Siyaram Silk Mills may touch Rs 1355: Mayuresh Joshi

Mayuresh Joshi of Angel Broking told CNBC-TV18, "We did like Siyaram Silk Mills even at lower levels. However, if one really expects their business segments, their fabric division is expected to do well which contributes 75 percent, the volume growth in the quarter gone by has been a little tepid at 9.5 percent but if you see the kind of growth prospects that Siyaram has, it has got good pedigree of brands under it, Siyaram, Oxemberg, J. Hampstead."He further added, "The kind of growth that one really expects in terms of topline, we are expecting a 10 percent growth to come through, close to that Rs 1850 crore odd mark by FY17. What it probably does to EBITDA margins in a falling or deflationary commodity price cycle is that the EBITDA margins at 11-11.5 percent should probably expand but we have again taken a very conservative approach in maintaining our EBITDA margins close to that 11.5 percent.""If those margins expand over the next couple of years you are probably going to see the bottomline expand at a much faster pace where you are expecting the bottomline to come close to that Rs 98 crore mark. It is also getting into the ethnic ladies wear segments. So, if that segment grows at humongous pace which we believe over the next 3-4 years the consolidated with both the women's ethnic wear along with their apparel division doing well specifically on the fabric side is going to take the topline to a much higher level than what the expectations would be.""So 1600 odd dealers in terms of distribution, you are probably talking about 160 stores currently, expanding that by around 300-350 odd stores in the coming 3-4 years, 3 lakh units under which these brands are basically sold through. Again a decent spend goes on the advertising part. Valuations even at the current juncture are looking quite reasonable at around 10.5-11 times. Again I think Siyaram is something that we probably like on decline with a target of Rs 1355 over the next 9-12 months," he said.