of high depreciation and operational cost in recent years. The company balance sheet indicates stable equity share holder and moderate debt level which shows sustainable business for the long-term.

Investment / Performance Perceptive 

From the investor point of view, the company is in stable financial condition but they need to work on their profitability. The company’s growth is dependent on the future demand for textile products and economical condition. If a company improves their performance, investors may think about investing in the company in the future. 

Sources

https://shivasmills.com/ 

https://www.screener.in/company/SHIVAMILLS/