About Company:
Established in 1983 Mallcom (India) Ltd.
is India’s leading Personal Protective Equipment (PPE) brand has grown to
become one of the largest Indian Player. Having a presence in more than 75
countries on 6 continents, Mallcom has established itself as the integrated
manufacturer and distributor for head to toe protection and is a valued partner
for major importers in their brand name. . Mallcom has captive test labs in
each of its production units that manage standards and ensures quality.
Continuous investment in upgrading and
innovation in the lab has helped Mallcom to customize and develop PPE’s faster
in sync with the changing safety requirements of the workplace.
An ISO certified and government-registered star trading house, Mallcom produces numerous product categories covering head to toe such as helmets, face masks, garments, rainwear, leather gloves, nitrile gloves, and safety shoes. Mallcom also deals in eyewear, ear protection,harnesses .
PPE Products : PPE is Personal Protection Equipment concerning occupational safety. It’s application could be in medical science, in a factory, on a road, mining or in a kitchen. India had a very low awareness and focus on safety since it adds to the cost of operations, Thanks to growing numbers of MNC and large Indian companies which brought new focus on mandatory use of safety and related products which has resulted in growing demand of safety products across all sectors. Some of these widely used products like, hand gloves and safety shoes are subject to wear and tear hence there is always a repeated demand from the end user.
Manufacturing units : Mallcom has 13 manufacturing facilities spread across Bengal, Uttarakhand(Haridwar) & Gujrat(Ahmdabad)
Product Revenue Mix : Annual Capacity
1.Saffety shoes : 35% 3Million
2.Garments : 27% 2.2Million
3.Leather Gloves :24% 12Million
4.Nitrile Gloves : 8% 14 Million
5.Others(Helmets,Mask) : 6%
Domestic Business(32%): Till 2008 Mallcom was 100% EOU in last 14 years domestic business has grown to 32% of total revenue and more awareness , focus on safety and capacity expansion by existing industrial sectors the domestic business is set for continuous growth.Indian PPE market size is expected to grow at CAGR of 16% till 2026
Export Business(68%): Mallcom has been exporting to emerging markets in the far east,South Pacific,Africa,Middle East and Central America.It intends to expand its presence to USA,Australia and UK.Europe constitutes to 65% of export revenue.
Financials :
Mallcom has established a track record of robust financial performance with growth in revenue from operation through backward integration and capacity expansion With an annual turnover of about Rs357 Crores in FY 21-22
Investment Rational:
Domestic market of PPE is currently 1500 crores of size but mostly fragmented and is likely to be more than Rs 5000 crores in next few years( as per the management estimation) and as stated Indian mkt size could grow at compounded rate of 16% in next 4-5 years resulting in huge business possibilities in India. As per management company is also witnessing early effects of China+1 policy due to increasing lock downs in China leading to their supply chain constraints as well as economic issues and lack of stable government in neighboring countries such as Sri Lanka, Pakistan and Banglasdesh.
Q-1(FY22-23) Revenue was up 42% from 61.5 Crs to 87.4 Crs
EBIDTA Margin improved to 13.62%
Q-1(FY22-23) PAT grew by 38%
New trade deals signed with UAE & Australia to help create new markets for Mallcom
Market cap at cmp(Rs 682) is just 425 crs on equity base of Rs 6.24Crores
Promoters Holding : 73.78% very high
Consistent Dividend paying record and almost debt free status
Fy 21-22 Revenue 357 Crs EPS 50.57 Management has given conservative revenue guidelines of Rs 410 crores for FY 22-23 which could result in EPS of Rs 55 for current year thus stock hold lot of value at forward PE of 12.5 at cmp of Rs 682.
Stock was initially discovered and recommended by me in 2019 at then price of Rs 190 in 3 years stock touched high of Rs 1079 resulted in 5x returns in 3 years
Recommended to accumulate only for Long term investors on all dips with one year target price of Rs950.
ACCUMULATE
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