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Thursday, May 04, 2006

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Sybly shines on expansion plans

Our Bureau

Plans to raise funds thru pref allotment, rights issue

Expansion moves
Plans to expand the high-margin stitching threads
Second phase expansion to cost Rs 15 crore

Kolkata , May 3

Sybly Industries' stock has gained over 9 per cent in the last two sessions with increase in traded volumes. It closed at Rs 14.73, up 4.47 per cent, on the Bombay Stock Exchange and about 55,097 shares changed hands (fortnightly average is 30,182 shares).

Mr Mahesh Mittal, Managing Director, Sybly ,confirmed that the yarn-making and exporting company would take up the second phase of its expansion plan soon, mainly in the high-margin stitching threads.

It has already registered two trademarks for garment stitching threads and has applied for three others for threads to be used for leather and synthetic items as also embroideries.

The Rs 8-crore yarn capacity expansion plan is near complete, Mr Mittal said. The second phase would cost around Rs 15 crore, of which around Rs 10 crore would be invested by March 2007. "The rest would be in 2007-08," he added.

Preferential allotment of shares, rights issue and borrowings are proposed for raising funds, he indicated. "The financing is likely to be ready by July," he explained.

As a result of the on-going expansion plan, the company may see the turnover rise by about 50 per cent this fiscal, the Managing Director said.

The company is expecting a significant improvement in its profitability because of reduction in debt cost and higher margin from retail threads business. It is also building a dealership network for a range of stitching threads across the country.

Some analysts have assigned a forward (FY08) P/E of 7.5 against the prevailing industry P/E of 11.2.

As of March 31, promoters, including persons acting in concert, hold 24.08 per cent stake in the company while PCBs' stake is at 50.12 per cent and public holding at 25.63 per cent.

For the full year ended March 31, it reported a net profit of Rs 52 lakh against the previous year figure of Rs 35.8 lakh.

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