Ambica Cotton Mills : Buy for long term
Ambica Cotton Mill’s pricipal activity is manufacturing and marketing cotton yarns. Plant is located in Tamilnadu’s Kanniyapuram. Cotton manufactured here is mainly used for Shirts and T Shirts making.
The company is using value added products which helps to yield better margins. To reduce power costs, company 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.
Long term target fo this stock is Rs 150, Book value is 189.30 and P/E Ratio is 3.57
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.
In the year 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.
In the year 2000 the company has chalked out a Rs 14-crore expansion-cum-modenrisation programe.
The dividend history of the company is shown here in following table…..
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