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Buy Ambika Cotton Mills – Call closed – 148% returns as on 09-04-10

Posted on: May 24th, 2009 at 7:45 pm

CALL CLOSED (LONG TERM INVESTORS – HOLD IT) Buy Ambika Cotton mills. Current market price: 74.90. Long term target: 149.80. Book value: 189.30. P/E ratio: 3.57

The Company’s principal activity is to manufacture and market cotton yarn. Its cotton yarns are used for manufacturing of shirts and T Shirts. Its plant is located in Kanniyapuram, Dindigul district of Tamil Nadu. The Company operates only in India.

The company has been working on value added products which yield better margins. To reduce power costs, Ambika has planned to increase the present installed capacity for wind energy from 13.8MW to 17.8MW by installing five windmills of 800kW each at an estimated cost of Rs21.48 crore.

Dividend
Year      Month Dividend (%)
2008     Jun             20
2007     Jun             25
2006     Jun             20
2005     Jun             20
2004     Jun             16
2003     Jun             16
2002     Jun             12
2001     Jun             12
2000     Jun             12
1999     Jul              18
1998     Jul              18
1997     Jul              18

YEAR EVENTS 1988 – The Company was originally incorporated as Ambika Cotton Mills Private Ltd as a Private Limited Company on 6th October , in the State of Tamil Nadu, and subsequently converted into a Public Limited Company on 5th September, 1994.

– The Company was promoted by Shri P K Ganeshwar, Shri M Rathanasamy and Shri P V Chandran, for setting up a cotton spinning mill. The mill, located in Dindigul, Tamil Nadu, commenced operations in January 1990. The project, with an initial capacity of 6048 spindles was part-financed by a term loan from State Bank of India. The Company carried out an expansion scheme to add certain back-process machinery in February 1991, which was also funded by the State Bank of India.

1992 – The company began implementation of an expansion project to double its spindlage to 12096 spindles by the addition of 6048 spindles. This project which was financed by means of a medium term loan from State Bank of India and the State Bank of Mysore on a consortium and through a Deferred Payment Guarantee limit from IDBI. The project was successfully completed in March 1993.

1994 – The Company added Comber machines to its production line and humidification system. This was funded by SIPCOT through a term loan of Rs. 90.86 lacs.

– The Company currently manufactures combed and carded cotton yarn of counts ranging from 30’s to 40’s. These are used by hosiery manufacturers to convert the same into fabric or garments.

2000 – The Company has chalked out a Rs 14-crore expansion-cum-modenrisation programe.

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98 Responses

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Comment pages: 1234567Show all

  1. CB Says:
    July 25th, 2009
    Posted at: 12:35 am

    Hi NT, it can see 48 in short term.

    Hi Dipishree, no..if a company is stong fundamentally and is trading at cheap valuations one can buy it


  2. sunil kamble Says:
    July 25th, 2009
    Posted at: 11:45 am

    can this stage dlf ( Rs. 395) will be buy?


  3. CB Says:
    July 25th, 2009
    Posted at: 11:49 am

    Hi sunil kamble, no..wait for some dip to enter it


  4. KP Says:
    August 9th, 2009
    Posted at: 10:05 pm

    Can i buy ambika cotton @CMP?


  5. CB Says:
    August 9th, 2009
    Posted at: 10:28 pm

    Hi KP, buy in small quantity considering market volatility


  6. Hello Says:
    August 11th, 2009
    Posted at: 4:32 pm

    Hello CB Holding SUZLON and HINDALCO can they see upmove before AUGUST as i holding ITM CALL Options asking this query


  7. bknswamy Says:
    August 19th, 2009
    Posted at: 6:57 pm

    what about ibreal?


  8. Devesh Says:
    August 20th, 2009
    Posted at: 7:40 am

    Hi CB can i buy ambika cotton @ cmp and what is the time frame for the mentioned target?


  9. Monojit Chakraborty Says:
    August 31st, 2009
    Posted at: 7:43 pm

    TATA STEEL CAN GO BELOW 400?


  10. CB Says:
    August 31st, 2009
    Posted at: 7:48 pm

    Hi Hello, as of now hold them. keep strict sl at 4630. below this level nifty can see 4550

    Hi bknswamy, its a good buy around 250 levels..can add 7-10% in short term

    Hi Devesh, no.. buy it below 80. it can see 100 in short term

    Hi Monojit Chakraborty, yes. if markets remain weak it can see 400 levels.


  11. Rajneesh Says:
    September 3rd, 2009
    Posted at: 6:12 pm

    Great call CB. never missed any call from this section.


  12. Ranga Says:
    September 3rd, 2009
    Posted at: 10:44 pm

    guru , I took this stock long back at 90. expecting 120, now you closed this call. I need to sell and come out or can I wait for some more time ??????


  13. suahealam Says:
    September 3rd, 2009
    Posted at: 11:18 pm

    hello CB, HW MUCH UP SIDE OF LNT?


  14. CB Says:
    September 4th, 2009
    Posted at: 12:02 am

    Hi Rajneesh, most welcome

    Hi Ranga, its a hold..can head upto 110. also they giving 20% dividend this month. hold onto it

    Hi suahealam, it has good support at 1470. can see 1600 if markets recover


  15. Assish Says:
    September 4th, 2009
    Posted at: 1:35 pm

    cb bhai ambika cotton up 20% :) at 113


  16. rk.1.5l Says:
    September 5th, 2009
    Posted at: 7:15 am

    Cb its amazing pick.
    as i am connected with textiles , i wish to share some tidbits.
    after the quota system scrapped, textiles looking very bright, but (due to) over supply caused havoc to the
    industry , after losses , now only textiles recovering, (but still not bright) ,

    i thought we will achieve tgt by oct-nov -when results are out. but it is surprise shooting.

    though there is lot of textiles companies , it is great pick ( i know among the peers it is best managed co.)
    I dont know it is a listed company.

    i believe textiles (spinning esp) will move up sooner

    also i dont think it is long wait. in the true sense of long term investment it is a short period.

    i am still holding 50% of ambika , and ALok , KPR mills.

    Apart from money , we are learn something valuable from you, chirag bhai.

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